How Much Does It Cost To Start A Towing Business

In the USA you can see there are many towing businesses in every city. It is grow based on how many people live and its terrain. As an example, you can see there are lots of Dallas towing company, that provides towing and emergency service to people.

Alone in Dallas, you can count 30-40 companies that provide towing related services. It can be a great option to start a towing business. You might be thinking how much does it cost to start a towing business?. Let me breakdown all the process and cost of starting a towing business.

Plan For Towing Business

Firstly you need to create a plan for your towing business. You need to decide where you will provide your service. There are many choices for you.

  • You can tow damaged card
  • You can tow for law enforcement
  • You can provide towing service to average locals

There are many reasons to choose any one of these. Because the different state has its own rules for towing business. As an example, Texas has some towing related rules which different than many other US stats. Try to pair up with some people that know your business, such as accounting firm, funding company, truck dealership, mechanic shop

Make It Official
It is the second phase to lunch your towing business. You need to make everything official for legal and branding purposes. People don’t like to take service from individuals than a company. It also can help you to provide a layer of financial protection for you. A legal entity can make it more professional.

Prepare You Tax

You cannot avoid taxes, from the beginning, you need to sort out this problem. You have to clear everything from the very beginning. For a single mistake, you might have to pay something big. So make sure your clear up all issues.

Towing Rules And Regulations

As I mentioned earlier, each state has its own rules for towing business. Most state doesn’t have similar rules for everyone. To know more you can go to the state’s Dept. of Transportation. They can tell you the limits and requirements of license and more stuff related to your business.

Get Insurance For Your Towing Company

This is one of the parts, that everyone hates. And the second most expensive thing after the equipment and tow trucks. You have to cover many different types of insurance to operate this business. That’s also includes

  • On-Hook Coverage
  • Auto liability
  • Property damage liability
  • Bodily injury liability
  • Physical damage insurance
  • Collision coverage
  • Comprehensive coverage
  • Garagekeepers insurance
  • Garage liability

This is some costly things that you have to pay. But without those you cannot run your business smoothly

Buying Equipment

You will need some essential equipment to run your business smoothly. Those are included as essential.

  • Fully equipped tow with accessories
  • Flatbed (For towing it is necessary)
  • Amber strobe lights
  • Floodlights
  • Flares
  • Traffic cones
  • Straps
  • Jacks
  • Battery booster ( If you provide jumpstart service than you need it for sure)
  • GPS
  • Booster cables
  • Lockout kit
  • Portable air compressor or air tank
  • Extra Fuel Tanks
  • Tire service tools
  • Overalls
  • Snowsuit for winter

And other essential office equipment

Starting a new towing business can cost nearly $150,000 to $2,000,000. It can be more if you choose to buy a new truck. But buying new upgraded equipment can save lots of money in the future by cutting down lots of energy cost and time.

Leave a Comment