Starting a towing company can be a challenging process. As excited as you may be to get the wheels rolling and the cash coming in, there are a few things you may want to consider before opening your doors.
1) What kind of company are you looking to build? Diversity in sources of business is important when running a towing company. The old adage “Don’t keep all of your eggs in one basket” holds true for the towing industry as well. Understanding the potential sources of business and how profitable they each are can be helpful in determining how successful you will be from the start. Police, motor club, auction, cash customers, account customers and private property accounts all have unique business demands and asset requirements. Be sure to consider just how each source will play a part in your business both now and in the future.
2) Buying trucks and paying for rent, employees and liability insurance will consume the lion’s share of your revenues. And it sure is expensive to be paying for these items when few calls are coming in. One great keystone of any towing company is providing service to the local police and fire departments. Check with their contacts to see how to get on the lists. If it isn’t possible to get onto the list for a few months it may make sense to wait. Municipal lists are a steady and profitable customer but don’t count on that revenue until you know you can get on the provider list. Every police department has a vehicle officer or contact in charge of the towing process. Get their name and make them your friend.
3) Build a brand, not just a company. With an overabundance of towing companies to choose from consumers often select companies at random to call for a quote. Make your business stand out by having a good name and strong marketing plan. Having these in place before you start spending on advertising will make that money work harder for you. And be careful when committing to long-term contracts like annual yellow page business directories and online advertising commitments. Ask what you can expect in return for your money and remember, much of this can be done yourself for little or no expense.
4) Start building your contacts now. Your company doesn’t have to be up and running to print business cards and go around introducing yourself to potential customers. Tell them you are launching in 3 months but wanted to understand what they look for in a good company. It will show your dedication to providing a good product as well as provide you with some insight on how to better compete with your future fellow industry professionals.
I ran a successful tow company for several years and know much of what you will need to do is not difficult work, its just hard work. Being committed to being the best and being professional will give you a huge boost over your competition. After selling my company I created TowProgram.com as a way to help new and existing towing companies become more profitable. The program is an educational tool that simply, easily and effectively tackles the biggest challenges tow companies face. It covers:
a. Cost-effectively building a strong brand to make your company stand out
b. Easily computing costs and revenue per call leading you to greater profits
c. Adding automation methods to help your business run more efficiently
d. Better managing employee relations
e. Preparing your business for a profitable sale
You can find more about the program and other helpful tow tips at www.towprogram.com
