Towing has become one of the most popular and needed commercial services over the last few years, which of course, means it has become quite profitable. However, this type of service is heavily regulated with licensing and other procedures, meaning that it is essential to have a decent business strategy in mind to gain the level of success you desire.
Understanding Licensing Requirements
Many experts in the field point out that the most difficult part of starting a towing business is the licensing. Many of the states are going to have different requirements and it is important to find out the detailed regulations that are in place.
However, typically the towing business owner is going to have to supply detail and evidence regarding several of the points below. However, it is important to keep in mind that requirements are going to differ from state to state.
1) Bonding (Although each state the amount will be different)
2) Detailed information about each and every driver
3) Full inspection of the facilities and general equipment
4) Proof of a dependable driving record.
5) Criminal background checks of all drivers.
6) Drug test results
The Need Of Capital And Insurance
A good part of the business strategy is going to involve understanding the up-front cost of training, rental property, equipment, and maintenance, as well as marketing costs. When you have the numbers for all of these expenses, you will know the amount of capital that is going to be needed. If the amount that is needed is above your means, you can always apply for a small business loan to help you get started.
You are also going to have to be in contact with an insurance provider who has experience in tow truck insurance. Order several estimates that will allow you to choose the best type of coverage for the business that will offer the most affordable premiums. The most typical tow truck insurance is going to cover the trucks, lots, employees, as well as any repairs needed for trucks and cars damaged during a tow.
When deciding to start a towing business, one important step that cannot be ignored is to analyze the local market and decide upon a proper zone to operate in. It is best to find a populated area that is not saturated with competition.
Creating The Ultimate Marketing Strategy
Once you have all the steps ironed out in front of you, it is time to begin a full blow marketing strategy. You are going to have to ensure that the community is aware of your business. If you are operating a public towing service never underestimate the power of the Yellow Pages, as it is still very relevant in the towing business, If you plan to market to various private companies, you can send out brochures inviting them to look into your services. It is even better to stop in and introduce yourself in person.
There are two factors that every business owner is going to have to address when starting a towing business and that is licensing and capital. Once those are in order, it is a process of understanding the local market and creating a campaign to maximize the chances of the businesses success.