Make sure to purchase liability insurance to protect your company against liabilities.
Starting a towing service is a very challenging yet rewarding venture. There are several licenses and requirements involved in starting a towing service. Towing services normally work with property managers and subcontract their services to companies. Towing services typically are not offered to the general public. Inspection of your towing service facility may be required prior to opening as well as inspection of the equipment in the facility. Other equipment needed besides a tow truck include traffic cones, floodlights, strobe lights and an assortment of other equipment.
Instructions
1. Research and plan your business. Develop an extensive business plan complete with start-up summary, marketing strategies and financial plans. Determine who your competition is. Search your state's official website for information and resources for starting your towing company. The Small Business Administration (SBA) can also assist with resources to start your towing service.
2. Apply for a business license. A business license is required for any person wishing to do business in any state. Contact your states' Department of Licensing and apply for a business license. An additional license to operate a tow truck is required as well.
3. Select a legal structure for your business. Decide whether you'd like to be a corporation, limited liability, sole proprietorship, nonprofit or partnership.
4. Select a name and location for your business. The location should be an area that has a lot of space to store towed cars. Register your business name with your state's Secretary of State. The name of your towing company should stand out and be something catchy and memorable.
5. Purchase a tow truck. Start out with just one and then gradually get more. A tow truck normally costs about $200,000.
6. Get liability insurance. Insurance must be taken out in case of injury to the person operating the tow truck, vehicle damage or property damage such as burglary.
7. Find funding to start your towing service. The Small Business Association (SBA) can assist with start-up funding for your towing service.
8. Hire your tow truck drivers. Make sure to perform background checks on all potential employees. All employees should have a clean driving record and drug tests should be administered prior to opening your towing service.
9. Call the IRS at 800-829-4933, and apply for an Employer Identification Number (EIN). The IRS will ask for specific business and personal information; have all relevant information handy. Every business must have an employer identification number. This is how the government identifies businesses. In order to file taxes, all businesses must have an employer identification number.
10. Advertise your business everywhere including newspapers, magazines and local radio stations using flyers, business cards and banners. Advertising is another key factor in the success of your business; so making sure the right people see your advertisements is crucial.
