Roadside Assistance Business

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How To Start A Roadside Assistance Business: Is It Worth The Hassle?

Starting A Roadside Assistance Business

Do you have the ability to manage a business seven days a week and 24 hours a day?

If you’re ready to render service to people from all walks of life, roadside assistance is the startup for you.

Getting started in the roadside assistance business is a daunting task if you do not have any prior experience. This guide can help you get started with the roadside assistance industry.

You’ll be very busy in this line of business since you have to tow cars to the nearest auto- mechanic shop, change flat tires, give gas to customers, jumpstart dead batteries, and even unlock their cars.

If you want to be successful in this type of business, then you’ve got to invest in heavy-duty and high-quality tools, like flat-tire repair tools, jumper cables, flat-tire repair tools, locksmith tools, a mobile device, gas can, and a tow truck.

Running a roadside assistance company can be a good source of income – if you get it right, that is. This guide aims to help you visualize if this business venture is the right fit for you.

Towards the end of this article I’ll answer some of the most frequently asked questions on how to start a roadside assistance business…

But most importantly, I’ll show you the exact system I used to build my own business to over $40,000 a month in mostly passive income.

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Table of Contents

Useful Advice For Starting a Roadside Assistance Business

Your experience as a roadside assistant can benefit you a great deal when starting your own roadside assistance company.

Prior Exposure

Your expertise will be of great value in this field. Experience as a roadside assistant is a requirement in this line of business.

Buying Tools And Accessories

When you are quite sure that you can do the job well, you should buy the tools you need for the job as described above.

As a business owner, you can choose to carry out all the required services yourself or hire workers. For customers who own large vehicles, you can purchase a flatbed tow truck if you have enough funding.

Get Ready To Accept Payment

Set up a merchant account and get a POS machine to swipe credit and debit cards.

Ways To Price Your Service

A successful business structure is vital to your success, since it will allow you to earn an impressive amount of revenue. Surcharges can be added if the service has to be done at night.

The biggest advantage to this business is how much you can make. To find a competitive price in your neighborhood, you will have to do some research.

Calculating Profit

Businessmen always seek to maximize their ROI. You will earn your profit when all your expenses, including interest, are subtracted from your total earnings.

It is important to look at the additional expenses for an employee who has been hired to work a night-shift. You should also include bookkeeping costs if you’re outsourcing them. A profit figure is then calculated before tax.

Finalizing The Area Of Operation

The next step is to define the coverage area. You can reduce your gasoline costs by doing this. To make sure your business activity adheres to the local laws, you should check with your local police department.

As a business owner, you should also inquire as to how your company can be put on the call list so that your business would be visible. If they need a roadside assistance during an accident, they will be able to contact you and and ask for your services.

Beating The Competition

It is also vital to take into consideration your competitors since this is a business that is in high demand. It would be useful to examine how they advertise their business and what special or extra services they offer.

Advertisement

Advertising your business is another step you must take in order to generate more leads and conversions.

Areas Where Roadside Assistance Is Necessary

  • Refueling
  • Replacing inflated tires; Tire change
  • Mechanic repair due to machine failure
  • Cooling of vehicle because of overheating
  • Repair of certain parts of vehicle due to accidents

When you need such assistance, you can charge double the amount you normally charge. The process of starting a roadside assistance business consists of several steps. The following are some of them:

Studying Your Market

It would be best if you studied the market you’re going to enter since it’s a little different from the rest, and since you’re a newbie, it makes sense. Your market study must include a feasibility analysis.

A feasibility study entails doing a full research on the topic by studying the business from all the possible angles such as:

  • Pros and cons
  • How to run the business
  • Profitability
  • Where to find better markets
  • Challenges you may face
  • Resources needed to start a business
  • Required budget

The conclusions of this study will form the basis for you to incorporate your business.

Putting Together Your Business Plan

Putting together a feasibility report will go a long way in creating a business plan. A business plan will detail everything related to your business. The things that are crucial to your business are:

  • What you need to do to start your business
  • A Snapshot of your business
  • Materials needed
  • Necessary Employees
  • Money needed for investment
  • Any challenges your business may run into
  • Workflows and Protocols
  • How much money you’ll make on your investment

Your business plan will serve as your blueprint in launching and running your roadside assistance business.

Your business plan should encompass all the things that are necessary to get your business off the ground. Making sure that your business plan is thorough will serve as a good resource whenever you run into issues. It will also be useful if you ever need to get a business loan from a bank.

Choosing The Area Of Specialization

When launching a new business, it is essential to choose your specialty. A few of the common fields are listed below.

  • Mobile Mechanic Service
  • Roadside Assistance Service
  • Passenger Car Towing Service
  • Servicing Garage
  • Wrecking Services for Motor Vehicles
  • Light Weight Truck Towing Services

These are just a few of the most common services that people usually need when they are on the road. The kind of services you can offer will depend on your financial situation.

Newcomers to this business and those with limited resources will, of course, go for the type of business that’s simple and less costly. Your business plan will help you to make the right choice.

Knowing Your Competition In The Market

A business’ success depends heavily on its ability to compete. Unless you come up with a very innovative or at the very least something different, it is very unlikely that you will succeed if you start a business in an extremely competitive market.

The quality of your service and how much you charge are some of the things that can make you stand out.

There are several types of services you can provide, although not every person is as keen to provide the ones listed above, and you can pick the one that is less competitive.

Last but not least, the location of your business will also determine how tough it will be to compete with your rivals.

There are always dozens of roadside services on well-known business roads.

However, newly constructed roads or ramps that are in remote locations or have difficult terrain do not have an abundance of roadside services, and this is where you could make a big difference.

Choosing The Location Of Your Business

You should consider certain factors when deciding where to expand your business. These are:

Competition In The Market

Your business will not thrive in a location with dozens of competing roadside assistant companies since it will be hard to gain customers.

People tend to use well-known assistance services in such markets, but even then, profit margins are minimal due to the fierce level of competition. Therefore, you should choose a location where there is less competition.

Roads That Are Newly Constructed And Have Less Assistance Service

In the case of newly constructed roads, there will obviously be fewer assistance services or, even if they do, the services will be lesser known to travelers.

Your work becomes easier this way, and you will have plenty of opportunities to reach out to travelers and promote your business. Roads with tough terrain are equally good choices because not too many services are available at such places.

Based On Budget And Comfort

The idea of you starting an assistance business 100 miles away from your location just to meet the two conditions above is absurd. You should decide which is best for you based on a budget and feasibility.

Requirements For Your Roadside Assistance Business

There are requirements you need to consider if you want to start a roadside assistance business.

If you are going to start a roadside assistance service, you will certainly need a variety of equipment, including the following: mechanical equipment to work on vehicles, machines, a mobile vehicle to go to the aggrieved location, mechanics, tools, fuel, and other items.

Here’s a quick look at what your business may need.

Customer Care Service

Excellent customer service is crucial to scale any roadside assistance company.

Normally, your customer will only approach you directly to your place of business in a few rare cases, and most of the time, he will either call or email you. He’ll probably call you or let you know via app if you have that option.

It is necessary to create a customer support service with a dedicated team who is available to help and assist your customers whenever they need it. You will gain more customers if you provide better customer service.

Mobile Vehicle

Having a mobile vehicle is crucial when operating a roadside service company.

After receiving the call from the distressed customer, you need to help him at his location. This will require you to have a vehicle outfitted with all the necessary tools, fuel, and machines so you can service your customer’s car.

You can use any small van that has space for two people and all the equipment required to run the it as your business’ mobile vehicle.

You may benefit from having more than one mobile vehicle so that you can respond to two calls at once.

Your service will be more effective this way.

Equipment And Tools

There is nothing much to mention in this section as any good mechanic can advise you to purchase the required equipment and tools.

If you’re into repairing cars, trucks and motorbikes then each of these motors may require different sets of tools therefore consult an expert and purchase such tools in the set of two for both the mobile vehicles you sent for assistance.

Servicing Machines

To fill air in an inflated tire you’ll need the right machine and motor. A welding machine may also be required for welding purposes.

It is important that you consult with a professional who can assist you in obtaining the proper machines you need. If they are expensive, you can always rent them.

Towing Vehicle

Towing vehicles pick up cars that can’t move on their own. Whenever cars break down and are unable to start, a towing vehicle picks them up and takes them to the service bay for repairs. The vehicles for towing are usually mini trucks or medium sized trucks for towing mini trucks.

Mechanic And Manpower

One of the most important functions of a mechanic pro is to deal with the maintenance and servicing of motor vehicles.

It doesn’t matter which vehicles he is an expert at, it is highly likely that he can handle common problems of most vehicles.

You should seek out a mechanic who has extensive experience in servicing all types of vehicles, whether it is a motorcycle, car, or truck.

With an all-rounder, you won’t have to hire a lot of mechanics. An auto mechanic cannot service every type of car from different makes and models.

Training can be provided in such a case.

Starting From Scratch Or getting A Franchise?

If you want to start a roadside assistance business, these two can be your options depending on your preferences and circumstances.

There are pros and cons to both options, so the decision entirely rests with you. Getting started from scratch is not bad since the profit you make will be yours alone, and you will be in charge.

The franchise model will, however, eliminate much of the trouble that comes with establishing a business, dealing with management and getting customers, as well as the problems of being new to the business and not having much knowledge about it.

In general, a franchise model will help you in most situations, but it can also be rather expensive and come with some limitations and restrictions.

Based on your situation including your expectations and budget, you should make the choice after consulting the experts.

Registering Your Business

While registration is not essential, you should go through the registration process with the required documents.

It is also possible that you need an accreditation certificate of specialization in this industry, which will be given to you by the appropriate authority.

By registering your business, you can build a brand with a memorable name and logo. If you have plans to expand then registration is a must.

Financial Requirements

As a result of the business plan you have created, you will have better insights into the required financial requirements.

Investment capital can be arranged either through your own savings or by taking out a bank loan. Also, you can seek investment from interested parties.

Return On Investment (ROI)

It would not be wise to expect good profits for your business in the first few months, since conventional businesses take time to achieve results. The good news is that marketing and advertising are two effective ways to increase the likelihood of healthy returns.

There are apps that locate the service providers near your customer’s location. These apps are specifically designed for roadside services. The use of billboards on roads, posters, and other media can help to attract new customers through advertising.

In order to get new customers, being in such a good location is extremely important. As a business owner, you need patience and you must work hard with a smart approach for you to succeed.

Lastly, I would suggest focusing more on service as opposed to profit, especially during the early phases of your business. If you are able to gain the trust of your customers, you are certain to achieve success.

FAQs

How Much Does It Cost To Start A Roadside Assistance Business?

A tow truck is the major expense in starting this business. The rate for a new or pre-owned vehicle is likely to range from $10,000 to $200,000. The rest, like insurance, tools, and paperwork, is going to cost another $7,000-$10,000.

How Do You Get A Business License For Roadside Assistance?

In order to operate a towing business, you need three licenses along with all the other local licenses. You will need to call your local clerk’s office for more information about local licenses. Here are the licenses needed for towing services:

Indictment management. A towing truck requires this when law enforcement initiates the request for removal.

Privet property. Whenever a parking facility owner asks a tow truck to tow a vehicle, this is what they need.

Consent tows. The tow truck needs this to tow a vehicle that’s been requested by the vehicle owner.

Do You Need Commercial Auto Liability Insurance?

Whether you are planning to tow a car or not, commercial insurance coverage is necessary. When replacing a battery or tire, one can damage the vehicle.

That is why major auto insurance companies require a commercial insurance policy for your business. See what people are saying on reddit.com. The average cost of insurance is about $3,000.

How Much Does A Roadside Assistance Business Owner make?

Owners typically earn from $25,000 to $40,000 per year, depending on their location. The salary of a roadside assistance technician ranges from $11/hr to $14/hr.

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