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How To Start A Towing Business in 9 Steps

I look at my truck and think, money machine.


It seems like when I’m in my truck, my pockets are always full. When I’m in my truck, I’m making money and not spending.


Things weren’t always this nice. I started like most have, working for other companies.


This is a great place to start because you can gain so much knowledge and experience.


You’ll find out quickly if towing is something you really want to get involved with.


If you enjoy sleeping a few hours at a time, phone ringing at all hours of the day, and dealing with less than pleasant people, then towing is just for you.


Towing is not for the faint of heart but if you persevere and work your way through it, the reward will be what you imagine.


If this all somehow sounds appealing to you then you’re going to want to pay attention because I’m about to walk you through how to start a towing business.


I will point out tips and hacks to get around some of the problems I ran into when starting my towing company.


Some things you should take into consideration before you open up shop is what areas do you plan on serving?

Do you work near a big city or are you opening up somewhere out in the sticks?


It’s a lot easier to generate business in a populous area than it is a smaller one, but a much less populous area will have a lot less competition so keep that in mind.


Who are your competitors and how big of a threat are they to your business?


What are their rates?


What are the average rates for your area?


These are all things you should know before you start getting your name out there.


Do you have a storage lot? This can be a game changer if you do.


Private property impounding (PPI), repossession, and any other non-consensual work can greatly increase your bottom line.


If not, there are plenty of services you can provide, the obvious being towing.


Others include 24 hour roadside assistance, dead battery jump starts, spare tire changes, car door unlocking, vehicle winch outs, fuel delivery, junk car buying, motorcycle transport, equipment hauling, long distance, just to name a few.


Does your area require any special license? It’s recommended to get a business license although some areas do not require one.


Larger cities are often contracted with one company who are allowed to impound in that city. Check with your city for more information.


Ok, so now I’m going to walk you through 9 steps to starting a towing company. Check out the list of truck needs to see if you have everything you need to start right away.


1. Get a business phone


Get yourself a second line for your business phone. You’ll thank me later.


Pro Tip: ask your phone carrier's rep to get you a phone number that is easy to remember. If they can’t, wait for someone to call you that has a number you like and offer to buy it from them.


2. Register your business


The way to go about this is different in every state. Some states will allow you to register your business online, 24/7. Other states might have you standing in a line for four hours.


You’ll have to figure that out on your own but it’s a simple process.


I recommend registering your business as an LLC for liability reasons.


After you register your business, you’ll be given a TIN or Tax Identification Number. You’ll need this number to open a bank account and numerous other things.


Don't forget to pay your taxes. Depending on how much money you make, you may be required to pay bi-annually or even quarterly.


Go talk to an accountant for any questions, it's above my pay grade.


3. Open a bank checking account


Pretty self explanatory here. If you’ve never opened a checking account, then you might want to wait to start a business.


Maybe open a lemonade stand or something?


Make sure you know how to access your account and routing numbers. You’ll need them when you sign up for a merchant account.


A merchant account lets you accept credit and debit card payments. Most banks will offer you a service in house that usually comes with card readers.


I recommend finding yourself a merchant that has mobile card readers along with an app where you can refund, record transactions, and give receipts digitally on scene.


4. Get A USDOT/MC number


USDOT stands for United States Department of Transportation and the number is your permit number.


Your MC number (or ICCMC) is the number of your Motor Carrier permit which allows you to transport for hire in the US.


You can apply for them online and you'll find that there are many companies who charge to do it for you.


You’ll need to display these numbers on each side of your truck.


5. Truck Decals


Along with your DOT numbers, you’ll also need your towing company name on both driver and passenger sides.


Search online for someone to help you out with a logo design.


I paid a guy on fivver.com to design me a logo and it only cost $60.


He sent the logo in PDF format to my email. I then forwarded it to the sign shop I chose to print off and install on my truck.


The sign shop was a little spendy but I chose a reflective material that really pops at night. It was worth the extra costs for sure!


6. Drivers Requirements


In order to get behind the wheel of any tow truck, you will need a valid driver's license and a DOT health card.


This will allow you to haul up to 26,000lbs which is pretty much all your light and medium duty single axle trucks.


You can obtain a DOT health card from most chiropractic clinics.


They will perform a physical (you get to keep your clothes on) and then check any medications you might be on to make sure you're not falling asleep at the wheel.


7. Truck Preparation


There are a number of tools and equipment I highly recommend having on your truck and some are required by law. Let's go through it:


Requirements:

Fire Extinguisher

Warning Road Triangles

Company Name & USDOT/MC numbers displayed on both sides of the truck (these must be non-contrasting colors)

Truck must be inspected


Highly Recommended:

Jump Box

Spare Tire Change Equipment

  • Minimum 1 ½ ton low pro floor jack

  • Lug wrench with all sizes

  • Optional: impact gun

Door Unlock Tools

  • 2x air bags

  • Long reach tool

  • Damage free door pry tool

Gas Can, Floor dry

Depending on whether you have a rollback or a wrecker:

  • Skates, Dollies, motorcycle dolly, go jacks, light bar

  • Straps, tie downs, chains, 2x4’s,

  • Snatch block is a MUST on a rollback.


These things are strictly my opinion on how everyone should be set up:

  • hand tools

  • headlamp light/flashlight

  • bluetooth headset

  • a good maps app (Google Maps, Apple Maps, Waze, etc.)

  • in-cab phone holder

  • chargers (phone, headset, jump box, light bar, etc)



8. Insurance


To keep your rates from blowing up out of control, you need to handle any potential damage claims in house.


I highly recommend paying out of pocket to avoid any damage claims on your record.


Rookie Mistake: When I bought my first truck, it had a cracked windshield. I had $0 deductible glass coverage so I figured I would have it replaced and use my insurance to pay for it. I didn’t realize that my insurance company considered that a damage claim and I couldn’t get lower rates until enough time had passed.


Having drivers under the age of 26 will also result in higher insurance premiums.


Most motorclubs require a minimum of a $1,000,000 dollar policy.


Talk to your insurance agent to find out what they can do for you.


9. Get a computer


Ok, this isn’t required but it’s a lot easier managing a towing company from a desktop or a laptop than it is on a mobile device.


With that being said, The software you’ll want to keep your business running smoothly is towing software, accounting software, and some sort of marketing platform.


Towing Software - You have a few choices when it comes to towing software. I’ve been using Towbook the last few years and haven’t had any issues. Once you start to scale and grow your towing business, there might be better alternatives to Towbook. Towbooks prices have increased quite a bit since they started but they do have multiple packages to choose from.


A free option to go with is Swoop. Now, I know what you may be thinking and I don’t care for them either but it is a free option and they have enough features to keep you organized and running efficiently.

Accounting software - Quickbooks online, for me, is the quickest, easiest, most user friendly program you can use. It’s all online and you can access your account from anywhere there's internet available. Download their app to keep track of your money anywhere you go.


Tow Truck Marketing - To run a successful towing business, you’ll need to have a constant stream of towing calls coming in and the best way to generate new leads nowadays is online.


Period.


If you choose to do all your own marketing in house, there are 3 tools that are complete MUST HAVES in order to keep your tow phone ringing.


  1. Verified Google My Business Listing

  2. High Converting Website or Landing Page

  3. Google Ads


You are wasting your time and money if you’re trying any other alternatives. Don’t believe me? Go advertise on Yelp and let me know how that goes. You’re going to wish you hadn’t.


Getting your business online is no easy task.


It takes a lot of work and you need to be persistent and patient.


Buying a domain name, getting it hosted, designing then building the website, optimizing the Google My Business listing, keeping social media accounts updated and posting regularly, setting up a google ads campaign, finding and targeting the best keywords, and on, and on, and on.


IT'S A LOT!


You have other things to worry about which is why Cash Tows is so convenient.


Cash Tows takes care of all the computer stuff so you can take care of all the other hats you need to wear.


Tow truck operator, accountant, bookkeeper, mechanic, dispatcher...


If you’re a new towing company and are in need of cash tows, go check out CashTows.com.

We're completely affordable and we save you so much wasted time and headache.


You no longer need to worry about keeping calls coming in.


Many of the problems and struggles you’re running into, I’ve been through.


I can help you get your towing company noticed and your tow phone ringing.


I specialize in helping individuals who are new to the towing business but if you’ve been around for a while and just need more call volume, I’m sure I can help.


Reach out to me at cashtows.com and we'll get your tow phone ringing!


-Cash Tows Dave





*If you guys see anything I've missed, feel free to comment or send me a message at cashtowsdave@gmail.com. Thanks!



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