Steps to Starting Your Own Tow Business

Did you know that the tow truck industry made more than $8 billion in revenue last year? The statistics show that the industry is booming. Investing in the towing  business is ideal if you‘re looking to expand. However, starting a business that involves helping drivers solve road issues, cruising the routes, and handling the public’s automobiles requires comprehensive business planning.

If you’re ready to kick off your tow truck business, here are the steps you need to follow.

Steps to Start a Tow Business

Step 1: Make a Business Plan

A business plan serves as a road map to build a successful and flourishing tow truck business. It includes everything from your loan securing plan to financial planning. You may start with considering the type of clients you want to facilitate.

Remember that a tow trucking business is not only about offering roadside assistance to drivers having car troubles. It may however, include various services that you can provide to several industries such as:

  • Roadside assistance for the public
  • Towing services for the town
  • Towing impounded cars
  • Law enforcement
  • Auto repair service center
  • Auction houses


Once you know the clientele you’re interested to serve, your next move should be creating a business budget. Make sure you have sufficient capital to bear overhead costs.

Check your financial plan for these recurring expenses;

  • Licenses and permits
  • Tow truck insurance
  • Buying tow truck(s) and finance expenses
  • Business insurance
  • Employee salaries including any benefits
  • Marketing expenses
  • Gas prices
  • Vehicle maintenance


You will also want to pick your equipment such as hook and chain tow truck, or flatbed truck and separate business and personal expenses.

Step 2: Register Your Tow Business

To register your tow truck business, you need to complete some essential paperwork after choosing your business entity. You may choose from business structures like sole proprietorship, corporation, and LLC (Limited liability Company).  Our typical recommendation is to create an LLC.


Step 3: Secure Business Funding

Business funding is a catalyst you need to run your own business. You need capital to purchase tow trucks that are costly. You may go for the options like:

  • Self financing
  • Business loans
  • Family and friends

Step 4: Request Business Insurance and License

Starting a tow truck company needs registration and certain permits and licenses. Consult your local transportation department, find out the requirements, and secure these licenses;

  • Indictment management license
  • Private property license
  • Consent to tow permit oversized truck permit
  • Class B driver’s licenses

Step 5: Promote Your Tow Business

Once you’re done with all the legwork, it is the right time to get your “tow truck startup” off the ground.  You need clients and the only way to attract them is to incorporate marketing and promotional strategies.

Revolutionize your social media, improve SEO ranking, and use any tactic that you think will get you potential clients.

Summing Up

In conclusion, entering the towing business world is doable if you’re ready to put dedication in. Thus, you can use the steps mentioned above and start your own tow truck business.


We can help you save on your tow truck insurance.