Although each and every business is different, I firmly believe that it is possible for a large percentage of towing businesses to double their profit. Now, this doesn’t mean double your sales, I’m just talking about profit, which is obviously the most important thing.
Okay, I know you are skeptical but give me a chance. I intend to show you just how it is possible to do this. First of all, I want to introduce you to something I call, the six profit multipliers. These are six individual variables of the profit formula. If you increase some or all of these, even in small amounts, your profits will increase in amounts that will amaze you!
Here are the profit multipliers:
- Number of people that contact you to price/schedule a tow or other service
- Conversion rate
- Percentage of leads that actually turn into paying customers
- Number of transactions per year
- Number of times a particular customer pays for your services per year
- Transaction value
- On average, how much you charge for services
- Profit margin
- Percentage of transaction value that is profit
- Number of leads (referred by other people) that contact you to price/schedule a tow or other service
Now that you are familiar with the profit multipliers, watch the following video and I will show you the power that the profit multipliers wield!
……okay, I hope you enjoyed the video!
I believe too many times towing business owners focus only on a couple of big things to increase profits, with the main focus on increasing the number of leads. But to really succeed, it’s actually a combination of small things that make all the difference in the world.
This may sound odd, but winning the profit game is like winning the cub scout pinewood derby. The pinewood derby is when cub scouts build a car from a kit that contains only a block of pine, four plastic wheels, and four nails to use as axles for the wheels. Then, the cars are raced against each other on an inclined wooden track that’s about 30 feet long. Now, I have two boys and after about six tries, my son and I won the pinewood derby. How did we do it? Well, I didn’t just focus on one or two big things like polishing the axles or using super-duper fast graphite. I certainly did those big things, but everybody does those things. I had to do all of the little things like focus on center of gravity, make sure the weight is the maximum allowable, wheel cantor, polishing the insides of the wheels, etc. Succeeding at business and doubling your profit requires a similar approach; do all the the little things (i.e. profit multipliers) and you certainly can double your profits.
The towing company’s and their operators have gotten a bad rap for years for just doing their job.The only time you might get a thank you is when you’re rescuing a stranded motorist off a busy highway, putting their life on danger hooking up your car any time of day. On these occasions you’re the greatest thing ever but when you take a car that’s illegally parked boy The expletives fly. The equipment that they have cost hundreds of thousands of dollars , consider that when you’re paying your $150 tow bill.