Discover St, New York, NY 10012, USA

Should you start a tow truck business?

When you think of starting a tow truck company, expect both challenges and rewards. The business is potentially good. We all hate and love two truck drivers. We hate them if they remove our illegally parked cars, and love them when we are stuck on the road in a winter morning and they come to rescue us. The thing is, society needs tow trucks and in the business sense, it can be lasting whether the economy is in good or bad shape.

As your excitement kicks in to roll the wheels and have the cash coming, there are several factors you need to consider. Starting a tow truck business needs a huge capital. Hence, know your potential clients and determine your success rate. For instance, a tow truck firm has to survive and therefore, not just rely on servicing dealers of new cars as it may be affected when the dealership business plummet. Having a wider market is healthy for any company.

If you plan to be among the players of the tow truck industry, you may be caught in between pursuing it or considering other endeavors. Should you start a tow truck business? Check out the following factors:

Long-term returns

The tow truck business is a good idea for entrepreneurs because it provides solid and long-term returns. You can be sure to thrive even if the economy is undergoing downturns. Wrecker firms give services essential to the industry, hence they fare very well all the time.

Even before starting, have an estimate of the cost and revenue which greatly depends on your location. The average revenue is between $100,000 and $200,000. A full time towing firm with a 120 tows monthly earns less than $200 per vehicle. The figures come from the Utah Department of Transportation Motor Carrier Division and the Research Division’s Anderson Transportation Consulting and Eixenberger Group.

The Tow Truck Market

It is good to check out the results of a feasibility study or market research in the tow truck industry before even opening your company. Practically, the future of your business depends on your access to the local market. Make sure to connect with the police in your community and have your company listed among accident responders.

Your calls can come from police dispatch officers, motor clubs, tow partners or shop owners, auction houses, sports organizations, religious centers, private properties or have cash calls from random clients who need your service.  Those who need your services cut across the public or private sector, communities, households and various kinds of people including business persons, event planners and even celebrities.

Create a website for your company, and it should accept tow requests online. Advertise with adjacent repair facilities, in bulletin boards, yellow pages, auto clubs, local bars, auto-parts stores and offer referral arrangements.

The Tow Truck Client base

If you plan to have a wrecker firm of your own, start building your client base now. Your business cards, ads and brochures can be distributed way before your actual company operations. Begin introducing your company to potential clients. You can run a poll to see what people look for in a good towing firm. It manifests your commitment to provide quality services and gives you an insight on how to stay on top of the competition.


In the first stages, you have to file the paper work with your state. Check with the law if your wrecker firm needs a specific license or special permits from the state. As an operator, you should have liability insurance because of the risk involved in transporting vehicles.

Initial assets

Business owners can be in a dilemma of what assets to acquire first. Worse, they buy expensive trucks in the pilot operation. Some towing firms prefer flatbeds to accommodate damaged vehicles while others watch out not to damage the towed car’s rear axle.

Whatever you prefer, it is a good idea to keep expenses and truck payments as low as possible. As an owner of the new business, you may be overwhelmed with price fluctuations in supplies, fuel and staff so it is better to be prepared for the unexpected. Remember that you need cash on hand for a lot of expenses, such as cash advances and insurance premiums. Having $10,000 to $20,000 cash ready for your business anytime is a healthy practice.

If you are just starting and only have one truck, the driver should be able to accept calls from his mobile phone. As your company expands, you can buy more trucks or even put up a central dispatch office. A dispatcher makes it easier to manage a multi-truck firm.

Secured parking area

Wrecker firms hold vehicles so you need to know if a zoning permit is required for a secured area where you can park and hold impounded vehicles for days. A vehicle is impounded because the owner of the area where it is illegally parked wants it removed or a car needs to be removed from an accident scene.


Be careful when you hire your staff. Make sure your drivers have a clean record and a commercial driver’s license that is valid. Manage good employee relations and emphasize to your staff that being helpful and polite are important in your business. Clean-cut and affable drivers can get customer loyalty and generate repeat business. It is important to build good customer relations to achieve a positive reputation.

Desired income

Being a business person, you may already know what income you desire. That knowledge needs some research on what is the standard price charged for every tow service. Make an estimate on how much you will make in a specific number of calls. New companies usually tolerate revenue to be outpaced with expenses, which should not be the case. Find ways to avoid that and monitor your transactions to achieve your projected annual revenue.

When your actual transactions do not meet your projections, make adjustments as soon as possible. Plan living on a small income for the first few months since profits need to be put back to the business to purchase supplies and equipment. Being wary with costs and expenses can lead your business to greater profits without sacrificing the quality of your service.

Building a brand

Building a tow truck company is not about just being in business. Go beyond building a company – build your brand. There are a lot of towing firms out there and you need your brand to stand out with a strong marketing and a reputable name. One of the ways to render more efficient service is to automate your processes. Be smart yet careful of your spending and always be on guard for factors that may put your business down. Be always on the lookout for those who can bring in more revenue while building a strong brand to stay ahead of the competition.

Being a business owner is great, more so when you own a tow truck company. It involves hard work but not necessarily difficult work. It is best to be prepared before even starting a company. Do your research and learn beforehand in order to avoid pitfalls and stress. You need the heartfelt desire to succeed, commitment to solving problems of customers and helping them, as well as providing efficient services. These would ensure success for your tow truck business.

Written by: Tow Truck Las Vegas the premiere towing company in all of Clark County, NV. Contact us for a quick and easy tow anywhere in Las Vegas, or Henderson, NV.





Leave a Comment