Are you about starting a tow truck business? If YES, here is a complete sample tow truck business plan template & feasibility report you can use for FREE. Tow trucks basically help in towing broken down vehicles on the highway or from one location to another location as agreed. With this type of business, all you need to do is to polish your driving skills, learn the billing administration in the industry, register the business, join the appropriate union and then go all out there to market and promote your services.
A Sample Tow Truck Business Plan Template
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
1. Industry Overview
A tow truck which is also known as a wrecker, a breakdown truck, recovery vehicle or a breakdown lorry is a truck that is used to move broken down, improperly parked, impounded, or otherwise indisposed motor vehicles away from to the road so as to avoid obstruction of free flow of traffic.
Companies in the Automobile Towing are responsible for towing light or heavy motor vehicles over short and long distances. As a way of earning additional income and improving revenues, players in this industry may also provide incidental services, such as storage and emergency road repair services et al.
In the united states, automobile towing trucks, large trucks and buses drivers require a commercial driver’s license (CDL) before they can be permitted to operate. The activities in the towing truck industry is regulated by the United States Department of Transportation (USDOT), the Federal Motor Carrier Safety Administration (FMCSA) and the Federal Highway Administration (FHWA).
They ensure that drivers and towing truck companies adhere to safety rules and regulations and also that potential towing truck drivers undergo special training on how to handle large vehicle before applying and obtaining their commercial driver’s license (CDL).
A report published by IBISWORLD shows that, over the five years to 2016, revenue for the Automobile Towing industry has grown, due to improving economic conditions, particularly at the consumer level. In addition, the average age of vehicles on the road increased, resulting in more repairs and towing services. The report also stated that in the five years to 2022, revenue for the industry is expected to trend higher.
As the economy continues to rebound, disposable income rises and more people go back to work, roads will become more crowded. The more cars on the road, the more likely towing companies will attend to vehicle issues because it will definitely crop up.
The Automobile Towing Industry is indeed a very thriving industry in most countries of the world. It is a major sector of the economy of the United States and it generates a whooping sum of well over $6 billion annually from more than 34,479 registered and licensed automobile towing truck companies scattered all around the United States of America.
The industry is responsible for the employment of well over 81,670 people (professional drivers and administrative staff members). Experts project the industry to grow at a 1.3 percent annual rate from 2011 to 2016. There is no establishment in this industry that has a dominant market share in the United States.
No doubt starting and operating a towing truck business can be financially tasking and challenging, but the truth is that it can be rewarding at the same time. One good thing about the industry is that it is open for both big time investors who have the capacity to start the business with fleet of towing trucks and aspiring entrepreneurs who may one to start with just one towing truck.
2. Executive Summary
Safe Haven® Towing Truck Services, LLC is a standard registered and licensed towing truck company that will be based in 8009 ND Highway 26 Belle Fourche – South Dakota.
We will provide essential services to the United States economy by move broken down, improperly parked, impounded, or otherwise indisposed motor vehicles away from to the road so as to avoid obstruction of free flow of traffic; towing light or heavy motor vehicles over short and long distances.
Our services and operations will center around highways in an around South Dakota, North Dakota, Southern Illinois; St Louis, Missouri; Southeast Missouri; Evansville, IN; Nashville, Tennessee; Memphis, Western Kentucky, Tennessee and Chicago land areas et al.
Safe Haven® Towing Truck Services, LLC has been able to secure all the relevant license and permits to operate throughout the United States. We will ensure that we abide by the rules and regulations guiding the automobile towing industry and we will only hire experienced and qualified drivers with valid commercial driver’s license (CDL).
At Safe Haven® Towing Truck Services, LLC, our clients’ overall best interest would always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we put standard structures and processes in place that will enable us meet and surpass our business goals and also stay highly competitive in the industry.
Our customers and potential customers alike can be rest assured that they will get quality services at competitive rates when they hire our services. We will go the extra mile to ensure the safety of vehicles under our care and our customers get value for their money.
At Safe Haven® Towing Truck Services, LLC our goal is to provide excellent towing truck service to our customers and we pride ourselves on the integrity and competence of our company and our employees. Safe Haven® Towing Truck Services, LLC will ensure that all our deliveries are on time and we supersede the expectation of our customers.
We will only put towing trucks that are in top shape on the road, and all our towing truck drivers will be trained to be courteous, friendly and to abide by the rules and regulations of the industry. We will maintain and take proper care of all our towing truck drivers as well as our towing trucks and equipment.
Safe Haven® Towing Truck Services, LLC will at all times demonstrate her commitment to sustainability, both individually and as a pet sitting services business, by actively participating in our communities and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our clients’ needs precisely and completely. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our clients.
Our overall business goal is to position Safe Haven® Towing Truck Services, LLC to become one of the leading towing truck company brands in the United States of America within the first 5 years of operations.
This might look too tall a dream but we are optimistic that this will surely come to pass because we have done our research and feasibility studies and we are enthusiastic and confident that South Dakota is the right place to launch our towing truck business.
Safe Haven® Towing Truck Services, LLC is a family business; it is owned by Casey Hartford and his immediate family. Casey Hartford has a Diploma in Transport and Logistics with well over 10 years of hands on experience working for some of the leading brands in the United States of America.
3. Our Products and Services
Safe Haven® Towing Truck Services, LCC is a company that looks forward to deliver excellent services in terms of helping our customers move their broken down vehicles from one destination to another destination. We want to be known as the towing truck company that truly cares for her customers.
Our intention of starting our towing truck company is to favorable compete in the industry and of course to make profits from the industry and we will do all that is permitted by the law in the United States of America to achieve our aim and business goal. Our business offering are listed below;
- Emergency road repair services
- Motor vehicle towing services
- Tow truck services
- Wrecking services for motor vehicles
- Passenger car towing services
- Light duty truck towing services
- Roadside assistance services
4. Our Mission and Vision Statement
- Our Vision is to become one of the preferred choices when it comes to the demand for towing truck services in the whole of the United States of America.
- Our mission is to ensure that we build a towing truck company that will operate in the whole of the United States of America; a company that will boast of having some of the best and reliable towing truck drivers in the whole of the United States of America.
Our Business Structure
At Safe Haven® Towing Truck Services, LLC, our business structure will be designed in such a way that it can accommodate but full – time employees and part – time / contract staff; those who just want to take some time off to generate additional incomes.
We intend starting our towing trucking company with a handful of full time employees (professional towing truck drivers and back office staff) and some of the available towing truck driving roles fill be handled by qualified contract truck drivers.
Adequate provision and competitive packages has been prepared for all our full – time employees. As a means of maximizing operational cost, we will contract the maintenance of all our towing trucks to service provider, we don’t intend to maintain a very large overhead from the onset.
But as soon as the business grow and stabilize, we will assemble our own professional in – house maintenance team. Below are the business structure and the roles that will be available at Safe Haven® Towing Truck Services, LLC;
- Chief Operating Officer (Owner)
- Admin and HR Manager
- Transport and Logistics Manager
- Sales and Marketing Manager
- Professional Towing Truck Drivers
- Client Service Executive / Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Reports to the board
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
- Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversee the smooth running of the daily office activities.
Sales and Marketing Manager
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
Transport and Logistics Manager
- Responsible for coordinating towing truck drivers
- Responsible for operating IT systems for the organization
- Responsible for negotiating and agreeing contracts for the organization
- Responsible for developing and confirming schedules
- Responsible for planning for and negotiating technical difficulties
- Responsible for preparing paperwork for regulatory bodies
- Responsible for liaising and managing staff
- Responsible for implementing health and safety standards
- Handles the planning routes and load scheduling for multi-drop deliveries.
- Handles booking in deliveries and liaising with customers.
- In charge of allocating and recording resources and movements on the transport planning system.
- Responsible for communicating effectively with clients and responding to their requirements.
- In charge of directing all transportation activities.
- Responsible for developing transportation relationships.
- Responsible for monitoring transport costs.
- In charge of negotiating and bargaining transportation prices.
- Responsible for dealing with the effects of congestion.
- Responsible for confronting climate change issues by implementing transport strategies and monitoring an organization’s carbon footprint.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managers with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Tow Truck Drivers
- Drives towing trucks
- Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
- Keeps a record of vehicle inspections and make sure the towing truck is equipped with safety equipment, such as hazardous material placards.
- Assists the transport and logistics manager in planning their route according to a delivery schedule.
- Inspects vehicles for mechanical items and safety issues and perform preventative maintenance
- Complies with towing truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
- Collects and verify delivery instructions
- Reports defects, accidents or violations
Client Service Executive
- Welcomes / receive clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with parents and students on the phone, uses every opportunity to build clients’ interest in the organizations’ products and services
- Manages administrative duties assigned by the HR and Admin Manager or Transport & Logistic Manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
- Receives parcels / documents for Safe Haven® Towing Truck Services, LCC Distribute mails in the organization
- Handles any other duties as assigned by HR and Admin Manager or Transport & Logistic Manager.
6. SWOT Analysis
Our intention of starting Safe Haven® Towing Truck Services, LCC in South Dakota with operations center around major highways in an around South Dakota, North Dakota, Southern Illinois; St Louis, Missouri; Southeast Missouri; Evansville, IN; Nashville, Tennessee; Memphis, Western Kentucky, Tennessee and Chicago land areas et al is to test run the business for a period of 3 to 6 months to know if we will invest more money, and expand the business all around in the United States of America.
We are quite aware that there are several towing truck businesses all over the United States and even in the same locations where we intend starting ours, which is why we are following the due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be well – equipped to confront our threats.
Safe Haven® Towing Truck Services, LCC employed the services of an expert HR and Business Analyst with bias in start – ups to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Safe Haven® Towing Truck Services, LCC;
Our strength are highly qualified and experienced management team, robust fleet operations, direct access to all Atlantic and Gulf Coast ports, our towing truck transportation network serves covers some of the largest population centers and highways in the U.S., size advantages, cost advantages, supply chain, customer loyalty and strong reputation amongst domestic industry players will surely count as a strength for Safe Haven® Towing Truck Services, LLC.
Our weakness could be lack of finance, high debt burden, cost structure, lack of scale compared to our peers who have already gained ground in the automobile towing industry.
The opportunities that are available to us as a towing truck company operating in the United States of America are online market, new services, new technology, and of course the opening of new markets within our target locations. In addition, as the average age of vehicles on the road increased, it will surely result to more repairs and towing services.
Some of the threats that we are likely going to face are mature markets, bad economy (economy downturn), stiff competition, volatile costs, and rising fuel prices. Basically, just like any other business, one of the major threats that we are likely going to face is economic downturn.
It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a towing truck company in same location where ours is located. unfavorable government policies can also pose a major threat to businesses such as ours.
7. MARKET ANALYSIS
- Market Trends
The market trends as it involves the automobile towing industry especially in the United States of America and Canada is indeed dynamic and at the same time highly competitive and challenging.
But one thing is certain, once a towing truck company can gain credibility; it will be much easier for the company to secure permanent deals / contracts with big time merchants and haulage / transportation companies who are always moving goods and equipment from one part of The United States of America to another part.
No doubt some of the major factors that counts positively in this line of business are trust, honesty, good relationship management and of course timely and safe delivery.
The advancement in technology in areas such as computers, satellite communication, and the internet, has contributed immensely to the growth of the automobile towing industry. The advancement in technology is responsible for increase of productivity of towing truck companies operations, it helps them effectively monitor their towing trucks and their drivers and it helps driver save time and effort.
Lastly, another common trend in this industry is that once a towing truck company has gained credibility, it is easier for them to go for brand new towing trucks on a long term leasing contract as against making use of second hand towing trucks which are usually expensive to maintain due to constant wear and tears of essential parts of the towing truck.
8. Our Target Market
Our target market is basically transportation and haulage companies and of course every individual we own cars throughout the United States of America. We cover both short distance (inter states) and long distance (intra states).
To move broken down, improperly parked, impounded, or otherwise indisposed motor vehicles away from to the road so as to avoid obstruction of free flow of traffic; towing light or heavy motor vehicles over short and long distances.
In other words, our target market is the whole of the United States of America and below is a list of the people and organizations that we have plans to do business with;
- Vehicle owners
- Transportation companies
- Haulage companies
We are aware of the competitive nature of the automobile towing industry and we are ready to get into the mix and favorably compete with players in the industry. Our major competitive advantage is the vast industry experience and solid reputation of our owner, Casey Hartford and our management team.
Safe Haven® Towing Truck Services, LLC no doubt is a new towing truck company, which is why we took our time to do a thorough market research and feasibility studies before launching the business. We were able to highlight some factors that will give us competitive advantage in the marketplace.
Some of the factors are trust, honesty, good network and excellent relationship management, well – qualified and experienced management team, robust fleet operations, direct access to all major highways, our trucking transportation network serves some of the largest population centers and construction sites in the United States of America and Canada, our size advantages, cost advantages, customer loyalty and strong reputation amongst domestic industry players.
Lastly, our employees (tow truck drivers and back office staff members) will be well taken care of, and their welfare package will be among the best within our category (startups tow truck companies in the United States) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Safe Haven® Towing Truck Services, LLC will ensure that we leverage on our strength and the opportunities available to us in the U.S. and Canada market to generate enough income that will help us drive the business to stability. We will go all the way to explore every available sources of income in the automobile towing industry.
Below are the sources we intend exploring to generate income for Safe Haven® Towing Truck Services, LLC;
- Emergency road repair services
- Motor vehicle towing services
- Tow truck services
- Wrecking services for motor vehicles
- Passenger car towing services
- Light duty truck towing services
- Roadside assistance services
10. Sales Forecast
One thing is certain, there would always be vehicle owners, haulage and transportation companies who would need the services of towing truck companies to help them move their broken down vehicles from one location to another throughout the United States of America.
We are well positioned to take on the available market in the United States of America and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow our business and our clientele base.
We have been able to critically examine the automobile towing industry market in the United States of America and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in The United States of America.
Below are the sales projection forsake Haven® Towing Truck Services, LLC, it is based on the location of our towing truck company and of course the wide range of services that we will be offering;
- First Fiscal Year-: $250,000
- Second Fiscal Year-: $550,000
- Third Fiscal Year-: $900,000
N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. So also, there won’t be any major competitor (towing truck company) offering same additional services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
No doubt, networking is an effective way to begin building your client base as a business man or woman and we have plans in place to leverage on all our networks. In view of that, we will look out for gatherings where we can network with vehicle owners, transport and haulage companies and merchants et al.
As a matter of fact, our first port of call will be to connect with the nearest Chamber of Commerce; we are likely going to get our first major deal from them. At Safe Haven® Towing Truck Services, LLC all our employees will be directly or indirectly involved in sales and marketing of our services.
We will create provision for our employees to earn commission when they bring in business for the organization. We will also encourage freelancers to work with us; whenever they refer clients to us they will earn a percentage of the deal as agreed by both parties.
Lastly, we will leverage on the power of the media by advertising our services using both online and offline platforms. We will work hard to ensure that get repeated business from any business deal we execute and also we will encourage our customers to help us refer their friends to us. Part of our strategy is to reward loyal customers and to leverage on word of mouth marketing from satisfied customers.
Over and above, we have perfected strategies to network with people who are likely to refer business our way on a regular basis. In summary, Safe Haven® Towing Truck Services, LLC will adopt the following sales and marketing strategies in sourcing for clients for our business;
- Introduce our business by sending introductory letters alongside our brochure to households, corporate organizations, businesses in the transportation and haulage industry and related industries in South Dakota and throughout the United States.
- Print handbills about our towing truck business and its locations and drop them in public facilities.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get our message across, so that those on the social media or those who read blogs can know where to go when they need the services of a towing truck company
- Creating a basic website for our business, so as to give our business an online presence
- Directly market our towing truck business.
- Join local towing truck cum trucking associations and chambers of commerce for industry trends and tips
- Provide discount days for our customers
- Advertise our business in community based newspapers, local TV and radio stations
- List our business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Despite the fact that our towing truck company will be well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our business.
Safe Haven® Towing Truck Services, LLC has a long term plan of covering various locations in major cities in the United States which is why we will deliberately build our brand to be well accepted on highways in an around South Dakota, North Dakota, Southern Illinois; St Louis, Missouri; Southeast Missouri; Evansville, IN; Nashville, Tennessee; Memphis, Western Kentucky, Tennessee and Chicago land areas et al before venturing out to other cities in the United States of America.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Safe Haven® Towing Truck Services, LLC;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, et al to promote our brand
- Install our Bill Boards on strategic locations all around South Dakota
- Engage in road show from time to time
- Distribute our fliers and handbills in target areas
- Position our Flexi Banners at strategic positions in the location where our photo booths are located.
- Ensure that all our workers wear our branded shirts and all our dump trucks are well branded with our company’s logo et al.
12. Our Pricing Strategy
Safe Haven® Towing Truck Services, LLC has a lease arrangement with various companies and the company’s pricing is based on miles per vehicle moved. We have perfected our plans to charge competitive rates since we have minimal full – time overhead compared to our competition in the industry.
We will ensure that we leverage on price to win over customers; our prices will be affordable and negotiable. The fact that our business door is open to both individuals and corporation organizations means that we will have different price range for different category of clients. As the business grows, we will continue to review our pricing system to accommodate a wide range of clientele.
- Payment Options
At Safe Haven® Towing Truck Services, LLC, our payment policy will be inclusive because we are quite aware that different people prefer different payment options as it suits them but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions. Here are the payment options that Safe Haven® Towing Truck Services, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards / Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for farm produces purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our services.
13. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a towing truck company; it might differ in other countries due to the value of their money.
When it comes to starting a towing truck company the major areas that you look towards spending the bulk of your cash is in the purchase of standard towing trucks and of course renting or leasing a well located facility / yard large enough to accommodate your fleets of towing trucks.
Aside from that, you are not expected to spend much except for paying of your employees, maintaining your towing trucks and fueling. These are the key areas where we will spend our start – up capital;
- The Total Fee for incorporating the Business in the United States of America – $750.
- The budget for Liability insurance, permits and license – $2,500
- The Amount needed to acquire a suitable Office facility with enough parking space for our trucks in South Dakota for 6 months (Re – Construction of the facility inclusive) – $40,000.
- The amount required to finance the purchase of the first set of towing trucks – $800,000
- The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $5,000
- Cost of accounting software, CRM software and Payroll Software – $3,000
- Other start-up expenses including stationery – $1000
- Phone and Utilities (gas, sewer, water and electric) deposits – ($3,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost of launching our official Website – $600
- The Amount needed to pay staff for the first 2 months – $20,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
Going by the report from our market research and feasibility studies, we will need an estimate of $1.2 Million to set up a standard towing truck company in South Dakota.
Generating Funds / Startup Capital for Safe Haven® Towing Truck Services, LLC
Safe Haven® Towing Truck Services, LLC is a family business that will be owned and managed by Casey Hartford and his immediate family. They are the sole financial of the business which is why they decided to restrict the sourcing of the start – up capital for the business to just three major sources.
These are the areas we intend generating our start – up capital;
- Generate part of the start – up capital from personal savings and sale of his stocks
- Generate part of the start – up capital from friends and other extended family members
- Generate a larger chunk of the startup capital from the bank (loan facility).
N.B: We have been able to generate about $400,000 (Personal savings $350,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $800,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of any business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.
One of our major goals of starting Safe Haven® Towing Truck Services, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to engage in affordable, timely, safe and efficient towing services at all times.
Safe Haven® Towing Truck Services, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of All form of Insurance for the Business: Completed
- Acquiring of towing trucks and relevant equipment: In progress
- Leasing of Office Facility / Yard large enough in South Dakota: Completed
- Conducting Feasibility Studies: Completed
- Start – up Capital Generation: Completed
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
- Recruitment of employees and drivers: In Progress
- Purchase of the Needed furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with key players in the industry (networking and membership of relevant organizations and chambers of commerce): Completed
Frequently Asked Questions
How much can a Flatbed Tow Truck haul?
The maximum weight capacity for any flatbed truck can vary depending on several factors. But in general, you can expect the weight capacity to be somewhere around: A 24-foot, three-axle truck can give you a maximum load of 54,000 pounds. A 36-foot, four-axle truck can give you a maximum load of 66,000 pounds.
What Type Of Insurance Do You Need As A Tow Truck Company?
The main areas that many tow truck plans will cover are: Auto liability insurance (including bodily injury and property damage), Medical payments insurance and Physical damages coverage.
Who Is The Target Market For A Towing Business?
The business model that a tow truck business follows will partially determine its target market. A towing business that offers services to consumers for roadside assistance will target drivers, auto repair shops, car dealership shops and insurance companies within its service area.
How Much Can You Potentially Make Owning A Towing Business?
The average tow truck business owner makes between $30,000 and $40,000 annually. The exact amount varies depending on the region that a business is in.
What Are The Ongoing Expenses For A Towing Company?
The ongoing expenses for a towing company are salaries, fueling cost, servicing and maintenance cost and other utility cost.
What Is A Rotator Tow Truck?
A rotator tow truck is one of the heaviest and the largest tow trucks available. It has several varieties. While some certain types of heavy-duty tow trucks feature a fixed boom, others have pivoting parts. The rotator tow truck is one of the pivoting varieties but it features a crane-like arm.
How Much Does It Cost To Start A Tow Truck Business?
The startup cost for a tow truck business can be anywhere from $150,000 to $2,000,000. Your monthly expenses will also be higher if you choose to purchase a new truck. With that said, many towing businesses choose to finance their tow trucks through tow truck financing.
Are Tow Truck Drivers Considered First Responders?
Yes, they are a group of first responders who are often overlooked. Tow truck operators are first responders.
How Much Does It Cost To Build A Tow Truck Business?
The startup costs associated with opening a tow truck business are substantial, mainly because business owners must purchase a tow truck. Truck Paper lists tow trucks that are for sale, and they often sell for between $10,000 and $50,000. Licensing fees are another major startup expense.
How Do I Start My Own Towing Company?
- Choose which type of tow truck business to open
- Calculate your expenses and purchase equipment
- Acquire funding, choose a business entity, register your business, and obtain federal and state tax ID numbers
- Obtain the necessary licenses and permits
- Select a location
- Buy insurance coverage
- Market your tow truck business
What Are The Costs Involved In Opening A Towing Company?
- The cost of registering the business
- The cost of acquiring the required licenses and permits
- The cost of acquiring commercial driver’s license CDL
- The cost of purchasing tow trucks
- The cost of writing a business plan
- The cost of printing publicity and marketing materials
- The cost for the purchase of insurance cover
- The cost of paying your employees
- The cost of renting a parking lot and operational facility
Do You Need To Purchase Or Lease A Tow Truck?
It depends on what you want and your financial capacity.
How much does a 50-ton rotator tow truck cost?
The Rotator is the biggest, baddest wrecker made in America. Yates’s version cost $259,000, and the truck beneath it (a long-nose Peterbilt 379) cost $150,000-for a total of $409,000. Its boom extends 30 feet and lifts in 360 degrees-hence the Rotator moniker.
Is Buying A Tow Truck A Good Investment?
Purchasing a towing license and tow truck in an urban area can cost you as much as $200,000 with no towing accounts in place. Overall, starting an automotive towing business can be a terrific and profitable business venture, providing a license can be obtained or purchased at a reasonable price.
How Much Does It Cost To Hire A Tow Truck Service?
The average cost to hire a tow truck service is $75 to $125. Most towing companies have a minimum charge of $50 for the first 5 to 10 miles
How Much Do Tow Lots Charge Per Day?
A daily storage charge of between $5.00 and $20 per day or part of a day for a car that is 25 feet long or less. A VSF must charge $35 per day or part of a day for a car that is longer than 25 feet.
How Do Tow Trucks Make Money?
A tow truck business makes money by charging customers for tows. A typical charge will include a flat fee for the tow, a mileage fee, and a storage fee.
How Much Can You Make If You Own Your Own Truck?
According to Indeed, an independent truck driver’s gross pay averages $183,000 per year, but expenses can run over 70% percent. Thus, the average owner operator pay drops to around $50,000-$60,000 take-home. Many independent truck drivers sign with a carrier to get consistent work.
Does Collision Cover Towing?
If the tow truck towing your car is in an accident, the at-fault driver’s insurance will pay for damage to your vehicle, just like if you were in an accident while driving. And if you have collision coverage, you’ll likely be covered if your car is damaged while it is being towed.
Is A Tow Truck a Good Investment?
The towing industry is only a good business for the owners of a tow company. An owner only makes good money if he invests into it and is smart enough to run it efficiently. Drivers of towing companies, on average, don’t make good money and are subject to being on-call 24/7.
Are Tow Trucks Allowed To Speed?
Yes, they can speed as long as they have the emergency equipment (lights and siren) activated and they can run red lights with emergency.
What Services Do Car Towing Companies Offer To Customers?
These are the core services car towing companies offer to their customers;
- Heavy Duty Towing
- Big Rig Towing
- Exotic & Classic Car Towing
- Limo Towing
- Long Distance Towing
- On & Off road Vehicle Recovery
- 24/7 Roadside Assistance.
Can You Start A Truck Business Without Having To Drive It?
Yes, it is possible to start a trucking company without actually having trucks or driving the truck. You can simply become a broker.
Why Are Tow Trucks So Expensive?
Tow trucks are so expensive because they offer rescue services. Also, remember, tow trucks have to pay for their gas in their truck (which isn’t cheap), they have that extra load (your vehicle) which is using even more gas, it is straining the drivetrain of their truck so the possibility of them having to soon replace a transmission ($1800+ easily) or so is much higher.
What Happens During A Typical Day At A Towing Company?
- Inspecting and warming the tow trucks upon resumption
- Cleaning the tow trucks and topping waters and other fluids that is needed to keep the tow truck functional and in good shape
- Fueling the tow trucks
- Ensuring that all towing hook and accessories are in order
- Open the phone line for customers
- Once the service is requested, negotiate the fee
- Go to the location to tow the vehicle from one point to another
- Return back to base
What Do You Think Will Be Required To Open Up A New Tow Truck Business?
- Get a Commercial Driver’s License
- Apply for Your Federal DOT and Motor Carrier Authority Numbers
- Complete Your Unified Carrier Registration (UCR)
- Get an International Registration Plan (IRP) Tag
- Understand Heavy Use Tax Regulations
- Obtain an International Fuel Tax Agreement (IFTA) Decal
- File a BOC-3 Form
- Get A Standard Carrier Alpha Code (SCAC)
What Are The Laws On A Tow Truck Damaging A Vehicle While Towing?
In any accident towing scenario, whether the towed vehicle or tow truck causes damage, the driver is often held responsible for any damages sustained. A number of factors come into play. One critical aspect is if your car was subjected to unprofessional or improper towing that led to the damages.
Is A Tow Truck A Good Investment?
Yes of course a tow truck is a good investment. This is so because the average tow truck business owner makes between $30,000 and $40,000 annually. The exact amount varies depending on the region that a business is in.
How do I become a Tow Truck Driver in California?
Pass the pre-trip inspection which tests your knowledge of the vehicle and its operation, and the driving test to complete the licensing process. You have three chances to pass both. Once you pass all required tests, you will be issued a Class B driver’s license, which allows you to operate a tow truck legally.
Do You Need A CDL To Drive A Tow Truck In Texas?
If the GCWR of the tow truck is 26,001 pounds or more and the towed vehicle alone exceeds 10,000 pounds GVWR, then the driver needs a Class A CDL.
How Do I Register A Tow Truck In Texas?
To be eligible, you must:
- Complete the online application
- Hold a valid driver’s license issued by a state in the United States
- Pass a background check; and
- Pay the consent tow operator license fee of $100
Is Driving A Tow Truck Dangerous?
Tow truck drivers have one of the most dangerous jobs out there. A 2019 study by the National Occupational Injury Research Symposium found a risk of being killed on the job of 15 times higher than other occupations. The risk of injury for tow truck drivers is more than double that of other jobs.
How Much Does a Tow Truck Driver Make?
The tow truck driver salary according to Salary.com, as of May 2020, in the U.S. is $53,471. The reported median hourly wage is $26.
Is Tow Trucking A Good Business?
Purchasing a towing license and tow truck in an urban area can cost you as much as $200,000 with no towing accounts in place. Overall, starting an automotive towing business can be a terrific and profitable business venture, providing a license can be obtained or purchased at a reasonable price.
How Is Towing Price Calculated?
The average cost to hire a tow truck service is $75 to $125. Most towing companies have a minimum charge of $50 for the first 5 to 10 miles, then $2 to $4 per mile after.
Can You Negotiate Towing Fees?
You can negotiate a towing with a company according to the laws of your state. If a towing company violates your right, you can request for tow hearing at the peace court, dispute towing charges, or even have the tow company pay for damages.
What Is The Biggest Tow Truck In The World?
The Rotator is the biggest, baddest wrecker made in America.
How Much Does It Cost To Tow A 18 Wheeler?
It would probably cost anywhere from $500 to $25,000 or more to upright and tow away an 18-wheeler.
How Much Does Off Road Towing Cost?
If you have driven along spaces like hiking trails not designed for vehicles, the costs to get you out of a tight spot could skyrocket to several thousand dollars, depending on the work involved. On average, though, a typical recovery like sliding off a nearby wet forest road will cost about $300 to $500
How Do You Negotiate A Towing Fee?
You can negotiate a towing fee by following these steps;
- Pay the Fine and Seek Reduction/Refund
- Use the Towing Sign
- Dispute the Drop Fee Instantly
- Buy Back as Auction
- Appeal the Original Ticket
How Much Do Tow Truck Operators Make An Hour?
A tow truck operator make an average of $20 to $30 per hour.
How Do I Start A Successful Towing Business?
7 tips for running a successful tow truck business are;
- Put safety first. Always.
- Have safety policies.
- Be careful when you’re hiring tow truck drivers.
- Train your drivers.
- Set up a pre-trip vehicle inspection procedure
- Establish a preventive maintenance program.
- Get the right tow truck insurance for your business.
Does Car Insurance Include Roadside Assistance?
Usually, if you want to purchase a roadside assistance rider through your auto insurance company, you will need collision and comprehensive coverage. Roadside assistance coverage is often a benefit that you can add on to your current auto insurance policy.
How Much Do Heavy Duty Tow Truck Operator Jobs Pay A Year?
The average annual pay for a Heavy Duty Tow Truck Operator Job in the US is $58,798 a year.
How Much Do Wreckers Charge Per Mile?
Most towing companies have a minimum charge of $50 for the first 5 to 10 miles, then $2 to $4 per mile after. Factors to consider in towing a car are distance, type of vehicle, and the time of day.
What is a Heavy Wrecker?
An employee in this class operates a heavy duty wrecker capable of towing a variety of large automotive equipment such as tractor trailers, compactors, and heavy duty dump trucks and performs light maintenance on downed vehicles.
What Is The Difference Between A Tow Truck And A Wrecker?
The major differences between a wrecker driver and a tow truck driver are their employers and the scope of their duties. While both positions require you to tow cars, a tow truck driver typically only tows vehicles. They do not generally perform repair or maintenance work, while a wrecker driver is authorized to do so.
Does Insurance Cover Towing Fees?
For the most part, towing is not covered if you only have liability. Expect to pay out of pocket for any roadside assistance, including towing. If there was an accident and you were not at fault, the other driver’s insurance will pay for damages incurred to your car, as well as any towing expenses, too.
How Do You Start A Tow Truck Business In California?
- Get the required trainings and experience
- Choose a name and register the business (Preferably DBA)
- Draft a detailed Business Plan and market strategy
- Secure the needed licenses and permits (commercial driver’s license CDL important)
- Apply for an EIN (Employer Identification Number)/Federal Tax ID Number.
- Open a corporate bank account
- Acquire your tow trucks
- Hire employees
- Promote and Market your business