The Monthly Costs Associated With Running A Towing Business

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The Monthly Costs Associated With Running A Towing Business

Written By Don Archer Connect with him on Facebook

Now that you’ve read the post How to Get Started in The Towing Business and have a rough idea of the possibilities with regard to income you need to continue your investigation into the towing business. To determine if this is a good fit for you, you’ll need to know what recurring expenses you’ll have on a monthly basis.

With every business there are two sides to the profit equation; Income and Expenses. Obviously you want to have more money coming in than going out and you do that by either spending less, selling more or both.

Before we go further we’re going to establish certain assumptions:

All numbers here are hypothetical and are dependent upon your circumstances.
You’re an individual with no employees.
You operate one tow truck, wrecker or carrier it doesn’t matter.
You either operate out of your home or an existing business that has another source of revenue.
These expenses do not include any amounts for overhead such as real estate mortgage, rents, electricity, trash, and other expenses that go along with an office, garage or storage facility. If you run this business out of your home you’ll need to check with the authorities to be sure you’re operating within the rules.

The average costs of running a one-truck operation will vary dependent upon your choices. You’ll obviously have higher monthly mortgage and increased insurance payments if you finance a new truck. On the other hand, purchasing a used tow truck will cost less up front but it may eat you up in repair bills. The choice is up to you.

Recurring Monthly expenses for a towing business can include


Tow truck mortgage $1,288-
($80,000 truck financed for 6 years at 6%)

Fuel $1,282-
(220 calls @ 20 miles each & 13mpg with $3.79 gal/ diesel)

Insurance $300- (high deductible)

Repair Bills $500- Variable depending upon many factors (age of truck/ upkeep)

Advertising $500- Variable but expect to spend at least

Phone $100-

Damages $300-

Uniform $75-

Miscellaneous $50- Ticket Book and Office Supplies

This list doesn’t include any expenses you’ll pay annually such as Licenses, taxes, subscriptions, and dues. And you’ll make other discretionary spending choices when it comes to training and upgrading equipment throughout the year. This is a good place to start so that you understand how much money you’ll be required to bring in monthly to make it.

About the Author:

Don G. Archer is the former owner of a 12 truck, 20 employee towing business. He now spends his time helping others build and start successful towing businesses around the country. Don is a multi-published author, educator, and speaker and is known as the tow-evangelist, www. thetowacademy.com Want to learn more? Email him direct at don@thetowacedemy.com

3 Comments

  1. Demetrius L Pierce sr October 20, 2017 at 9:46 am - Reply

    Hi , my name is Demetrius Pierce “Big Dee” I had a towing in 90’s and early 00 loss it due to divorce and I was thinking of starting up again but was wondering is the money still there like it was years ago…Some of my friends that are still in it say no because of insurance and how the price of trucks have gone up , so I was wondering can you still make above living verses staying working a job at 40,000 yearly..

    • Don Archer October 20, 2017 at 11:55 am - Reply

      Big Dee, Of course you can still make money in the towing business, if you’re smart. That means steering clear of dependency on motor clubs, staying away from working in cities where the rotation is controlled by 3rd-party dispatching companies, and being found where good, cash paying customers are looking for your services. Go ahead, Get in the game.

  2. Adam January 14, 2018 at 2:27 pm - Reply

    Hi Don, I am willing to start a small towing company in Edmonton Canada. But I am not sure how goes the business here, is the money good here. as I head here is no motor clubs or dispatching companies like US. The market seems good I guess! But I wondring if you have any hook up here or any informations how the business goes?

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