A well-written business plan for a towing company doesn’t just help you get all your ducks in a row. It helps potential investors and lenders to see if your business is well thought out and sustainable. It can reassure them that their money will be put to good use. A poorly written business plan does exactly the opposite.
Business Plan for a Towing Company
If you’re not confident in your writing skills, enlist someone who has excellent writing skills and better yet — someone who has experience writing business plans. Online templates will help you organize your thoughts, but if the end result is disorganized or contains misspelled words and grammatical errors, it’s not going to impress anyone.
Use an online template or download a tow truck business plan sample PDF and write down everything that you want to say about your business. Then, hand it over to someone who can write a final draft for you and package it professionally. In addition to impressing potential investors, the business plan will be your guide for getting your business off the ground, growing it and dealing with inevitable obstacles.
Business Plan Structure
While each business plan is as individual as the business and its owner, the form and content should follow some basic guidelines. Include these in the business plan for your towing company:
- New, professional-looking binder and title page
- An executive summary
- A table of contents
- A. description of your business
- A market analysis
- A description of your business’s operations and management
- Legal, liability and insurance issues and coverage
- Your financial statements
- Applicable supporting documents
Binder and Title Page
To package your business plan professionally, use a plain, black binder with a cover that says the name of your business. You can purchase a binder that has a see-through vinyl cover on the front into which you can slip a 8.5” x 11” piece of paper on which your business name is printed.
As you open the binder, the first page should contain the title of your business. It should also list yourself and any other principals along with your physical and website addresses, phone numbers and email addresses. It should also show the date your business plan was completed.
The Executive Summary
The executive summary states your specific purpose for writing the business plan for your towing company. For example, if you’re looking for a partner, it should state what percentage of the business you’re offering and for how much of an investment. Similarly, if you’re looking for a small business loan, the executive summary should state, “The purpose of this business plan is to obtain a loan in the amount of $750,000 for the purchase of a heavy-duty tow truck that will allow us to expand our business to towing RVs.”
Keep the executive summary to a half page, broken into no more than three paragraphs. Tell the reader in as few words as possible what the business is, the services it provides and what competitive advantages it has over other towing businesses in the area.
Include summarized information about income, profits and collateral. State how your business is legally formed – is it an LLC, a sole proprietorship, a partnership or a corporation? List principal owners, managers and key employees. Finally, describe any developments that could have a major impact on your business, like a newly acquired contract with AAA, OnStar, local law enforcement or first responders.
Table of Contents
The table of contents goes right after the executive summary. Don’t omit it. It allows readers to find information they want quickly, and it makes the entire presentation more organized and professional.
Description of Your Towing Business
Start with a short description of the towing industry. Include how things are going overall and say what you think the future holds. Don’t wing it. Do some research on this before you write it.
Discuss the specifics of your business, such as what services you provide, your customers and how big the market is for towing services in your area. Be sure to explain why your business is better than the competition.
If you’re looking to borrow money for expansion, show how the expansion will bring in more revenue and quantify it. It is important that everything in the descriptive section be backed by reliable data. To that end, you’ll want to add footnotes with your sources.
The Market Analysis
A market analysis should be done before you write the business plan for your towing company. You can do this yourself, but the results will be far more credible if you enlist a market analysis firm or freelancer with excellent credentials to do it. Summarize the results in a few paragraphs for this section and refer the reader to the detailed data in your supporting documents section.
The market analysis will support how you’re identifying prospective customers and how you’ve established prices for each service you provide within each mileage radius. You’ll also want to include descriptions of promotions or special pricing you offer for volume work for regular customers, like police and fire departments.
Be sure to show how you’re positioning your business to increase its market share. Define your target market and state how you’re differentiating yourself from the competition. What kind of advertising, public relations and networking do you do? Include information about your competitors’ strengths and weaknesses and how you will deal with them.
Operations and Management Section
This section of your business plan should describe how it operates on a daily and ongoing basis. Describe your businesses logistics on how incoming calls are turned in to dispatching drivers and trucks. Discuss how vehicles that are towed to your facility are handled and secured. Describe procedures for dealing with contracted work, like calls from AAA or OnStar.
Legal Issues, Liability and Insurance
Towing businesses are exposed to some risks that other types of businesses are not, and they’re more vulnerable to some risks that all businesses face, like employee theft. Include a section that explains the security and safety measures you take to protect your business against losses, lawsuits and employee injuries.
Provide an outline of your employee safety training program. Describe your policies and procedures for dealing with safety violations as well as your security measures for protecting any vehicles you store.
Explain how you verify that your drivers have the right credentials, such as commercial drivers’ licenses. If your state requires it, you should also include information on how your employees are bonded. You’ll also want to show proof of a good inland marine insurance policy with higher-than-average liability limits.
Your Financial Statements
You must include an income statement, a cash flow statement and a balance sheet. Here’s where your accountant can help. The statements should support any cash-generating claims you make in earlier sections of the business statement as well as expenses, costs and capital. Documentation like bank statements or tax returns can go in the supporting documents section.
Supporting Documents and a Reminder
Typically, you’ll include backup documentation for the financial statements, risk management and the market analysis that was done. However, you should also include your resume and those of any other principals or key employees.
Business plans should evolve to reflect changes in your business, its direction and so forth. Don’t forget to change the date on the title page whenever you update it.
LeDona Withaar has over 20 years’ experience as a securities industry professional and finance manager. She was an auditor for the National Association of Securities Dealers, a compliance manager for UNX, Inc. and a securities compliance specialist at Capital Group. She has an MBA from Simmons College in Boston, Massachusetts and a BA from Mills College in Oakland, California. She has done volunteer work in corporate development for nonprofit organizations such as the Boston Symphony Orchestra. She currently owns and operates her own small business. In addition to writing for PocketSense, she writes for Bizfluent, Budgeting the Nest, Legal Beagle, PocketSense and Zacks.