How to open a towing company

Opening a towing company can be rewarding and profitable. More than 10.6 million accidents occurred in the United States in 2007, according to data accumulated by the National Security Council and published by the US Census Bureau. Many of these accidents require the services of a towing company to remove vehicles from the scene. Anyone has the opportunity to start their own business in this niche if they first learn what it takes to start a tow truck business.

Company Registration

Obtain a local business license from your city or municipality government, completing an application and paying a license fee. Obtain a federal tax identification number from the Internal Revenue Service, by completing the registration form via telephone, fax, Internet or mail. Learn what are the sales tax laws that are applicable in your state for towing truck companies, and apply for a sales tax permit if it is necessary to collect and pay the sales tax. You may need a state license to operate a tow truck company. For example, Texas has a
licensing requirement for crane companies and operators. Once you have purchased tow trucks for your business, register them in the department of motor vehicles.


Determine the initial amount of money needed to start a tow truck business based on your plans and location. The purchase of tow trucks can be several thousand dollars, depending on the brand, model and number of vehicles you buy. The registration of your business and vehicles can vary from several hundred dollars to more than US $ 1,000, depending on property taxes and license fees at your state and local level. Find financing to cover the start-up costs of your towing company by applying for a commercial loan from a bank or credit union. Fill out a loan application, and get ready for the bank to analyze your current financial situation, credit and possibly of the business plan, before approving the financing you need.

Equipment and insurance

First, it is necessary to obtain tow vehicles. Determine the number of tow vehicles you need for your business based on funding, staffing and other factors. Consider what type of crane best serves the needs of your business, such as a hook and chain, lift or platform. Insurance is also a priority. Obtain insurance to cover the physical property of your business, as well as civil liability insurance to protect your business in the event that your tow trucks cause property damage, injury or death. Rent or buy a commercial space to house your facilities and make sure you have a safe place to store your tow trucks when they are not in use.

Hire other tow truck operators if the demand justifies it and you have additional vehicles to operate. Make sure operators are authorized if this is a requirement of your state. Consider hiring an office assistant or shipper who can handle incoming requests for trailers while sending crane operators to handle each request.

Marketing and publicity

Promote your tow truck services. Use free services over the Internet, such as Facebook, Twitter. Create a catchy jingle that helps people remember your business and your phone number, and use it on radio and television ads. This will allow them to call you when they don't have a phone book or computer on hand to find a towing company. Partner with police officers and emergency personnel, as they can recommend your company to accident victims who need to tow their vehicles, and also try to obtain AAA certification.