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How to Start a Tow Truck Company

How to Start a Tow Truck Company

Ready to start a tow truck company and help drivers in dire need on the road?

There's no better time to start a tow truck business than now--the market size of the tow truck industry is about $11 billion with an annual growth rate of 4.7%. These figures imply that starting a towing business is a prudent and lucrative idea.

But, how do you get started? How do you launch a tow truck company in 2022?

Write a Business Plan

Like other businesses, starting a towing company requires proper planning.

A good business plan guides you on how to create a lucrative towing business. And should you need to secure a loan, a good plan can smooth the loan process.

Before writing a plan, consider the variety of services you want to offer across a list of industries. Will you offer tow services to auto repair shops, law enforcement, or auction houses? Determine specific services and industries you want to serve.

Plan your finances, too. Where will the capital come from to start the towing business? Without capital, you can't get the business up and running.

Register the Business

So you have a business plan, the next step is to register the business.

Follow these steps to register your towing business:

  • Choose a business entity (are you starting a corporation, limited company, or sole proprietorship? Be specific).
  • Create a unique business name (more than 32.5 million registered businesses exist in the US. So, make your business name stand out from the rest).
  • Register an employer identification name (EIN) online with the IRS (having an EIN will ease filing business tax reports and funding applications).

Secure Business Capital

Capital is what will realize your business plan.

Capital is necessary to starting and running a towing business--let's face it, buying tow trucks is an expensive affair. So, you need a way to secure business capital.

Here are a few ways you can explore:

  • Apply for a loan
  • Finance your business from your pocket and with little money (bootstrapping)
  • Ask for loans from family and friends
  • Crowdfund your towing business

All these methods can help you secure business capital and kick start the business.

Obtain Business License, Permit, and Insurance

Operating a business without certain permits and licenses is impossible.

Check with your local state's Department of Transportation to confirm what requirements you need to meet before running a towing business.

Once you have a permit, get a tow truck license to cover your business from road-related risks such as accidents and other hazards.

Promote your Business Online

Create a buzz online about your new tow truck business.

Explore social media to promote your business. About 54% of social media browsers use social media to research and inform their purchase decisions.

Optimize your content and share a stunning car stock photo of your tow trucks to increase your chances of being found and attracting potential customers online. Larger images are more effective than smaller ones in increasing conversions.

Besides optimization, partner with a trusted roadside assistance brand such as the American Auto Association (AAA) to increase your credibility and reputation.

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