If you’ve got a towing business, you know you’re in a tough industry. Not to mention an expensive one. Tow trucks and tow gear are not cheap. So, how does a tow business owner save money while running a successful business? It would be helpful to have some practical, money-saving tips that are actionable and practical, right? Here are 7 ways you can save money while running your tow business.
6 tips for saving money at your tow truck business.
1. Make sure your job roles are clearly defined.
Okay, so this one might seem a bit odd when it comes to saving money, but hear us out.
If everyone knows their responsibilities and understands what they’re expected to do on a day-to-day basis, it can help your business run more efficiently. And the more efficiently your business is run, the less time is lost every day. Besides, you save yourself from the frustration and headache of things not getting done because no one knew to do it.
One way you can define your expectations is by having an employee handbook. Just take note that you might want to enlist some professional help to make sure that you’re adhering to employment laws and such.
2. Know your operating expenses.
Of course, you also need to be familiar with your operating expenses – your employees’ wages, the truck payment, maintenance costs for the vehicles, operations (maintaining your office), marketing, insurance, and so on. Having this organized into a budget and a business plan can help you see where you stand financially. It’s also a good idea to evaluate your expenses every year so that you’re staying up-to-date on how things have been going from one year to the next.
You also may want to look at the way you price your tows. You don’t want to be undercharging or overcharging. It’s important to think about your cost to tow as compared to your pricing. Don’t sell yourself short – you provide a valuable service, and you want to make sure you’re being appropriately compensated for the work you do. Anyways – keep an eye on your cost to tow and your pricing.
3. Don’t hold onto vehicles that aren’t pulling their weight.
Maybe you’ve been procrastinating selling that old tow truck or wrecker and you’ve held onto it. But maybe no one uses it and it just sits there. If that truck isn’t on the road, it’s not making you any money. You might be better off selling that vehicle and using the money for the business – you could put it towards getting a new tow truck that will be more helpful to your business. You might need something more reliable, or maybe you could get a tow truck more suited to the type of work you’re doing. (There are many types of tow trucks after all.) You want to keep those trucks running as much as possible so they’re earning their keep.
4. Market to your intended audience in your target area.
Marketing can be tough, and it can be a lot of work. Make sure that the time, energy, and money you spend on marketing is well-spent by advertising to the right audience. If you’re not putting your marketing resources towards the right people, that money isn’t really being invested properly. (You’re kind of, well, wasting it.) So, make sure you’re advertising and marketing towards the people who could actually become your customers. And you have to advertise where those people will find you.
5. Keep the employees who are valuable to your business.
It’s important that you have a team that is really contributing to your business. You need team members who are positive and who really enjoy what they do. As difficult as it might be, you don’t want to keep people who aren’t fitting well with the company or who aren’t meeting expectations. Think of it as letting them move on to the next opportunity where they may be happier.
7. Save money on insurance.
Insurance is a major expense for tow truck businesses. To start saving some money, you can strive to lower your insurance premiums by:
- Asking about discounts.
- Committing to safety (regular meetings, policies, etc.)
- Getting multiple insurance quotes.
- Hiring safe, experienced drivers.
- Having continuing education/training.
- Doing pre-trip inspections.
- Preventive maintenance of the vehicles.
Like we said, towing is an expensive industry. If you can save money, that’s a great idea, right? So, keep track of your expenses, and don’t forget to do annual checks of your budget. If you want to save money on your tow truck insurance, we can help. Get started by filling out our online form, giving us a call, or messaging us on LiveChat.
Sources:
Duke, Charles. “Are You Leaving Money on the Table?” American Towman,
Sept. 2019, pp. 12-14.
https://thetowacademy.com/four-things-you-can-do-today-to-avoid-losing-money/
