Want to Start a Tow Truck Business? Watch This First

have you ever considered starting a towing company i make a hundred thousand dollars per year per truck towing cars like this every day kenneth orm is going to share all the successful strategies you need to start a towing company i have drivers that can only earn 400 a day where i can earn 800 in a day benefit of leasing is you can get into a vehicle with a limited amount of money i can't find a job i'll make a job this is america if you did 10 000 you're gonna have at least 3 500 in fuel that's what the truck earns for picking up this that's pretty good turnaround for just a couple minutes i doubled my profits this way the other thing you're gonna have to have is a snatch block that's how in three years i have four trucks so ken here wait ken wait i thought we were gonna talk about [Music] ken tell us a little bit about yourself and how you got involved in this business i was a 34-year journeyman machinist and unfortunately i got cancer five years ago and by the time they got the surgery done they took up my entire left kidney and i went back to work and got promptly informed by my company that they were going out of business oh man okay and is that what led you to i went looking for a job and then i walked into everybody's office and i'm 59 years old everybody wanted me in their office so they found out i was 59. i can't find a job i'll make a job this is america i love it well why don't we walk around your setup so what do you have here model how did you get it this is a 2013 ford f-650 the bed on this truck is rated at 12 000 pounds okay the wheel lift is rated at 4 000 pounds the truck is rated at a grand total of 26 000 pounds so i can put a medium or heavy duty vehicle on this bed but i can't tow anything else with it at that point [Music] how did you find your first customer what did you do specifically i had a contract with insurance auto auctions before i owned my first truck i went at it with the attitude get somebody who's going to use you and then get the truck it does me no good if i have a truck and i'm stuck making payments and i don't have anybody that's going to put me to work okay so let's touch on that then because i think it's very important for our audience and that is how did you get that relationship with iaai and any suggestions on having those contracts in place there's companies like copart insurance auto auctions and other places like that that hire subcontractors with towing trucks and that's how i got into it in the first place did you just walk in and say hey i've got a towing company and put me on your list does that cost you anything no well i've been there three years now and i'm one of their senior people they see me as their trouble shooter they have a problem they send it to me i make sure it's taken care of [Music] let's talk about break even then so there's a certain amount of dollars you put into the business to get going how soon did you get that back because of covid i just started my business i'd been just bought my second truck when cobit hit and then all of a sudden i got a truck that has to sit in my driveway for a year break even point hit about maybe six months ago okay because every penny i make goes back into the business that's how i have four trucks now i'm bad so if i didn't want a scale of four trucks and i put in six grand how many toes do i have to do to get that back can vary from market to market i earn an average of at least 10 000 a month if you did 10 000 you're gonna have at least 3 500 in fuel depending upon how many miles and i've had drivers that want to get gas up in king county where it's 60 cents a gallon more no thank you king county [Music] but i would think like when you're getting into this business you have to have a spreadsheet to con you know to keep track of your clients or your i only have one client okay for the most part right now that's insurance auto auctions well let's talk about that because then you mentioned insurance auto auctions as your client versus private why are you here versus there or both well i looked at it when i started the business if i went at the business with the attitude of people are going to call me well i don't have the advertising budget everybody else has so i'm gonna be pretty well out on that but working for the insurance companies i'm not getting rich but like i said i earn a hundred thousand dollars a year per truck and you get pretty much a consistent flow of business year round now when it rains it gets busier when it snowed oh my god my phone was ringing off the hook gotcha yeah you wish you'd have a button that says duplicate ken yes 10. let's make it happen get all those busters it's hard to find people that have my work ethic tell us about all the services that you offer as a company and what are the most profitable and why i offer jumpstart i don't do gas delivery because you're charging 25 to deliver one gallon of fuel at the price of diesel you know i can't make a profit doing that you'd just be a nice guy though oh yeah but so what other services i do jump starts motorcycle towing my most profitable is lockout so and anywhere within 10 miles of my yard is sixty dollars and it goes up twenty dollars every ten miles can you open up my tesla if i called you on it or have you done it uh i haven't done the tesla and yet just curious i have all the equipment on my truck to open up just about any vehicle i need to why is that most profitable i mean what are the profits there fifty percent well let's see i'm there for about three to five minutes tops and i charge sixty dollars that's pretty good turnaround for just a couple minutes if there's anything important in the world of licenses when you start a towing company what can you tell our viewers what are important where do you get them any tips tricks on that your business license you're going to have to have before you can even start your business check now to drive a truck like this at 26 000 and under you can do that with a regular driver's license all right now when you get into my medium duty record now you're talking about you have to have a commercial driver's license oh the cdl yes because of the weight of the vehicle because the average semi weighs about 30 000 pounds that's a whole different animal yeah you know and you're not picking that up with this and they want to make sure that you have the experience and training to be able to do that so it's a month-long course to get your cdl okay and then insurance was exuberant i mean why is it so so much it's 12 14 grand a year per truck per truck per truck six you said six thousand per half a year is that that's not all problems six thousand for one truck my renewal is coming up next month for three trucks fifteen thousand in change can you have lower insurance but then you're risking something else it's not worth it because i have to have a minimum of a quarter million dollars for any vehicles i have on my deck the biggest fear the insurance company has i'm not going to have this vehicle strapped down securely it comes off the deck and lands on somebody else that's going to kill somebody yeah i see that so that's why the insurance is so expensive for a flatbed truck records are considerably cheaper but with a record you can only haul one vehicle at a time whereas i double my profits this way [Music] what's your average monthly revenue i average right around ten thousand dollars per truck before take home profit yeah if that even happens right well every penny i make in the business goes back into the company that's how in three years i have four trucks i see i have 200 000 worth of trucks sitting in my yard and it all started with me getting this truck so this is the first trophy yeah what do you have here i mean what's important when you're doing your day-to-day uh what's inside this box um it's a little sneaky just everything you need i've got my flares that i have to have my fire extinguisher my air hose so i can fill up tires jump box so i can start it right ultimate strap down methods for vehicles that have a tore off wheel or stuff like that and tools to accompany everything i need to do i mean are we talking thousands of dollars here or what would all this no no no no no this is the most expensive thing i have in here and that was 250 okay i want to have a good jump box one that's going to jump several vehicles not just one okay besides what you have in here ken what else is a must-have with either the tools or systems that you have on this machine here it's important to have four straps one for each corner of the vehicle all vehicles have to have to be lashed down in four places and they got that special spot there okay so if you're using the winch that counts as one you still have to have a strap on the front and two straps or chains on the back is that a law ken yes okay so you're just abiding by that request compliance with the laws now a lot of people don't run a bungee cord like i do on my chains but that's so they don't drag the ground if they drag the ground and the state patrol stop you and half of the link wore off they're gonna make you stop right there leave that vehicle and go get new chain right what is your monthly overhead ken my monthly overhead is right around four to five thousand dollars per month i have two trucks i have payments on plus each truck costs 50 a day for insurance how does that vary when you drive versus the employees driving when i drive first of all i don't draw a paycheck every penny i get goes back into the company once my business is successful enough i believe it's going to pay me back well versus employees when they drive obviously when they cross your they get a third straight off the top then all the other expenses come out so i'm lucky i see maybe 15 of the revenue from that so if they can do the type of work i do well then that pushes the margin up because i have drivers that can only earn four hundred dollars a day where i can earn 800 in a day seems like this interesting we've interviewed a ton that that volume is super important if you if you would make more that's really what it comes down to yes and it's all determined by the driver right for somebody that wants to get started ken but doesn't have much money right what would you tell them how did they get into this industry start somewhere do they finance do they lease do they go to the bank their grandma i went looking for a loan so i could buy a tow truck and found out that you can't get a loan to start a business unless you've been in business for two years i wound up going into it on a lease rent to own the truck sold for fifty thousand dollars by the time i'm done paying for the truck it'll be a hundred and six thousand dollars wow in a nutshell what are the pros and cons of leasing the benefit of leasing is you can get into a vehicle with a limited amount of money right the downfall of it is is if you don't find the right leasing company you're going to be paying them double whatever the original amount was so do a little diligence and find out if they say there's no peer pa penalty for prepayment make sure that the amount is going to be adjusted [Music] tell us about marketing advertising strategies that have been successful for you my most successful one is word of mouth i pick up your car you're broke down i give you an experience unlike any other tow company has ever given you now you're going to tell your friends yeah most likely and they're going to tell their friends i get so many calls from people telling me i was told i need to call you nothing else that's it man you're really keeping it simple yeah and doing great i try my best if i give you the best experience you can have out of a bad situation what more can you expect it's such a joy to hear that one of our viewers was inspired to start a business after watching an uplift video if you're someone who's looking to start a business we're excited to share how taylor brands can help you jump start the process if you don't know where to start taylor brands is an ai driven one-stop shop for aspiring small business owners just answer a few questions on taylor brands website and they will help you generate a logo create your brand identity and choose a domain website email and business cards they even help you get your llc and trademarks once everything is set up you can order branded merch and share your logo website and digital business cards on social media they can even help you with templates and get started making money the best part is you can get all this for the fixed cost payment with plans starting as low as 8.99 per month so make sure to check them out today and you can use code up flip 40 for 40 off taylor brands plans or click the link in the description below as we walk around your truck and sort of these two vehicles that you'll be hauling do you use any systems or sops to manage your workflow on my workload as soon as i come back with two vehicles they assign me two more but do you use like a software and app to manage that just the app that they give me at insurance auto auctions okay are they the ones that you solely work with they're my primary source of work i'm also trying to branch out into the private side okay but if you're trying to get work on the private side and you're starting a business you're going to be out of business before you make your first payment okay that's an important tip we'll ask you more questions about that so we can dive in deeper [Music] ken what is this thing it's a tool that every tow company needs to have what does it cost that is a cordless tow light made by tow mate and it's 220 dollars every time you press a break or turn signals no turn signal see okay yeah so you're never incorporating i'm not stringing wire every time it's real quick i can pick it up oh it's magnets okay let me see how heavy it is have you ever lost these things i've had a few lost and i found out the hard way some cars have plastic hoods magnet's so sick to plastic [Music] let's talk about how you differentiate yourself from your competitors how are you different what are you doing differently well the one thing i have that i'm different from everybody else i have no hidden fees most of your towing companies will charge you anywhere from 75 to 125 dollars just to use the winch to pull your vehicle on oh wow now i consider that part of the job because nine out of 10 times you're calling because your car won't run so what is it fair to you if i charge you an extra 125 for five minutes of work is it fair it's a business i wouldn't be happy about it as a customer i'd be like but i've been the person trying to figure out how to pay for emergency roadside assistance right and still eat that week it's not fair to put somebody through that any other way or just just to keep your prices low and not too much twice as low because you've got a body shop or a car shop that's already going to see how deep they can put their hand in your pocket it's not fair for me to be the first one [Music] so why do you think most or a lot of towing companies fail when they do what do you think causes that it's hard to find employees that have a good work ethic if they break or damage something they have a tendency not to want to and discount you know it was like that it's been that way for a long time things like that so yeah employee mismanagement is another thing if you're not paying attention to what your driver is doing with your truck and how he's taking care of it a sensor for your car costs fifty sixty dollars the sensor for this cost seven hundred and fifty to a thousand right [Music] i want to ask you about advertising what are you spending per month ken well advertising i have to have a presence out there in the digital world otherwise i'm not going to get any phone calls so that runs right around 300 a month and how does that allocate across different platforms or is it just one you're using you know i've got three different companies that are working on my website one does take care of all the video and all the information and everything the other one's trying to constantly keep me updated and keep me at the top of the list anything go to uh google per se out of the 300 no no no no i tried that in the beginning but the problem with doing google is say i said i'm going to spend 500 a month but i may have people calling from 80 miles away that aren't going to utilize my service and it's costing me a dollar fifty every time those people call there's probably a way to to to put a demographic and make sure that those people i'm sure there is but i don't know have that ability okay and i'm not commute computer smart you know you want to give me an engine tell me to tear it apart rebuild it figure out what broken it why it broke i can do that well on that note i want to tell you and our audience you guys should check out our podcast because that's where we talk about a lot more stuff especially marketing advertising we've got incredible experts that talk about all those important things so check it out uplift.com forward slash podcast [Music] let's talk about business problems that all of us face on one level or another what are those problems for you and how are you solving some of those things the biggest problem i've had have in my own business is i have trucks that the drivers are allowed to take home every day okay and getting them to understand that that's not your personal vehicle elaborate more on that i get eight to nine miles to the gallon depending upon how you're driving and what you're hauling i see and if you're out there putting 40 to 100 miles extra on that truck that hurts my bottom line so did you allow that before and then stopped or you never did but the employees i had a driver that was putting an extra 150 miles on my truck every day when you're working for the insurance companies i know if you're going to a zone six well that's a maximum of 30 miles out 30 miles back 60 miles right so it's real easy for me to calculate how many miles you should have put on that truck versus how many miles you did right and then i wound up having to put trackers on my trucks let's do a quick blitz time with you ken just fun questions but we can also learn from them so what is your favorite business or book in general my favorite book was jurassic park because they taught you to think on your feet real quick i like that okay if you could win the lottery today and earn a fortune that would last a lifetime would you give up this business no i'm a workaholic what's the most outlandish purchase you've made i've had 48 vehicles at one time that were all belonging to me that's crazy 34 motorcycles what's one of your hidden talents can you show us if anything uh show you i can't i do artwork i used to do greeting cards and stuff like that that's awesome okay and last one what's the one thing you cannot start your day without except coffee tell you the truth my old lady and god that's awesome ken tell us about this guy what's his role in the company he protects my truck i had my phone stolen out of my truck once and you know he'll lick you to death but people don't know that don't tell him that he's the nicest thing in the world right hey charlie but let's fly through a couple more pieces that you would think are must have for any towing guy or gal two things that i can guarantee you you're going to need that you can't live without you're going to have to have skates the skates go up underneath the wheels you knock them up underneath with the hammer and the tire will lift up off the ground the skate will go straight up the deck it doesn't matter which direction the wheels are turned that's good where can i get one and what does it cost uh these go for about 60 for a pair of two it's best to have four because if you've got an all-wheel drive vehicle it's and it don't want to start and you can't get it out of gear well the only way you're gonna get it off the deck is you're gonna have to put a skate up underneath each wheel okay the other thing you're gonna have to have is a snatch block because when the vehicle goes to go dragging off at an angle you don't want it to you can utilize that to drag the vehicle back the direction you want it to you can also hook that on the trees when you're having to do a long recovery all right wrap one of these chains around the tree hook that onto it and run your cable out [Music] how many hours a week do you work on average average i work 60 70 hours a week wow i don't get days off besides the driving and picking up cars do you do anything else throughout for the business i have three trailer parks two apartment complexes that i do impounds from and i also have emergency roadside assistance road america the insurance company is calling me too that generates about 10 to 15 percent of my revenue okay so versus towing and then roadside assistance roadside and sorry towing is about 10 the rest is auction off of insurance ottawa insurance okay so 90 10. do you wish do you wish that was different today well i'm trying to get deeper into the personal towing and that type but i don't have the budget everybody else has for advertising is that your choice to stay here and you kind of want to keep it at this price or do you want to grow at some point well i'm not ever going to be like the other towing companies i'll guarantee you that like i said i've had to figure out how i'm going to pay for emergency roadside assistance i can't do that to somebody ken what makes an exceptionally great employee for a toilet company well you know when they stay in contact with you and they keep you aware of what's going on with your vehicle and if they're having any problems and you tell them that you have the answers if you have any problem just tell me what your problem is and i'll give you the answer because my job is to help you any advice on finding those employees and for you what's it like been for the last month you're solo i've hired three people in the last month two of them i had to fire and one quit because i explained to him you know the truck needs maintenance i can't be driving 16 hours a day or something like that and you're out there 12 14 hours a day and i can work on my truck your truck and everybody else's truck so that's just not gonna happen you have to take care of the truck so if you don't know how to be a car mechanic that would probably be a tough i'm even willing to teach you what you need to know i don't have a problem with that makes sense because we succeed together as a team or we fail as a achieved what is the pay structure so you have this corporate relationship with the auction well what do they pay you per let's see that highlander is a hundred dollars that's what you earn that's what the truck earns for picking up this this vehicle is an 85 vehicle they have zones for every vehicle okay if i go up to anacortes which i've done that's 240 dollars per vehicle right but you wasted a lot more fuel or used a lot more fuel so what are you netting on these 185 250 at the end of the day especially with diesel these days at six bucks oh yeah i know that's really killing me uh but at the end of the day i'll tell you the truth i can get a profit of about three hundred dollars okay and that's doing six cars in a day [Music] and you're a 24 7 business obviously so how do you deal with that i'm sure people are wondering man to operate a 24 7 business how is that on you mentally tell us more about that side of things i get calls all hours of the day and night i don't get more than a couple hours of sleep at a time wow that's your choice yeah that's a choice i've made because if i want to be profitable i have to answer the phone because there's a lot of people that don't answer the phone and they advertise their 24 7. man but that can't be i can't imagine that being sustainable for too long so what are you doing to stay sane i'm trying to hire drivers so they can lighten the load so i can have more free time so when i've been up a long day because there's days that i get a call at 11 30 at night i go to bed at night yeah so i've got two and a half hours of sleep if i'm lucky i get back from doing that call i get back at two o'clock in the morning at 3 30 in the morning i get another call and by the time i get back from that one it's time to go do my day job was there ever a point when you felt like giving up in this business can you describe that to our audience and how you overcome it six months into the business i was ready to go back to being a journeyman machinist i made 120 000 a year as a journeyman machinist and i got to see most of that money whereas with this all my money goes back in the business so which point did you just overcome that that hill and kept kept persevering i have a goal to where eventually this is going to be my retirement so if you want to achieve a goal you have to figure out what sacrifices you're willing to make absolutely when you first got started ken did you do any some kind of financial planning uh did you go to some professional paid the money what did that mean i couldn't afford to do that i was down to i didn't have a job i need to find a job and i'm going to have to make a job so it was all flying by the seat of my pants what tips suggestions do you have when it comes to financially planning to get going what would you share with our audience that we have value make sure you have a good line of credit because without a line of credit i wouldn't be where i'm at now amazon turned out to be one of my best friends because they gave me a business line of credit so i could order any equipment i needed for the truck interesting i was going to ask you that question so like when you buy your equipment do you go to your o'reillys or did you no no no i have zips aw direct and that's where i buy a lot of my stuff from the tow light i buy directly from tow mate but a lot of my other equipment i buy directly from amazon gosh who doesn't these days huh well they have everything i don't have time to go maybe that'll be true soon [Music] if you wanted to double your revenue from 100 to 200 what would you need to do and add to your business to make that happen well the first thing i need to do is i got to have a good dependable truck and a good dependable truck you can get anywhere from 25 to 30 thousand dollars so add uh more reliable trucks anything besides trying to find a qualified driver that's going to put the work and effort in that's required it's not a hard job you get out you do 15 20 minutes worth of work and then you're driving again for another hour or so okay well for somebody that loves driving hey that's something you may want to consider right and the craziest part is i used to get upset with traffic traffic doesn't bother me now i'm getting paid to sit in traffic give me a highlight of an exceptionally great customer experience that you focus on i treat them like family you know i don't look at you as a mark the next person on the line that i'm supposed to read your pocket or anything like that because i help you in your time in need now you're going to pay me for those services now if i treat you right the next time you need help you're going to call me i think it can with charlie i i don't care how long it takes me to do whatever i do i don't get upset i don't get mad i do the job you weren't open that long before the kids it almost killed my business you're gonna say how did you get through it what did you do i was fortunate i had a girlfriend that had a job and basically she was giving me her paycheck every week so i could get through how come you couldn't drive cars that are broken during that time that doesn't mean because nobody was driving they shut everything down okay there's no cars out there moving there's no traffic so there's no accidents you know and it was great at first there's no traffic i could make great time getting to pick up my vehicles but shortly down the road there's 35 tow trucks sitting in the yard waiting for the next run and when you need to make 400 a day to cover your overhead and all of a sudden you're facing you're making a hundred hundred and twenty dollars a day man that's a tough blow that is did you do anything specific to get through in terms of marketing finding business or did you just kind of i took on doing impounds in any type of work i could find to try to survive whoever needed a truck you're there yeah okay [Music] and when you need to learn something new that you don't know which resources do you go to learn something youtube for a lot of things on my truck i don't know a lot didn't know anything about diesel's when i first started the business and i've spent i don't know how many hours on youtube trying to find the answer to my problem so you went to the youtube university of sorts yeah and no other local resource or book that really the library will help you because they'll give you diagrams that you might not be able to get through the conventional sources because like one of my trucks has air over hydraulic brakes now if i want to look up air brakes and how to disassemble it there's all sorts of information on that air over hydraulic there's almost no information okay good to know [Music] seasonality of this business every business that we've interviewed goes through some kind of seasons is that the case for a towing industry in the grand scheme of things the summer would be possibly the slowest season summer more people drive though oh yeah more people drive and you would think because more people are drinking while they're driving that there would be more only one adversity but it seems like three raindrops fall from the sky the people in the state don't know how to drive just from my perspective that's true and then when the snow season hits i can work 22-hour days if the law will allow me to do that but i'm not i'm limited by 12 hours a day and then i have to have 10 hours of downtime so it's on average it sounds like it's it's there's no high low once you put everything together and i only travel 250 300 miles in a day and i can make up to 800 in that one day the overhead on the truck is roughly 400 a day so anything above that 400 is profit not a high mark to reach if you're well the part for me is because the driver gets a third off the top and then everything else comes out of the two-thirds that's left right so at times i'm only seeing 15 but when the driver knows better what how he's to do the job and gets up to the pace i'm at well then i'm seeing a 30 40 return [Music] anything else you want to mention in terms of operating and managing your websites just all that side you use a third party but just want to see if there's anything else i work so many hours a day i don't have time to deal with managing my website and everything else that makes sense i wish i did have the time to do that because the first company i hired they posted i had all sorts of calls coming in but the storyline they told about my company was a lie and i can't have anything in my business that's a lie absolutely you have to have a good reputation it's all on integrity [Music] give us a quick understanding on how you chose your service area or how how that works well my service area i'm right by i-5 and 512. so i've got what i consider a prime spot with two freeways and i try to go no more than about 25 30 miles because anything beyond that they're not going to call me i have had people do that having me towed the vehicle to a shop right down the street and asked me if i could give them a ride to their house since i'm going back to tacoma wow [Music] how would you do things differently when you started with what you know now can anything come to mind for starters i bought this truck from fleet sales west i made it 60 miles from there before i had two code lights come on and their attitude was well that's not our problem that's your truck so what would you do different this time for those watching too they don't want to make it i have a laptop computer so i can now hook up to the truck to see if there's any issues with the truck i see so you're saying before you buy a truck show up hook up and see for yourself they let you do that if you have your own laptop yeah but they won't let you use theirs oh interesting okay well we appreciate that ken this has been a pleasure thank you so much not a problem don't forget to check out taylor brands by clicking the link below and make sure you use code up flip 40 for a 40 discount to start your new business in minutes

Channel: UpFlip

Views: 521,317

Keywords: tow truck, towing, tow, towing truck, how to start a tow truck business, how to start a tow truck business in california, tow truck business start up cost, tow truck business plan, tow truck business income, towing business, start towing business, how to start a towing business, how to start a towing company, start towing company, tow trucks, tow truck videos, truck, towing cars, towing company, towing service, tow company, tow car, towing a car, tow truck business, upflip

Id: pk4B1Q28SCs

Length: 32min 41sec (1961 seconds)

Published: Mon Apr 18 2022