Vehicles break down on the freeway every other day. Others get stranded in the middle of nowhere due to unfavorable weather or unforgiving terrains. A lot more are illegally or wrongfully parked.
All these categories of vehicles share one fundamental thing in common – they all need to be towed away to safety, repair shops, and other locations as directed by the owner or law enforcement officers. Perhaps this explains the ever-growing demand for truck towing services.
But as an investor considering venturing into the vehicle towing business, there are certain things to bear in mind before taking the plunge. This article highlights a few questions to settle before starting a truck towing company.
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Do You Have A Passion For Truck Towing?
A lot of people venture into business with the primary intention of profit-making. There’s nothing inherently wrong with that.
But when it comes to running a successful venture that can stand the test of time, passion should override the profit motive. Therefore, determine that you’re passionate about the whole art of truck towing even before plunging into this business.
What Are The Benefits Of A Towing Company?
A towing company offers several benefits.
Profit-making is one of the main advantages of venturing into this industry. Towing companies can net millions of dollars in annual profit under the right conditions.
Continuity is another reason to venture into the truck towing business. Regardless of location or season, vehicles will always be stranded and need roadside assistance.
A towing company also offers a sense of personal fulfilment. These feelings come from the fact that you’re helping others during their most vulnerable moments.
Last but not least, anyone can start a towing company. You don’t need professional experience to run a successful truck towing business. You don’t even need to be a driver yourself, provided you can hire someone else for the job.
Do You Have the Right Truck
A tow truck is an essential purchase required to run a truck towing company. But tow trucks vary significantly in price and functionality.
The following are the common types of tow trucks you might consider investing in;
- Flatbed trucks – A long truck designed with an empty bed and a flat top.
- Hook and Chain tow truck – A truck with a hook and chain, mainly suited for towing car wreckages into the junkyard.
- Integrated tow truck – A heavy-duty truck typically equipped with extra axles for hauling large vehicles, such as buses and trucks.
What Are the Requisite Accessories?
After identifying the right truck for your towing company, the next step is assembling all the accessories required for the business to run.
A lifting shackle is undeniably an essential accessory that any towing business needs to operate. Fortunately, finding a reliable lifting shackle supplier who offers durable equipment at competitive industry rates is possible.
Other common accessories for a towing business include lift gates, ramps, and wrenches, to mention but a few.
What Constitutes An Ideal Location?
Most successful towing businesses are located within the general vicinity of busy cities and for obvious reasons. So, this is the most crucial consideration when looking for an excellent location for your truck towing company.
It’s also recommended to find an expansive lot where you can park all your tow trucks (if you have a couple of them).
Accessibility, land terrain, and proximity to amenities like gas stations are other factors that determine the location of a tow truck company.
Who Are Your Prospective Customers?
You can operate your truck towing business as a jack of all trades, responding to emergency assistance. Alternatively, you can define an area of specialization.
The following are some of the unique services your towing company may offer;
- Roadside assistance for stranded motorists
- Towing impounded vehicles
- Towing vehicles for law enforcement agencies
- Towing vehicles for the local municipality
- Towing auction vehicles
- Towing vehicles to auto repair shops
- Towing vehicles to junkyards
What’s Your Company’s Legal Identity?
If everything looks good so far, proceed to give your business a legal identity.
You can start by brainstorming a decent name for the company. Next, get the company registered under the right business structure.
The most common business structures for truck towing companies include sole proprietorships, partnerships, and limited liability companies (LLCs). But you can also register the business as a corporation, depending on its size.
Do You Have A Bank Account Yet?
It’s unimaginable that you’d want to operate a truck towing business without a bank account.
A bank account helps you manage cash flow while also giving you access to credit facilities. The best part is that there are several types of accounts you can open, depending on how you wish to manage your revenue.
A current account would suit your business during its nascent years. But as the company grows, you may need to add savings and even a fixed deposit account.
What Are Your Tax Obligations?
Every responsible citizen must pay taxes. You can only evade tax long enough before the internal revenue service (IRS) comes pounding on your doors.
So, proceed to the IRS website and obtain your employer identification number (EIN). You’ll need this tax identification number when filing your income tax returns. You’ll require an EIN even before opening a bank account, which makes this process challenging to skip.
As you obtain your EIN number, also endeavor to understand your tax obligations. Ideally, the amount of tax you pay to the IRS will depend on the nature of your company. Sole proprietorships and partnerships have more lenient tax obligations than LLCs and corporations.
Final Word
Starting a truck-towing company is a rigorous process that requires adequate preparation. We hope you can use this article as a guide whenever you’re ready to venture into this lucrative industry.
