QuestionI am looking to start a towing business, and would appreciate any info you can provide me with such as start up cost, insurance, necessary license info, etc. Also if you could provide me with any info on grants or loans that might be available in Suitland, Maryland. Thanks!
AnswerFirst of all, insurance costs will be based on your driving record, the value of the truck, what kind of towing you are going to do (commercial, dealership, retail, police towing, private property towaways, motor club towing) as there is On Hook, Garagekeepers, Liability, and all kinds of other insurances.
Each of them will have different requirements due to your city, county or state requirements, and you did not mention where you are.
Then there are state business licenses, city business licenses, tax identification numbers to just name a few things.
And there is also the factor of what kind of tow truck you have, as to what you will be doing, Flatbeds can do more things but are also limited in operations also. A boom or recovery truck can do things that a flatbed can not do also.
As to other issues, well there is fuel for the truck, repairs, tires towing supplies which break or wear out,along with basic supplies needed such as pens, invoices, business cards, phones, to name a few.
And if you are going to do any accidents, impounds or police tows then you will need an office and a storage yard, which also requires more insurance.
Then you have to have a paycheck, so that is part of the expenses you will have.
As to staying open 24 hours a day / 7 days a week, well that again depends on what kind of towing you are going to be doing. After all you do not want to miss any of your customers calls.
Grants or loans, well that is a whole different ball game and you have to look for your own financing. This business is not one where there is quick cash flow, as most places want you to bill them for the services you provide and that means that you will be "out of pocket" a lot of expenses for a while (possibly up to 6 months on some accounts due to games and billing methods)
How to find customers, well you have to just go out and talk to businesses and such. Yes there are motor clubs and such but they tend to pay lower than retail rates and take time to pay you... Motor club towing is not for everyone.
I really wish that I could provide you more information, but if you do not have any towing experience it might be worth while to get a job in the industry for about a year to see if it is something that you really want to spend the money on...
Also you can check out a few of the online towing forums and read some stuff about the business also...
You will gain great insight into the business if you just spend some time reading and listening to people there talk and discuss issues. You may find out that you do not want to go into the towing business as an owner but maybe as a driver.
(JUST FOLLOW THE RULES OF THE FORUMS and you will gain a lot of information..)
www.tow411.net
www.towtalk.net
www.priceperpound.info
