To start a tow-truck business, you must first secure a license from the state in which you live. Before investing the necessary time and money, thoroughly research what is involved in starting and running this type of business. Towing companies can be profitable, but usually only after years of hard work.

Things You Will Need

  • Business plan

  • Towing license

  • Tow truck

  • Impound lot

  • Towing insurance

Contact the Department of Motor Vehicles to determine the types of licenses you will need to operate. Complete all required driver tests and show proof of insurance before you open for business.

Create a 12-month business plan that outlines up-front costs for training, tow-truck maintenance costs, rent for impound lots, marketing and hiring. Devise a marketing plan as well.

Take out a business loan if you don't have investment money available. Give lenders your business plan and any other information they request.

Find an insurance provider that specializes in tow-truck insurance. Obtain estimates to determine the best type of coverage, as well as the most affordable monthly premiums. Tow-truck insurance may cover equipment, impound lots, employees and repairs to cars and trucks that may become damaged during the towing process.

Learn how to safely drive a tow truck. You can take courses or learn from someone working in the business.

Register your business by filling out and submitting all forms designated by your state.

Increase profits and maintain a steady stream of work by advertising your towing business through direct-mail marketing, online and in local phone directories. Contact parking lots and other companies to obtain exclusive towing contracts.

Warning

Many states require that you have at least $10,000 to invest in a towing business. Some allow only a certain number of towing businesses to operate throughout the region, which means you may be put on a waiting list until an opening becomes available.