The idea of opening a towing business, especially in an area that is underserved, sounds tempting. Towing operations can be very successful. It is a stable business that is always required, no matter how the economy is performing. People still need their cars to get to work. And cars need towing, whether they break down or the owner parks in the wrong spot.
But running a towing business is not easy. It is just like any other small business, where the chance of failure is very high in the first years. These tips should help entrepreneurs who may be thinking about starting a new towing business.
- Create a Financial Plan
No business can be successful without a lengthy and accurate financial plan. The plan should not just contain information about the first few months, but the first five years. Plan in detail, regarding the costs of equipment, salaries, fees, unexpected costs and other expenses.
The financial plan should also contain information about revenue. When there is a doubt regarding revenue projections, always go with the lower sum to ensure that you have enough money to survive a tough first few years. And if you end up making more money, it is a bonsu!
- Talk to Other Towing Company Owners
While you may not get great advice from a direct competitor, towing company owners in other cities will happily sit down with you. Talk to them about the biggest challenges of their business. Discuss any rough times they experienced and how they got through those moments.
- Hire Quality Workers and Pay Well
Many new towing companies make the mistake of thinking they can get away with lower salaries. The logic is that it is a new business that cannot afford to pay a higher salary. But when a company offers lower salaries, the quality of workers they attract goes down.
You are starting a new company. Your reputation is being built in these months and years. If you hire less talented workers because you are offering less pay, you will leave a bad impression with customers. It is better to pay more, higher quality workers and leave a positive impression so that you can grow your business.