How to Start a Tow Company in Georgia

Few small-business opportunities offer the combined advantage of flexibility and income potential that operating a tow truck company does. Towing companies can flourish when many other businesses do not because there is always a demand for tow trucks even during difficult economic times. Starting a tow company in Georgia requires a special bond and insurance as well as the ability to pass a specialized licensing exam. If you are looking for a steady, recession-proof business, starting a towing company might be the answer.

Go to the Georgia secretary of state's website and find the name and address of the agency or department responsible for issuing business licenses in your area. Contact the local business permit licensing authority in your city, county or municipality and apply for a local business permit. Provide the licensing authority with name and address information for the new towing business. If you will be storing towed or impounded vehicles, provide a sketch for the holding area so the local zoning commission can review and approve the plan for that area.

Visit the Internal Revenue Service's website and apply for an employer identification number (see Resources). Once you apply, you should receive the EIN instantly online. Print out the confirmation message and record the EIN number.

Obtain a commercial driver’s license if you intend to drive the tow truck. Alternatively, arrange for a driver who already has a CDL to drive your truck once you begin operations. If you intend to tow only passenger cars or trucks, you can forgo the CDL requirement. However, you cannot tow larger vehicles without the CDL permit.

Purchase a surety bond from a bonding agency or commercial insurance company licensed to do business in Georgia. The Georgia Public Service Commission requires tow truck operators to maintain surety bonds of at least $50,000 to compensate owners of vehicles in the event of damage, theft or removal of a vehicle without sufficient cause. Confirm that the surety bond has your company's name and address listed and is valid for at least one year from the date issued.

Contact the Georgia Public Service Commission and request an application for a non-consensual towing permit. Complete the NCT application and return it along with the $300 application fee to the PSC. Wait for the PSC to approve your NCT application before proceeding further.

Purchase a tow truck to use in your business. Buy a new or used truck as your budget allows. Also purchase a commercial insurance policy for the truck. Get a comprehensive collision and liability policy that provides coverage protection for the truck itself and other vehicles or property in the event of an at-fault accident. When purchasing an insurance policy for the truck, verify that the insurer has a license from the Georgia Office of Insurance and Safety Fire Commissioner.

Purchase signage for your new towing business and install a telephone line. Place a sign outside your business that has the name and telephone number of your towing company. Purchase signs to place at local businesses for use in no parking or tow-away zones.

Contact businesses in your area and negotiate to place no parking or tow-away zone signs in areas where parking is restricted. Inform the owners of businesses that there is no charge to them for your services and that towing charges are the responsibility of the vehicle owner. Contract with local businesses to provide towing services. Place signs as needed in restricted-parking areas.

Begin advertising your new towing business. Consider placing an ad in the local phone directory, as many customers locate tow companies in the Yellow Pages. Place ads in local newspapers or publications to inform area residents of your tow business. Print business cards and leave them in businesses or offices that have a lot of foot traffic from clients or customers.

Respond to tow requests from customers quickly. Store the towed vehicles in your holding facility, or take them to a repair shop or other location as requested by the customer. Collect a towing fee from the customer or vehicle owner before releasing the vehicle.

References

Resources

About the Author

Jeff Grundy has been writing computer-related articles and tutorials since 1995. Since that time, Grundy has written many guides to using various applications that are published on numerous how-to and tutorial sites. Born and raised in South Georgia, Grundy holds a Master of Science degree in mathematics from the Georgia Institute of Technology.