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How to Start a Tow Truck Business ($202K a Year)
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- Опубліковано 3 сер 2024
- #towing #towtruck Are you looking to start a Tow Truck business? In this video, we explored how you can start a tow truck business and then grow it to $202K a year in revenue! See the steps below:
1. Before you get into formally starting this business, you need to understand how you will bring in business. You can have best business idea, the best equipment, the best shop, but if no one knows you are in business then you can't make any money.
- Marketing Ideas:
-- Contract with Local Law Enforcement
-- Use a Tow Truck Broker
-- Network with Car Dealers
-- Facebook Page
-- Website with SEO to show up on Google
-- Local Marketing
-- Google Ads
2. Legal Up! Create an LLC, buy insurance, and make sure your Tow Truck is Compliant. Most people skip this step. Remember to protect the ship!
3. Create a budge for equipment, loan, marketing, and other expenses. Set Sales Goals and run a Proforma Cashflow analysis.
**How to make $202,000 a year in a tow truck business**
- With the average per tow revenue being between $75 - $125, we will use $100 a tow as our average.
- We will also assume that we can take 7 tows a day on average.
- To hit $202K, you will need to do 7 tows a day ($700 a day) for 24 days = 168 tows a month = $202K a year.
Now let's breakdown the profit!
Revenue: $202K
Expenses:
- 20% of revenue: $40,400
- Truck Loan ($60,000 Used Truck / 25% down payment) = $15,000
- 11 truck monthly payments of $850 a month = $9,350
Total Expenses: $64,750
PROFIT!: $137,250!!!!
As a 6 year tow truck driver looking to start his own business i found this video very helpful. I know most of this stuff already but I’m being very careful before i jump in
Glad it was helpful! Save up money and go for it!
140$ a day for diesel get about 6-9 tows for the day of local or far and insurance about $460 a month full coverage truck is a 2006 f 650 flatbed , wheel lift , I make about 2600 a week after expenses times four is about 11,000 a month free times 12 months yeah about 140k a year to 123k a year depends how slow business is
That’s awesome! There are probably several factors that I left out.
Hi I’m just curious if you write off any of your expensive smoke gas or insurance
@@xavierpatterson6164 you should write off all business expenses that are 100% for business. I would recommend you get a CPA accountant. They will save you a ton of headaches.
A shit load of work
Yeah this business would not be very passive. @@OLIVER949OC2
I think this is a great business. I’m saving up towards launching a towing company. The great thing is that it is asset based. Start with some capital and keep investing your profits. Eventually buy a yard and start doing storage fees. I’ll start with Google ads and tows for people who want it then when I can buy a yard, start doing tows for body corps which is way better I think. Never have to worry about pleasing too picky customers and it’s recession robust. People parking in the wrong place need to be towed.
Great plan!
This video is still off by alot in Fixed Income Costs. Im doing it 45 years. It all sounds easy sitting in a chair. If you cant afford a new truck, you cant afford repairs when you break down. When your trucks down, no income?. Better off with a new 100,000 small 19ft flatbed.
Truck and insurance payments est 2500 per month. Maintenance Tires,brakes, about 700 per month. Parking spot if you dont own property 200. Cell phone, ipad, website, business cards, reciepts, office supplies, etc 500. Tshirts for work and give away to customers, uniforms, safety equipment 300, thats about 4200.00 per month without other small things still needed. Now add gas or diesel per month? Thats about 50,000 gone what never comes back. Plus depreciation per month on equipment. Salary is 1000/1500 per week for 1 driver 10 hour shift.
You wont makev7 tows every day starting. This industry is rough. You need to be a hard worker. Famiky life suffers. If you cant build a customer base, youll fail. Tinys Towing on all social media pages, youll see ive paid my dues. Hopefully this will help some new guys
Thanks for sharing this, always good to have updated numbers from a real business. I really appreciate it.
Im know a guy that started 9 months ago says he's doing $7500 a week.Does that sound possible?
@@robd5326most likely NOT. Thats 30,000 a month steady with 1 truck?????? Even if he had high operating costs, with little profit, id say No.
Very informative! Thanks!
Glad it was helpful!
Better to buy a truck outright for $15K. You can get a decent truck for that and have less stress and debt. Owning the truck outright will be so relaxing as a business owner.
Yeah I would avoid loans if you can!
Very well said..lol I got lil lost at the 850 for 11 months but then I see you added the 15 is the 10
Thanks! I added the numbers in the narrative below. Should have put it on the screen.
Thanks Nate for the video very informative looking to start a tow truck business soon mainly doin Repos & service tows this video gave me light on the proper ways of budgeting plus more & I rather start with my own truck instead of buying a tow truck they have tow rigs now for a fraction of what some of there Riggs are goin for
Heck yeah! Glad to help! Hope you crush it. Definitely a need for this business.
Thank you❤
You're welcome 😊
I think I’m going to share this video on tic tok because everything he said was nothing but constructive criticism 🤷♂️
😂😂 sounds good!
Another reason towing as a new operator is good, especially without a vehicle loan, is that if you do decide it’s not for you because you’re struggling to get loads, you can sell your truck for the same price you bought it for and hardly made a loss. If you look at most businesses people will say why you shouldn’t do it. Anyone criticising towing for insurance cost is a loser. You can offset this in your towing rates.
Exactly, insurance is the cost of doing business.
Nice video
Thanks! Glad you got value!
Thanks so much for this video Nate! I looking to starting a tow company in 2024! I would love to connect and jump on call this month if you have time. I am based in Atlanta, GA!
Happy to help! Reach out on the link in my bio and we can set up a call.
@@nate_indiana_jones Will do Nate!! Thank you
Hey man loved the video, I want to start a tow truck here in Alberta, Canada. 2 big things, 1: only 1 insurance company will touch me as a first timer. A proper policy is going to be just under 15K CAD. According to the big towing companies around here and in the American facebook tow groups. Average profit margin is around 5% in the industry. Scary times for a litle guy.
I love Alberta, Banff is awesome. If I were you I would look at your individual expenses if you were to start. Maybe call another company locally, see what they are charging. If you can have a higher profit than the average then it might make sense. If I listened to what the “average” was when I started my business I would have never started. There are always 100 reasons to not start.
@@nate_indiana_jones thanks for the response, you’re right cant listen to all the reasons not to or you wont do anything!!
You can do it man! 🫡
Also if you buy and sell cars at the same time another side hustle brings extra 45k a year
You are out here playing chess! Used car dealerships are a good side hustle.
How u do that?
Just found your video. Very informative. My question which Google can’t seem to answer is: can a tow cross state lines or operate in another state or are they strictly prohibited to one states rules and laws? I’ve had a Class-A for a few years so a CDL isn’t a concern
Yea, you will just need a federal filing on your DOT#. MCS90
Towing 2 years . On with several apps and 1 well paying insurance company and google ads and Seo and I’ve seen 7 tows a day only when it hit-30 degrees this past January . 7 tows a day just starting out is NOT gonna happen.
Id say 2 tows , 3 tires , a Juno start , 1 gas/ lockout Is more likely
I think breaking it down in theory is a far different than actually having done it
Agreed, every location and area is different.
Nate, any insight on starting a tow company for just off-road recovery, pricing, will insurance companies pay for this if you agree to it? pvt pay? thanks.
Yeah I believe your per tow revenue would be higher. Insurance may be slightly higher but you would likely work less hours for more pay which sounds great!
Around here it costs Around $160 just to hook and law calls pay $254 an hour with a 1 hour minimum.
Good information though
Thanks! That is a good rate! Can make some good money in that business
Facts‼️ folks don’t understand that 160 a hook 🪝 is workable especially if you want to survive
Do I have to buy a cab and chassis or can I buy a pickup truck for towing? Also where do you get these add ons for towing?
I would search for a hood used tow truck with somewhat low miles. If you know how to fix trucks then you will do great.
Do you need any special permits to fo roadside assistance for insurance companies?
It depends on your local state but usually there are just insurance requirements
I just bought a wheel lift Towtruck it’s in pretty good condition I filled out the paperwork for Copart got some commercial insurance but Copart hasn’t approved me yet to start towing I’ve been waiting over 2 months to start working for them paying a little over$1300 a month in commercial insurance and haven’t made any money what should I do
You need to find other sources of towing jobs. Do you have a website? Do you have a Facebook page? Did you call local authorities to see if you can get wrecker jobs? Did you reach out to dispatcher? Turn over every stone possible.
Get some scanners and start chasing
What did they charge you for your insurance down payment ?
@@dj39st I can be anywhere from 10-25% depending on the insurance company
JusticeForAll#
👍🏻
Something that no one ever talks about is i assume i would need to rent a property to bring the wrecked cars back too right?
Not necessarily. You can drop them off at other lots. You could make more money if you had your own lot but that is kind of another business to manage too.
This depends on your state. Here in WA state, you can not store any police vehicles or impounds in a yard that has NOT been approved by State Patrol.
Iv towed cars in the past but never was interested in owning a truck. I’m older now and looking to buy a rollback but I’m lost when it comes to getting hooked up with IAAI. Is there any info you can give me to get in contact with the IAAI business? I want to secure some work before I buy the truck. Thanks
What state are you in?
I want to start one but just repo dedicated . Any tips ?
Do you have any connections with the police department?
@@nate_indiana_jones no connections yet with police department, I mainly want to focus on repossessions using the LPR camera systems , I’m just not sure how I can go about getting repo contracts and stuff
Got it, unfortunately I am not familiar with that. If you dig and search around you’ll find the answer.
I feel like I won’t be able to make money when there are 6+ other companies around my area. I wanna be an owner so badly but I’m scared I won’t make money. I’d be buying a 5-15k tow truck. Maybe 2. But that’s it. I have a lot in a way and I have a friend willing to invest into this with me. But how do I make money when if someone gets into an accident. They will just go and call a tow company that’s been around for a long time
I agree entrepreneurship is scary. With any business you have to find a way to get sales and beat out competition. You have to be different than the other companies. If not, you’ll be another number. Maybe your answer is not starting a towing company. There may be another business with a better opportunity
Im looking to have a conversion how much do you charge per hour?
If I were you I would back into based on the cash flow you want. Basically, you need to be profitable and you’d want to make at least 50% profit. If you’re charging $100 and hour, you’d want to pocket around $50.
Happy to hop on a call as well.
@@nate_indiana_jones I attempt to make about 80% profit when I do cash calls, due to the equipment I carry. You seem knowledgeable about this business and its hard to find people in my area who want to assist.
@@nate_indiana_jones If you have a moment that would be great I just need 30mins-1hr.What would be the best way to get in touch?
Let's create some money this year!
How much usually cost the insurance for towing truck 🛻? Thanks 🙏🏽
$6K - $15K a year a truck depending on the truck and state. NYC is over $25K.
Please how much can I buy a truck I was planing to start the business
Depends on the type of truck and how old it is. A lot of factors here.
Taking advice from someone that clearly has never been in the business is probably not a good idea. If you want to get into Towing, get a job working for a Towing company. Then you can get a feel if the job is right for you because this isn't just a job, its a lifestyle. Ask anyone that has been doing it for any amount of time.
Thanks for the input. I agree and would encourage anyone to start a business if they want to. I try to post helpful content on different industries, obviously some information might be wrong, but in the aggregate I’m sharing businesses that people can start that they may have never heard of.
Thanks for the input. I agree and would encourage anyone to start a business if they want to. I try to post helpful content on different industries, obviously some information might be wrong, but in the aggregate I’m sharing businesses that people can start that they may have never heard of.
That’s exactly what I’ve did. I’ve worked for three different ones now I’m ready.
Have you made the amount of money your claiming in this video yourself? Or are you just talking
I have not, this video depicts what is possible after thorough research in the industry. I have talked with operators and tow businesses to get my data.
You forgot about taxes and other LLC expenses and your own taxes as well. This is not easy to do. Expect major headaches and very low profits for the first 3-5 years (and this is if you can stay away from legal issues also not easy to do)
I agree, hard to include every single expense in a single video.
Lol this dude has never even probably towed a car
If you know anything about business then you know almost every business is the same. I did extensive research and most of my information is correct.
@@nate_indiana_jonesbro you at least report about businesses these guys commenting don’t realize half of what you’re saying I Come from trucking background and I approve of your knowledge to be helpful
@@a007x3 thanks I appreciate it, people are going to hate 😂
you have a fake RM on your wrist mate..
Only haters say it’s fake