Start a Roadside Business from Scratch

Image of a car

If you are planning to start a new roadside business, the first thing you require is a comprehensive plan. We have compiled a brief yet explanatory guide for entrepreneurs aspiring for the establishment of their roadside assistance plan. Firstly! you must know that in order to succeed in this business, you must have the potential to manage it effortlessly seven days a week and 24 hours a day. If you do not have any prior experience in roadside assistance, the task can be pretty daunting but is possible. 

The roadside assistance business in recent years has become an important component for insurance agencies, auto manufacturing companies, and law enforcement agencies which as a result leads towards an increased opportunity for entrepreneurs. Take maximum advantage of this guide and begin your journey towards a revenue-generating business. 

Understand the Roadside Assistance Industry

When you serve as a roadside assistance business, clients expect that you will be able to tow their cars to the nearest mechanic, unlock their cards, help repair flat tires, bring gasoline, or jumpstart dead batteries. You may be surprised to know that there are more than 38,000 roadside assistance businesses and this industry is valued at $6 billion annually. 

As long as people continue to hit the road, the revenues of the industry are expected to increase. Recent statistics have shown that this is one of the few industries in which small companies can effectively compete against large ones.

Market Research to Determine Niche

Know that the services of a roadside assistance company are not only needed by the individuals with cars that have broken down on the road, but it is also for car manufacturers, car sale outlets, insurance companies, government agencies, law enforcement agencies, as well as research companies. Your business can surpass all of these criteria. Conduct thorough market research to find a niche to focus on in the short and long run. Below are some of the possibilities.

Study Major Competitors 

The brands that have stood out in roadside assistance have succeeded based on certain attributes. If you want to make the most of your investment, it is essential to study your major competitors and the possible challenges. Some of the well-known companies operating in the US are Allianz Global Assistance, American Automobile Association (AAA), Blink Roadside, and Good Sam Roadside Assistance. 

Look into their quality of services, value-added services, how much they charge, areas covered by them, costs, discounts, and business marketing strategies for a successful business plan.  

Legal Entity and A Catchy Business Name

The next step to start a roadside assistance business is to choose the most suitable entity for your business with the help of an attorney or accountant. Don’t take this step lightly as any mistakes could leave you in a serious mess. Know that the choice of entity impacts the amount of taxes you will pay, how much paperwork you need to complete, and the personal liabilities. You can choose between several types of business entities such as sole proprietorship, partnership, corporation, and a Limited Liability Company (LLC).

Once you are done with an entity, it’s time to choose an identity. Think about a catchy name that effectively communicates the nature of your business. It must be memorable, unique, easily pronounceable, and creative!

Protect Business with Copyrights

You must protect your business with the right insurance policies. If you are starting from scratch, you are less likely to know all the legal technicalities thus it's best to get in touch with a professional agent.  

Some of the basic insurance policies you must purchase are general liability insurance, professional liability insurance, auto insurance, health insurance, trip interruption insurance, workers’ compensation insurance, payment protection insurance, and business owner’s policy insurance. Seek the services of a competent business lawyer to get the copyrights of your intellectual property.

Get Professional Certification and Raise the Capital

Although such businesses can be started virtually by almost anyone, it's best to get the required professional certification. This will give you an edge over the competitors. Some of the important online certifications are Roadside Assistance Certification, Pro Towing Certification, and Pro Dispatcher Certification. Conduct thorough research to find accredited and reputable companies to take these certification courses. Hire an attorney to know about all of the necessary legal documents. Find possible ways to raise the capital. 

Suitable Business Location

The location of your roadside business can impact how much money you generate and how your business grows and succeeds. If you are starting your business on a low budget, you can run it from your home. In this way, you don’t have to worry about overhead and certain running expenses. But if you are choosing a location other than your home, you must consider the following factors.

  • the nearness of the location to your target market
  • the easy accessibility of the location for customers and employees

Required Equipment and Manpower

A huge chunk of your business capital will go into purchasing the required equipment and tools. The minimum required items are as follows.

  • A tow trucks
  • Battery pack
  • Gas can
  • Jumper cables
  • Funnels
  • Floor jacks
  • Lockout kit
  • Pull up lockout tool
  • Faster air pump
  • Rubber mallets
  • Breaker bar
  • Hacksaw
  • Power inverter
  • Socket set
  • Lugnut remover
  • Spare tires
  • PB Blaster
  • Wire brushes
  • Impact gun/wrench
  • Box cutters
  • Tire plug equipment and
  • Jack stands

For administration, you would require a computer, phones, cabinets, internet, software, and printers. You need at least 8 key staff members to start a roadside business so find proficient and qualified individuals that identify with your business values.

Effective Business Marketing Strategy

One of the most important aspects of running a business is to make an effective business marketing strategy. Start by listing your business in major online business listing directories like Topspot 101. Install attractive billboards, place adverts in newspapers, magazines, radio, and television stations. Pass out fliers and handbills in strategic locations. Last but not the least, use social media platforms such as Facebook, Twitter, and LinkedIn to market your new roadside assistance business.