1. What Type Of Company Would You Like To Establish?
When running a towing company, diversity is sources of business is critical. According to http://besttowtrucknearme.com/ Understanding potential sources of business as well as how profitable they are is important for determining the level of success you will enjoy from the start. Having a good mix of sources will help to protect you from being too vulnerable to the ebb and flow of the demand of any particular source. The most common sources of work for a towing company are:
Police/Municipal calls. These calls will usually come direct from police dispatch at the request of officers at the scene. Towers establish both informal and formal relationships with police departments to provide towing services. This source brings in the highest fees but also requires faster response times and higher insurance coverage.
Cash calls. This is yet another profitable source of calls. The calls here come directly from clients that contact you and pay you directly for the services you provide. Advertisements and other promotional methods are usually the ones responsible for generating these calls. If you can master how to build a successful brand for your business and drive calls cost-effectively from cash customers, you can enjoy profits for a long time to come.
Motor Club Calls. These calls are usually little profit and little expense. They are the best way for a new towing business to get a footing in the industry. The advantage with these is that it is hard to lack work meaning that you get to learn how to run your business effectively. With these calls, you have no advertisement costs and the phone just keeps ringing and ringing. However, with often less than $5 profit per call, they are simply not enough to sustain a business.
Account Calls. All body and auto repair shops require a tow partner. Even though discounts are issued to these shops for their calls, the profit can be over ten times that of a motor club call. However, you need to be ready to establish and nurture these relationships.
Auction Calls. Providing towing services to auction houses can be another great way of providing stability to your business. These calls usually offer slim profit margins as motor club calls but have the additional benefit of flexible response times. This means that you enjoy the flexibility to respond to other potentially lucrative calls and handle the auction call later in the day.
Private Property Calls. These are the calls to remove a vehicle from a private property without the consent of the owner. This kind of towing requires additional reporting and licensing. In addition, since you will be towing vehicles without keys, you might require extra operations training to reduce damage claims. Private property towing can be high risk as well as highly rewarding.
2. How Much Do You Plan To Charge Per Call?
This is perhaps the hardest question to answer when you start your tow truck business. The answer is simply the amount of money that you would like to make. Working backwards from your desired income, then adding projected expenses and finally dividing by the number of calls you are anticipating can give you an idea. However, this is putting yourself under too much pressure on your ability to guess correctly at some very important figures.
A better alternative is calling other tow companies covertly and take an informal poll of the average rates your competition is charging. Then make estimates based on what you believe your volume will be across all sources of work. However, ensure that you track these numbers carefully. If you find your actual calls under performing the projections, adjust sooner rather than later. Never let expenses to outpace revenue and plan on surviving on a small salary for the first six months to one year.
3. What Assets Will You Have The Day You Start?
Before you start your tow truck business, this is something you should think about. A major mistake that new towing business owners make is to buy a fleet of trucks or an expensive truck in their first month of business. It is important to keep truck payments and other big expenses to a minimum in your first year of business. Employee expenses, fluctuations in fuel prices, and supplies can sneak up on a new business owner. Therefore, always prepare for the unexpected.
4. How Would You Like Your Current And Future Clients To Describe Your Business?
It is important to build a brand and not just a company. With an overabundance of towing companies from which to make their selection, customers will often call towing companies at random for a quote. Ensure that your business stands out by having a strong marketing plan and a good name. Having these two in place before you even advertise will make that money work better for you.
5. Who Will Be Your First Customer
Start building your contact list right now. Your business does not have to be up and running for you to print business cards and start introducing yourself to potential clients. Tell them that you are launching the business in months but wanted to know what it is that they look for in a good company. This will show that you are dedicated to the provision of a good product and will provide you with the insight on how to compete better with your fellow industry professionals.
In conclusion, above are five important things you should know before you start your tow truck business. Having your own business can be an amazing experience but it does require hard work. Preparing for some of the potential pitfalls will help ease the stress and will have you better prepared to tackle the challenges the tow business will face. Committing your business to be the best when handling customers problems by getting the job done right will ensure that you enjoy success and will give you a major boost ahead of your competitors.