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Although we enjoy being on the go and rushing from one to place, the sad fact is that cars do occasionally break down. Vehicle towing is a $11 billion industry in the US because of this. It’s a growing industry, so if you want to drive and rescue people from difficult situations, you may launch a towing company, work for yourself, and take a piece of this enormous market. 

However, it takes a lot of labor to launch any kind of business. The secret is to learn the proper information and stay away from any common blunders. Fortunately, you’ve found the correct spot, since this step-by-step manual lays out all you need to know to start a profitable towing business.

Step 1: Find Out if this is the Right Business for You?

Positives Vs Negatives

No experience necessary; quick and simple to get started
Ability to start from home and flexibility
There is ongoing demand since cars break down.
Trucks are expensive, which could impede growth.
Need to be available always
  • market size and historical growth — The US automotive towing market will be worth $11 billion in 2022, having increased by more than 5% each year over the previous five years[1].  
  • A 4% annual growth rate is predicted for the worldwide towing market through 2024[2]. 
  • 47,000 towing companies operate in the US, according to statistics.[3] 
  • A little under 114,000 individuals are employed in the sector.

Cost of Starting Towing Business

With an average cost of $42,000, the cost to start a towing business ranges from $18,000 to $66,000.

Naturally, the tow truck itself is the largest. You’ll spend around $100,000 on a brand-new tow truck, thus the deposit might be $20,000 in total. However, you might be able to purchase a pre-owned truck for $25,000 if you pay half of that sum up front to get the keys. Visit the Truck Paper, you might think.

Starting a towing business is a fantastic time to earn your commercial driver’s license (CDL), even though it may not be absolutely necessary since you may eventually exceed the weight limit (26,000 pounds). For further information, contact your state. Additionally, the Towing and Recovery Association of America will demand at least 90 days of tow truck experience for you to receive their Light Duty certification. 

Is Towing Business Profitable?

After deducting your costs for petrol, insurance, and marketing, which amount to roughly $95, you should have a profit margin of about 70%. 

You might react to two service calls every day, six days a week, in your first year or two of being a solopreneur. This would generate approximately $60,000 in yearly income for you and more than $40,000 in profit. 

You can anticipate three service calls each day as your company becomes more well-known, which would result in an annual revenue of $89,000 and a profit of over $62,000. Then, you may start saving money, increase your fleet by one or two trucks, and start generating significant revenue.

Entry Barriers

The biggest obstacle to entrance is financing, particularly the cost of purchasing a truck and maintaining it. In order to safeguard your possessions against theft and unintentional damage, you will also need to pay a significant insurance cost each year. 

The strict requirements, which may require a state permission in addition to your CDL and towing certification, are another obstacle to entry. Significant education and experience are required for this. 

Because all companies in the towing industry provide the same services and because the majority have more expertise than your startup, the competition is extremely severe in this sector.

Step 2: Create a Strategy

Identify a Gap

Examine the services, costs, and client feedback of the local towing companies by conducting a little research. Finding a market gap to fill is what you’re after. A towing company with a mobile app, for instance, might be lacking in the neighborhood market. Your word-of-mouth advertising may gain momentum as a result, drawing customers in right immediately.


It’s not uncommon for cars to break down. You could experience it while driving or commuting to work, as well as in the garage or in the parking lot. Additionally, a car accident can happen to you. Nothing else is an option but to get assistance from a towing business.

Depending on what and how they need to tow, towing businesses utilize a variety of trucks. Four typical truck types are listed below along with some of their frequent applications:

  • Flatbed tow vehicles are widely used in the towing industry. On their backs, they lug a long, flat, empty, hydraulic bed. The car is raised on the bed using a ramp.
  • Boom Trucks – Boom trucks tow an automobile using belt lifts or slings, which is far safer than the more common but risky hook and chain tows. They have a “boom”—a telescoping crane connected to the chassis of a commercial truck. Outriggers are used by boom trucks to stabilize the body when the crane raises the truck.
  • Integrated Tow Truck – As capable and sturdy self-loaders, these trucks are made for heavy-duty towing. Frequently, these are used to haul buses. Repossessions also make use of them.
  • Wheel-Lift Tow Trucks: These vehicles have a metal yoke attached that may be used to lift either the front or back wheels of the vehicle being towed. In order to safely transport towed vehicles over uneven terrain, they also use a hydraulic system.


Depending on your location, tow truck service fees might range from $2 to $4 per mile. The average price each tow is roughly $100, however there are big variations. 

To calculate your markup and final price points after knowing your costs, utilize this Step By Step Profit Margin Calculator. Keep in mind that the prices you use at launch should be flexible and subject to adjustment as the market demands.

Target Market

The majority of the calls you receive will be from motorists who are in roadside crises and require a tow to the closest car repair facility. Along with calls from local police, car clubs, gas stations, auto auctions, and property owners asking you to tow and move a vehicle, you should also anticipate calls from these sources. All of these groups might be contacted to inform them of your services. You could also get in touch with hotels and other lodging options for travelers, as well as hunt for relevant companies on Google Maps and LinkedIn. 


To keep costs down in the beginning, you might wish to operate your business from home. But as your company expands, you’ll probably need to hire personnel for a variety of positions, and you could need to rent space for your equipment. On websites like Craigslist, Crexi, and Instant Offices, you can uncover rental options for commercial space in your neighborhood.

You may want to adhere to the following guidelines while selecting a business space:

  • accessible by public transportation in a central location
  • With plenty of natural light and ventilation
  • As your firm expands, your lease might be made more accommodating
  • a space that is ready to use and doesn’t require any substantial upgrades or repairs

Step 3: Write a Business Plan

A plan is necessary for every firm. This will serve as a manual to help your startup go through the launch process while staying focused on your primary objectives. A business plan also helps potential investors and partners comprehend your company and its mission:

  • Brief overview of the entire business plan; should be written when the plan is finished.
  • Business overview: A description of the company’s vision, mission, ownership, and goals.
  • Product and Services: Clearly describe what you have to offer.
  • Market Analysis: Conduct a SWOT analysis and evaluate market trends such variances in demand and development prospects.
  • Create a list of the benefits of your services after analyzing your top competitors’ strengths and flaws.
  • Sales and marketing: Consider your companies’ USPs while developing sales, marketing, and promotional initiatives.
  • Overview of the management team, including a corporate structure, information on each member’s responsibilities and educational background.
  • Operational Plan: The operational plan for your company outlines logistics, office location, essential assets, and other purchasing decisions.
  • Financial Plan: Three years of financial planning, which includes startup expenses, break-even analyses, profit and loss projections, cash flow, and a balance sheet.
  • Added financial or commercial documentation should be included in the appendix.

Step 4: Create a Marketing Plan

Even while online visitors and casual onlookers may contribute to a portion of your revenue, you should nonetheless spend money on digital marketing! Spreading the word is crucial for new businesses as it will increase customer and brand awareness. 

Connect your social media accounts to your website once it is live. Because you can make interesting postings that promote your items on social media, it’s a terrific tool for business promotion:

  • Facebook is a great tool for paid advertising since it lets you target particular demographics, such men under 50 in the Cleveland area. 
  • Instagram offers the same advantages as Facebook, but with distinct target markets.
  • Website: SEO will help your website rank higher in relevant search results, which is essential for boosting sales. On your website, be sure to maximize the calls to action. Play around with the text, color, size, and placement of calls to action like “Call Now.” The amount of clients may rise significantly as a result.
  • Google and Yelp: Listing on Google My Business and Yelp might be essential for businesses that depend on local clients to increase visibility and attract new clients.

Kickstart Marketing

Utilize your online presence on social media, your website, and your in-person interactions to spread the word about your products and develop your brand. Here are a few ideas: 

  • Use eye-catching signage on your website and in-store locations. 
  • By handing out flyers in your community and at professional gatherings. 
  • A video about your towing service should be posted. If you use comedy, it might become famous.
  • To encourage consumer referrals of new clients, consider offering incentives. 
  • Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
  • Describe the benefits of your towing service in the form of testimonials from satisfied clients.
  • Publish infographics and include them into your material after creating them.