Towing companies in most areas of the United States often have difficulty obtaining towing licenses, according to entrepreneur.com, because the industry is so heavily regulated. However, businesses can bypass the licensing process if they skip the general public and offer their services exclusively to a property management company or car dealer. The Public Utilities Commission of Ohio (PUCO) oversees licensing and tow truck regulations and compliance. All for-hire tow trucks operating in Ohio must register with PUCO.
Create a business plan. Include the general idea of the business, the location, the target market, how you plan to reach them, an analysis of other towing companies operating in your location and how much financing you will need to start. Also include any relevant business background you or any of your partners possess. The business plan will help you organize your thoughts, and you can use it as a fund-raising tool for banks or investors. As of August, 2010, startup costs for a towing company ranged between $10,000 and $50,000, according to entrepreneur.com.
Purchase or rent vehicles. If you have good startup capital, you can purchase one or two vehicles to start your towing operation. Purchase more as business grows.
Licensing and registration. You must register with the Ohio Secretary of State and get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). You can register a sole proprietorship, corporation or limited liability company (LLC). Because of the liability risk of a towing business, you should opt for a business structure that offers liability protection such as an LLC or corporation. The fastest ways to obtain an EIN are either through IRS.gov or calling IRS at 1-800-829-4933 from 7 a.m. to 10 p.m.
Get an Ohio vendor's license. A towing service “must obtain a vendor’s license for each fixed place of business where the towing service provider is located," according to ohio.gov. To apply for an Ohio vendor's license, contact the Ohio Department of Taxation, or go to the "Ohio Vendor's License Application" link (see Resources). The cost is $25, as of August, 2010.
Hire drivers and perform background checks. Place an ad in your local paper for tow truck drivers. Conduct interviews with the best candidates. Choose drivers based on experience, dependability and clean driving record. Companies like the Union Township Police Department in Cincinnati, Ohio, will perform background checks for both state and federal records for about $50, as of August 2010.
Market your services. Target private citizens for emergency services and businesses needing illegally-parked vehicles removed, according to entrepreneur.com. Have a strong presence on highways and busy intersections with billboards. Also have your phone numbers printed in large font on the side of your trucks. Make deals with property managers to contact you when they need a tow truck.
- no parking tow zone sign image by Stephen Orsillo from Fotolia.com