Want to Start a Tow Truck Business? Watch This First
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Kenneth Orme started K.O. Towing in 2019 with a single truck. In the 3 years since, he’s grown to 4 trucks and a total monthly revenue of ,000. We’ll find out how he did it in today’s interview.
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Before starting K.O. Towing, Kenneth worked as a Journeyman Machinist and welder. When the shop he’d worked for went out of business, he took the opportunity to become his own boss and bought his first tow truck. He added the second just before the start of the pandemic, and has continued to grow over the past 2 years despite those added challenges.
Today, Kenneth shares his advice for how to start a tow truck business from the ground up. We’ll find out how much it costs to start a tow truck company and what kind of equipment you need before you start. Along with towing, his company offers roadside assistance and transportation services for customers, and Kenneth will share why it helps a tow truck business to include these options, and what systems and supplies you need to do so.
Rather than start with a business loan, Kenneth leveraged his personal credit to get started with a lease-to-own truck. We’ll hear why that was the best option for him, and other tips for starting a towing business with little to no money. He’ll also share how he connected with his first customers and established his reputation for quality service in the Tacoma area. As a 24/7 business, K.O. Towing needs reliable employees to function smoothly. We’ll find out how he hires and manages his staff to maintain consistent service quality.
Resources:
https://bit.ly/4fybQN0 – Start or Grow Your Business with UpFlip Academy
https://www.kotowoing-tacoma.com – Find Out More About Kenneth’s Business
Timestamps:
0:00 Intro
0:58 Meeting the Owner of KO Towing
2:01 Tips on Finding Your First Customer
2:58 How To Break Even in This Business
3:48 Public Clients vs Private Clients
4:52 Most Profitable Towing Services
5:54 The Must-Haves To Get Started
7:29 Scaling into the Hundred Thousands
9:21 Required Expenses To Know About
10:26 Tips on Starting a Business with No Money
11:30 Successful Advertising Strategies
13:05 System and Processes
13:44 The Tool Every Towing Company Needs
14:20 What Makes KO Towing Unique
15:18 The Trick To Avoid Failure
15:53 How To Make a Presence Online
17:16 How To Solve Common Business Problems
18:20 Blitz Time with Ken!
19:09 The Key Pieces You Need On Your Truck
20:34 The Average Work Day
21:43 Advice on Finding Perfect Employees
22:43 What Ken Earns Per Tow
23:32 What It’s Like to Operate 24/7
24:32 How To Motivate Yourself
25:12 Financial Tips for Starting a Business
26:14 How To Double Your Revenue
27:00 The Key To Keeping Customers Loyal
27:32 How Ken Got Through The Pandemic
28:38 Where Ken Got His Experience and Knowledge
29:24 The Busiest Time for Towing
30:47 Tips on Reputation
31:22 Choosing The Perfect Service Area
31:52 Ken’s Advice for Beginners
#towing #towtruck #towtruckbusiness
One of the reasons I wrote the book How to Start a Towing Company was that I made many mistakes when I first started out.
https://thetowacademy.com/towing-company-information-products/
And I wanted to help you to avoid these same mistakes. I want you to do it the right way.
Initially, I was more of a technician (like from the book The EMyth) than an entrepreneur with a business mindset.
But over time, I learned from my mistakes and made a lot of money.
Anyway, I mention my book because I get a lot of emails from people in and outside the industry who have questions, and the answers are in the book.
Here’s a question I got the other day.
“I was just on your website. What are the general requirements when starting a towing company? We want to get started right away.”
My reply:
“Depending on the type of towing business you start and the location, the requirements will vary. But what I have here for you would be a good place to start.
Licensing and Regulations:
Learn what the necessary licenses and regulations you need to comply with when starting your towing business.
These are dependent on the type of business you start and where it’s located. Consensual towing versus Non-Consensual Towing, or a combination of both.
Parking enforcement (AKA impound towing)? Working with law enforcement? Heavy-duty towing?
These are questions that must be answered before you can know what types of licenses you’ll need to acquire as well as what regulations you’ll need to abide by.
Next is…
Equipment and Investment:
Once you have the licensing and regulations determined, you can get a better understanding of what type of tow trucks and equipment you’ll need to start a towing business and what the estimated initial investment will be.
For example, if you’re running a consensual towing business out of your home, your investment may be as small as ,000 for a used flatbed tow truck.
However, if you’re operating a non-consensual towing business, you’ll need a secure lot and possibly a 24-hour facility, depending on the regulations in place.
So, you’ll need to lease or buy property and have additional staff.
And, of course, you’re going to need insurance.
Insurance Requirements:
The types of insurance you’ll need will also be dependent on the type of business you start.
While you’ll need Comprehensive Collision, Liability, On-Hook, and Cargo insurance for both consensual and non-consensual towing, you’ll also need Garage Keepers Insurance for vehicles that are kept on your property.
And you also want to get Worker’s Compensation Insurance for your employees.
Of course, other types of insurance can be helpful, such as loss of income insurance, but they are not required.
Then, you’ll want to do a comprehensive analysis of the market you’re entering.
Market Analysis:
You’ll want to ensure that the location where you start your business has sufficient demand. I always suggest that you seek out an area with at least 40,000 people within a 10-mile radius.
If you’re in a rural area, even if you’re close to an interstate, you better understand that the number of people who need towing or roadside assistance will be substantially less than if you’re in a major city.
Also, if you live in a depressed area, there may not be sufficient demand for your services. So, before you pull the trigger and start your business, ensure the folks in the area you choose have the means to afford your services.
The Last thing I’ll say on market analysis for now is don’t be discouraged if you see other towing companies operating in the area.
While you might assume that the area has too many competitors for you to start, seeing other towing companies is a good sign that there’s sufficient demand for your services.
Besides, your goal is to differentiate your business from all the others.
Once you’ve figured out where you want to set up shop, the next highly important piece of the puzzle is to determine how you’re going to get customers.
Client Acquisition and Marketing:
How will you acquire customers?
Many startups believe they can rely solely on work from motor clubs or auction houses, but they quickly learn that these companies pay much less than cash-paying customers. This is where we help our clients with online marketing, including SEO and Google Ads.
There’s much more to unpack, but I hope that helps.
Thanks”
