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8 Steps to Start a Profitable Towing Business: How to Start Your Own Company

start a Towing business

Do you wish to start your own business but don’t know where to start?

Starting any kind of business, however, takes a lot of work. The key is to obtain the right knowledge and avoid all the usual mistakes. Thankfully, you’ve come to the right place, as this step-by-step guide lays out all you need to know about how to start a towing company.

The tow truck industry is rife with opportunities. The automobile towing industry in the United States is worth $11.3 billion and is expected to grow by 2.9% by 2022. This staggering figure shows that starting a towing business is feasible and profitable. So, if you are looking for a profitable business idea and the opportunity to make some money, make your move now.

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Towing is a service that will have a consistent demand for the near future. Even though cars are becoming more and more reliable, accidents and breakdowns happen, and drivers need somebody to give them a tow. So, if you’re looking to start a business that provides a sense of consistency and very little stress or unnecessary excitement, a towing company could be the route for you. 

In this blog, we’re going to cover the eight essential steps to start a towing company. Just follow them and you are all set to join the competition and make profits


If you want to know how to start a towing business, you need to begin with developing your finances and strategies. To this end, you need a solid business plan. Every successful company begins with a good idea and a solid plan to back it up. Writing a business plan may appear daunting, but it simply entails getting your ideas out of your head and onto paper.

To start a towing business, you’ll need to decide what type of towing services your company will provide and who will receive them.  Will you do all the towing yourself, or will you have a team of tow truck drivers working for you? Making these decisions early on will assist you in determining the structure of your tow truck company.

In addition, you should figure out your budget and choice of location. You should know how much you will spend on a truck and other startup expenses for your company. At this point, consider insurance, marketing, and branding materials as well. Also determine how much you will need to charge for your business to be profitable. 

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2. Name Your Towing Business

Make your business a Brand

Before you learn how to start a towing company, you must choose a unique name for your business. Choosing the right name is important and challenging.This must be unique, memorable, yet easy to remember for your target customers. But most importantly, you need to make sure that nobody else has the name you have chosen for your business.

When registering a business name, we recommend researching your business name by checking:

  • Your state’s business records
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability

It’s very important to secure your domain name before someone else does.

3. Register Your Towing Business


You must first complete some important paperwork before you can open your doors for business. First, register your towing business to make it a legal entity. You can register your tow truck business as a limited liability company (LLC) or a corporation. An LLC should be fine to start.

Depending on your location, the licensing needs to operate a towing company may vary. Make sure to perform adequate research and reach out to a trusted professional in the towing industry for guidance. As with most specialized businesses, a business license is required. Permits for oversized vehicles may also be required if you use them. Contact your state department of transportation to see exactly what you’ll need to attain.

You will also require liability insurance and business insurance. You can consult with a lawyer to determine what type of liability insurance you need and how to structure your contracts to protect yourself if a vehicle towed by your company is damaged.

4. Open A Business Account

Open Account

Once you’ve registered your tow truck business, you can apply for an employer identification number (EIN) on the IRS website, which is essentially a tax identification number. Your EIN gives you the ability to open a bank account on behalf of your new towing business.

Open a checking account with a debit card, so that you can put all business expenses on that account. This goes for vehicles, equipment, gas, insurance, and anything else you require to do your job.

When you start a towing company, this will keep your tow truck business finances separate from your personal finances, which will help you avoid headaches at tax time.

5. Determine Your Target Market

Target Market

Tow truck businesses receive calls from multiple outlets. Police departments, other municipal departments, individuals, motor clubs, repair shops, auto auction companies and property owners may all call a tow truck to move vehicles.

It’s likely local authorities and business owners will already have towing contracts with an existing company. So, in the short term, focusing on breakdown recovery or other ad-hoc orders may be the easiest route. As you build your reputation, you can look to earn contracts doing towing for private parking spaces and the local police or offering recovery services for firms with large fleets of vehicles. 

6. Outline Your Services Offered

Towing Technology

Just like there are thousands of different types of vehicles on the road, there are many types of towing. Most of these involve transporting vehicles from the spot where they broke down to somewhere that they can be fixed, but others are a bit more unique.

Here are a few of the most popular types of towing businesses.

  • Post-accident clean up: Some towing companies are dedicated to picking up wrecked cars after a collision.
  • Contractor for roadside assistance company: AAA and other roadside assistance companies bring work to lists of preferred local towing businesses.
  • Oversized load: Have you ever seen a house (or half of a house) cruising down the highway? Oversized load-hauling is a kind of towing.
  • Vehicle transport: Some tow truck drivers specialize in transporting vehicles long distances.
  • Other: Some towing companies transport other things like boats.

Certain services may require the use of extra equipment. If your company is equipped/qualified to offer those services, this could be a good way to stand out from the crowd. 

7. Arrange Your Equipment

Towing Technology

To start a towing business, purchasing the right equipment is the most crucial task. It is advisable to start this business with one or two vehicles. As your business grows, you can go with multiple options. Initially, this business can be operated from home. If you have a spare room, you can set up a home office there to maintain your daily activities. But you will need to arrange safe parking for the towing vehicles. 

A new tow truck can cost $100,000 or more. However, you can save money by purchasing a used tow truck without sacrificing performance. Here are the various types of tow trucks you can expect to use for your business:

8. Invest in Technology

Towing Technology

If you want your towing company to make the maximum profit and successfully build a brand for your business, you must leverage modern tools and technology. In this age of digital transformation, tools like towing business software could be your biggest advantage in this fierce market competition. 

In this smart field service management software, you can easily standardize and streamline your business processes to optimize your resources and increase efficiency. For example, towing management software solutions help you to automate scheduling and dispatching, optimize routing, track and monitor your field technicians in real-time, create and send invoices directly to to the customers, organize customer databases, and so on. 

Additional Requirements for Starting A Towing Business

The exact rules and regulations vary from state to state, and sometimes even county to county, but in general, you’ll require the following qualifications to apply for a Tow Driver ID in the United States:

  • 18 years or older
  • Valid driver’s license
  • Clean driving record
  • No more than three accidents within a year in the past three years
  • No DUIs in the past five years
  • No more than one DUI in the past 10 years
  • Speak English at a conversational level

More specific criteria may apply based on your location. Some jurisdictions may even have exceptions to these rules. The main goal of these stringent guidelines is to ensure that only trustworthy individuals operate tow trucks and handle people’s cars. 

Wrapping Up


Every tow truck business should have an online presence so that individuals who need a tow can find the business. Tow truck companies shouldn’t completely ignore marketing channels like social media, but they’re usually wiser to direct most resources towards local search engine optimization (SEO). Individuals are more likely to use a search engine to find a nearby towing service when they need one than they are to engage with one on Facebook or Twitter. 

A well-built website can also help customers find and book services, potentially increasing your towing leads. These clients can share your services online with their friends, giving you the opportunity to ask for referral leads.

So, if you want to start a towing business, you need to use the digital platform efficiently. Besides, digital tools like towing business software can also help boost your business to the next level.

To sum up, learning how to start a towing company in this age of technology involves having essential knowledge of digital tools. If you can achieve that goal successfully, nothing can stop you from launching your own business and making profits.

For more information, contact Field Promax.


A towing business is a terrific but profitable business venture, and it is better to be well informed, so you will not be caught off-guard. Typically, it requires some specialized knowledge and skill. Also, having experience in the transportation industry will help you in this industry.

Most tow truck companies charge by the mile with a base hookup fee. The average cost for towing services can vary by company and region. Many towing companies charge a base rate for the first few miles, then charge an additional cost per mile after that. Besides, tow truck drivers have all kinds of ways to make money besides just towing cars. They can offer roadside assistance to people whose batteries have died, who have a flat tire, or even combine it with mobile mechanic services.

  • Create a Business Plan. Every great business starts with a good idea and a solid plan to back it
  • Open a Bank Account
  • Buy a Tow Truck
  • Determine Your Target Market
  • Build Your Brand
  • Market Your Services
  • Prove Your Reliability
Joy Gomez

My world is made up of codes. It is the central element that drives my universe. I am a self-taught, process-driven programmer with a creative bent of mind. Since I was an engineering student, I dreamt of creating something unique. To satiate my creative appetite, I took to coding. Blessed with abundant support and generous scholarships from my employers, I simultaneously worked full-time and pursued my dream. My passion and high productivity helped me in my journey as well. Finally, I created Field Promax to follow my drive of coding and streamlining processes; and do more of what I know best—coding.