Are you looking for the best way to make money in the towing business? If YES, here are 10 best ways to make money in the towing business.
Every business needs a reliable marketing strategy to be able to reach clients and make more money. Indeed, vehicles break down, are left stranded, and are illegally parked every day. A tow truck business helps to transport these vehicles to repair shops, impound lots, and other locations. Some tow truck businesses also offer emergency roadside assistance.
Tow truck businesses tend to charge an average of $120 per tow (including both a flat fee and mileage charge). It is also standard practice to charge a daily storage fee for any vehicles that are stored on the company’s property. The average storage fee is $20 per day.
According to industry reports, an average tow truck business owner makes between $30,000 and $40,000 annually. However, this amount varies depending on the region the business is located in. Anyone who is mechanically inclined may be very much fit to start and manage a tow truck business.
Most tow truck businesses serve a single geographic region. In bigger metropolitan areas, they may only serve the city – or even just part of the city. In less-populated areas, they may cover more territory, but they are more or less still limited to one region.
In an industry where the primary obstacle is high competition, without a smart, effective, and data-driven marketing strategy, your towing business runs the risk of becoming directionless, wasting money on campaigns that don’t yield results, and losing out prospects to your competitors.
Tips and Strategies to Make Money in the Towing Business
It doesn’t really matter how good your towing services are… if you are stampeding into the towing industry without a marketing strategy, or if you haven’t revised your existing strategy, you are walking on thin ice. And it could crack at any time and swallow your business. So here are tips and strategies to help you make more money in this business.
Expand Your Capabilities
Your automotive towing business needs to be different in order to stand out from the competition. Note that this starts by determining the strengths of your towing business, and then promoting them in a cost-effective manner. You can open the door to more business and increased revenue by expanding your capabilities.
For instance, you may want to tow boats, motorcycles, and specialty vehicles in addition to passenger cars. Indeed, you need to have a tow truck that can tow these various types of vehicles. A tow truck business can diversify and increase its revenue by offering emergency roadside assistance. This usually includes providing emergency fuel deliveries, changing flat tires, offering jumpstart, and similar services.
Review Your Existing Marketing Strategy
Though this might seem obvious, but it is a critical part of an effective and profitable marketing strategy. Right before you can figure out how to tweak your marketing strategy in preparation for where you want your business to go, take your time to understand where you are.
What were your goals for a given period? Did you achieve them? Coupled with your marketing strategy, consider the specific marketing campaigns you launched and the tactics you tried. How did they work out?
Note that by taking your time to re-evaluate your marketing strategy for previous years, you will be able to extensively spot what worked for you and what hasn’t. Armed with this information, your marketing strategy can be tweaked, and future marketing campaigns can be tailored to replicate your success while avoiding failures.
Use Separate Checking Accounts
To start the process of getting control of your money and learning how to increase your towing business profits, you should start by maintaining two separate checking accounts, one for personal and one for business. Note that the personal account should only be used for items not associated with your business.
Meanwhile, all income and expenses associated with your business should be run through the business account. You should pay yourself a regular paycheck just like your employees and deposit that check into your personal account.
Identify Market Trends And Pay Close Attention To Your Competition
When developing or revising your towing business’s marketing strategy, don’t make the mistake of overlooking market trends or your competition. Although the automobile towing industry in the U.S. has no major companies, reports have it there are 40,000+ tow truck companies in the country, and these businesses likely have unique ideas about the best way to reach and retain customers.
So you are expected to carry out a competition analysis and figure out what tricks and tactics they have up their sleeves. Before you get the wrong idea, competitor analysis is not about replicating your competitors’ every move but instead about finding out what’s working for them so you can do it better and, in the process, uncover untapped opportunities.
Know Your Audience And Focus On Customer Preferences
Knowing and understanding your target audience will more or less change the way you communicate your brand message and even the language you leverage.
Don’t forget, your clients drive your tow truck business forward. Understanding what they want and need from your business will help you tailor your marketing strategy and campaigns to their preferences. When defining your target audience, NEVER make assumptions. To define your target audience, you must:
- Conduct market research to know exactly who your target audience is.
- Research your competition to identify who other tow truck businesses are targeting, and think about how you can do better.
- Create a buyer persona template. You will want to visualize your customers by asking questions about their motivations and behaviors, to the smallest details.
Leverage Content Marketing
Content marketing involves different media types, from videos to podcasts to blogs, and is an ideal way to promote your business in a way that gives useful information to your customers and prospects. Also, you will stand out as a ‘thought leader’ in the towing industry when you have great content.
In terms of digital marketing channels such as social media and content marketing, the traditional ‘hard sell’ tactics just won’t cut it! People don’t want to be bombarded and treated like nothing more than numbers. They prefer things that are relevant, meaningful, and useful to them.
That’s why social media and content marketing have become some of the most prominent and favorable marketing channels for marketers.
Focus On Storytelling, Not Selling
Have it in mind that your target customers’ ability to recognize the name of your tow truck business, its brand, and main services is a massive plus; however, it is only a stepping stone towards a profitable marketing strategy. But how do you go about making your tow truck business recognizable to your target audience?
It is very straightforward: just let your customers know, like, and trust your business. With a marketing strategy focused on storytelling, you will naturally increase brand awareness and equity. Storytelling is a powerful tool and can actively impact conversion rates.
Identifying, exploring, and utilizing collaborations and partnerships can go a long way in helping you reach your ideal customer.
Although your towing business can survive alone, it can only really grow when you develop effective partnerships with the community around you. Sometimes, developing partnerships and collaborations could give you access to a new customer base and help you achieve better results!
Hire an Accountant
As an entrepreneur, you will want to seek out a trusted accountant to properly guide you through setting up your books and the types of deductions you should be taking. Notably, you will want to take advantage of every available deduction and loophole that exists.
Only a licensed, competent accountant can help you here, ask the successful businessmen and women, that you know for a referral.
Get a Quality Tow Truck
The most vital part of your business is your tow truck. Without a top-quality tow truck that is in excellent running condition, your business might be presented with problems. If your tow truck breaks down and constantly needs maintenance, you are losing time and money, not to mention customers and potential referrals.
Without a focus on the things that matter, your marketing strategy may never help your towing business see the success it deserves. If your current strategy is underperforming, re-evaluate.
However, things like years of experience, level of customer service, number of tow trucks in your fleet, and types of vehicles you can tow are all important attributes. Include relevant information about your company in all of your marketing efforts, such as your website, business cards, and flyers.