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How to start a tow truck business

Are you thinking of starting a Tow Truck Business and wondering how to start a tow truck business and how much money can you make towing cars? You are in luck! Follow the ultimate guide to starting a tow truck business. 

Know your how it costs to start a tow truck business. The good used tow truck will cost you around $60,000. To get a loan, you will need to pay at least 25% as a downpayment which is $15,000.​​ This would put your monthly payments at $850 a month which is $9,350 the first year in payments (11 payments). For your truck, your total expenses would be around $24,350 for the year. As far as all other expenses, you will have insurance expense, gasoline expense, taxes, mechanical expense, etc.

  • Once you can ballpark your costs, you will want to look at your personal finances and make sure you are at a good spot to take the risk to start a tow truck business. ​​


Think of all the ways a Tow Truck Business could fail: The best way to create a tow truck business plan is to define the areas where the towing business can fail. Be your businesses biggest critic. This will allow you to identify areas in which you should focus on. 

  • You don't get any calls for tows: You failed to create a sales and marketing strategy so people knew about your business.

    • Create a website with SEO.

    • Create a Facebook Page

    • Contact Local Authorities for Referrals

    • Work with a Towing Load Broker. These companies will broker loads to your company.

    • Local Print and Outside Marketing (Buy yard signs, sponsor a baseball team). 

  • Your tow truck is always broken down: You failed to know which truck to buy or you don't know how to fix small stuff yourself. 

    • Learn about your truck. You don't need to be a mechanic but you need to know how to fix minor things. ​

  • Essentially you are going to want to continue to go through situations and issues that could arise and create strategies around minimizing those things from occurring. 

Legal Up!  

  • Create a Tow Truck Business LLC or Corporation. The reason you want to create a company legal structure is to protect your personal assets from potential lawsuits your company could cause. Also, creating a separate legal structure allows you to easily sell your business down the road. 

  • Buy Tow Truck Insurance - You will be legally required to have insurance depending on your specific state law. Transparently, I personally own an insurance agency (Wexford Insurance), we work with Tow Truck Companies and would be happy to provide multiple quotes

  • Create a customer contract and invoices. Businesses either live or die by processes Before you start your business you need to know what documents you are going to use when you tow a car for someone. Walk through the process from the initial call to the end of the tow. Make sure it is seamless. 

Create a 12 month budget and proforma

  • Numbers are everything in business. By knowing your numbers you can know if you are doing well or if things aren't going well. By creating a conservative budget of your projected expenses and income, this will allow you to not get distracted when money starts coming in. When we don't have a plan with our money, it goes away. 

Find Your Tow Truck and Commit to Starting!

  • There will always be a million excuses to not start a business. At some point you have to take action and start. Having the freedom of being a business owner is the best thing ever. However, the freedom is earned. Nothing in business is ever given. If you are willing to work hard, you will be successful. 

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