Did you know that about 1.3 million people die in car accidents globally every year? Driving is a perilous undertaking and breakdowns happen – they happen all the time. It is the tow truck business that provides the much-needed service of moving vehicles that no longer can move on their own.
We may live in a world where we can’t imagine life without our cars but that doesn’t mean cars are without their troubles. Coming to the rescue of a stranded motorist is a good way to provide a valuable service.
Are you thinking about starting a semi-truck towing business? First, read these simple tips that could save you a lot of time and money.
- Know You Could Fail
The towing business has its ups and downs like any other business. There aren’t any guarantees when you are running a tow truck company that it is going to be profitable. It helps to know the common reasons a tow truck company fails.
Oftentimes, new tow trucking companies fail to properly market themselves and miss out on new contracts to other established companies. To be successful, your tow truck needs to be on the road towing more often than not. Go after contracts like your life depends on it – your business life does.
- Get Good Insurance
This may seem like a no-brainer, but you might be surprised as to how many a tow truck business has got caught without enough insurance to protect themselves when things go terribly wrong. Before you take your first job you are going to want to have at least the following coverage:
- Cargo insurance
- On-Hook Insurance
- General Commercial Liability Insurance
You may want to consider purchasing an “umbrella” insurance option to be sure an accident won’t break your company before it even gets started. The type of insurance you should get also depends a lot on what you are towing. For example, a log truck driver policy is often very different in its scope than a repossession towing service.
- Have Enough Seed Money
A tow trucking business isn’t a get-rich-quick type of business plan. At the very least, you are going to need a few hundred thousand dollars to open for business, even if you only purchase one tow truck.
Remember to properly plan for slow times when your operating cost could be much higher than your cash flow. Most businesses fail within their first few years simply because they don’t have the money to keep the doors open long enough to establish a strong customer base.
Start a Tow Truck Business
If you have a head for business and play your cards right, a tow truck business could be your dream come true. Understand the risks, get enough insurance, and make sure you have the cash reserves to make through the first few years. For more helpful business articles, keep reading our blog.