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How To Start a Tow Truck Business


Starting your own tow truck business can be a very lucrative endeavor. Not only is the demand for tow truck services high, but the start-up costs are relatively low when compared to other businesses. However, there are a few things you need to know before you get started.

Here are the 10 steps you can take to get started on building your very own tow truck business.


10 Steps to Launching a New Tow Truck Business

1. Choose Your Type of Tow Truck Business

The first step in launching a tow truck business is to identify the type of tow truck business you want to launch. You might choose from the following types among others: 

Light-duty tow truck business: These tow trucks are used to transport vehicles that are not too big or heavy.

Medium-duty tow truck business: These tow trucks can handle heavier vehicles than light-duty tow trucks.

Heavy-duty tow truck business: As the name suggests, these tow trucks are used to transport very heavy commercial vehicles.

Learn more about the types of tow truck businesses.


2. Name Your Tow Truck Business

Give your tow truck business an identity so people will think of it as a well-known and respected brand. You can take the name of your tow truck business from your industry, focus on a geographical location, or use your own name among other options.

The main goal for naming your tow truck business is to make it sound appealing and trustworthy so that customers will want to use your services.


3. Determine Your Tow Truck Business Model

There are several possible types of business models for a tow truck business including:

  1. Owner-operator: You will be the sole employee of your tow truck business and will handle all aspects of the business including towing, repairs, and maintenance.
  2. Partnership: You can team up with another individual or company to start your tow truck business. This could be a great option if you don’t have the funds to start the business on your own.
  3. Franchise: You can purchase a tow truck business franchise from an established company. This option might be more expensive but it comes with the benefit of an already-successful business model.

No matter which model you choose, make sure that it aligns with your business goals and the services you offer.


4. Choose a Legal Form for Your Business

By incorporating your tow truck business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.

The business structure you choose for your tow truck business will determine the amount of taxes you pay and which state or federal tax forms you need to file.

Read our article comparing the most common tow truck business structures.


5. Write a Tow Truck Business Plan

All tow truck business owners should develop a business plan. 

A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.

Read our article about how to write a tow truck business plan.


6. Apply for the Necessary Permits and Licenses

There may be required licenses and permits you need to obtain before launching your tow truck business.

For example, some states require association certificates that require passing a written examination. In other states, you must apply for a business certificate and license. 

You must also register your tow truck business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.

Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.

Read our article about obtaining the proper tow truck business licenses.


7. Determine Your Budget & Apply for Funding as Needed

In developing your tow truck business plan, you will figure out how much funding you need to start and grow your business.

If you have your own funds to invest in your tow truck business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your tow truck business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.

Read our article about the costs associated with starting a tow truck business to help you determine if funding is needed. 

Read our article about how to fund your tow truck business


8. Get the Technology & Software Needed to Run Your Business Efficiently

When you start your tow truck business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues. 

You may also want to invest in fleet management software, which can help you track and manage your tow truck fleet. This type of software often includes features like GPS tracking, dispatch management, and vehicle maintenance scheduling.

Read our article about the technology and software you need to run a tow truck business.


9. Market Your Tow Truck Business to Potential Customers

Before you start selling your services, you have to let the world know you exist. The first step is to create a website so people can learn more about your services and how they benefit them.

After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the tow truck industry through social media and blogs so they can help share your business. 

You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Tow truck businesses should consider the following promotional strategies for which you should start getting prepared: 

  • Develop a branding strategy
  • Develop marketing collateral like business cards, flyers and brochures
  • Buy a list of potential customers from a lead generation company
  • Start a blog and write articles about topics related to your tow truck business
  • Submit articles to online directories
  • Participate in trade shows and other events related to your industry
  • Advertise in local publications

Read our article about how to market your tow truck business for more tips.


10. Get New Customers and Grow Your Business

When you promote your services, you’ll start to get interest from potential customers

Make sure you’re ready to serve these customers. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your tow truck business.

Read our article about how to effectively grow your tow truck business to learn more.


Starting a Tow Truck Business FAQs

There are many reasons to start a tow truck business. First, it’s a great way to be your own boss and have control over your career. Second, it can be a very profitable business. And third, it’s a service that is always in demand so you will never run out of customers.

To start a successful tow truck business, you will need a tow truck, a storage facility, insurance, a business license and permits, and the right technology. You will also need to market your business to potential customers.

It is possible to start a tow truck business from home, but it’s not recommended. To be successful, you need to have a physical location where customers can come to get their vehicles towed. You also need to have a storage facility for your trucks and equipment and  for the vehicles you tow. And finally, you need the right technology and software to run your business effectively.

You can manage aspects of the business from home but you will still need a physical location.

Here are some tips for starting a tow truck business:

  1. Make sure you have the right tow truck.
  2. Get a storage facility.
  3. Get insurance.
  4. Get a business license and permits.
  5. Use the right technology to run your business effectively.
  6. Promote your business to potential customers.
  7. Train the right people to help you grow your business.
  8. Focus on customer service.
  9. Get new customers and grow your business.

A simple checklist to use when starting a tow truck business is as follows:

  1. Choose Your Type of Tow Truck Company: This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
  2. Name Your Tow Truck Business: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
  3. Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
  4. Determine Your Tow Truck Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
  5. Write a Tow Truck Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
  6. Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and/or permits before you can begin operations.
  7. Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
  8. Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
  9. Market Your Tow Truck Business to Potential Customers: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the services they truly need. 
  10. Get Customers & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your services



Starting a tow truck business can be a great way to make money while helping people in their time of need. There are several things you will need to do before you can open your doors for business. Make sure you have the right tow truck, get insurance and permits, use the right technology, and market your business effectively. With the proper planning and execution, you can be on your way to a successful tow truck business.