John from Riverside Posted December 21, 2015 Share Posted December 21, 2015 (edited) So I have entered into a partnership with a some other people to start up a tow truck roadside and tow company where I live. - I still work full time at my university job - I will be part owner and do the billing for the company.....so I need to learn quickly in some of the aspects of this - There will be a regular tow truck.....to start. As the company progresses they will add a flatbed and another driver Anybody do this kind of work previous or know anything about it? Edited December 21, 2015 by John from Hemet Link to comment Share on other sites More sharing options...
Best Player Available Posted December 21, 2015 Share Posted December 21, 2015 Ask a lot of questions on the internet tubes Before you buy part of a tow truck company. Link to comment Share on other sites More sharing options...
John from Riverside Posted December 21, 2015 Author Share Posted December 21, 2015 Ask a lot of questions on the internet tubes Before you buy part of a tow truck company. Minimal financial risk for me. I have not put that much $$$$ into it. The majority of this is on the majority owner as he has started up a tow truck company before in another city. Did quite well with it. Link to comment Share on other sites More sharing options...
Best Player Available Posted December 21, 2015 Share Posted December 21, 2015 Minimal financial risk for me. I have not put that much $$$$ into it. The majority of this is on the majority owner as he has started up a tow truck company before in another city. Did quite well with it. I guess If I was getting into that business I would find out how to get into the city's and local AAA speed dial. That would seem to be quite lucrative. Link to comment Share on other sites More sharing options...
KD in CA Posted December 21, 2015 Share Posted December 21, 2015 Just make sure you haven't agreed to be personally liable in the event this company is sued. Any liability should be restricted to the partnership entity. And make sure you have clear documentation on ownership rights. I have a friend who thought he was a 'co-owner' in a company. Well he just got fired and isn't an owner anymore so my guess is he never really had any ownership rights. Link to comment Share on other sites More sharing options...
John from Riverside Posted December 21, 2015 Author Share Posted December 21, 2015 Some answers to some of the questions. - The company has insurance requirements and that is all set with a down payment. I am not personally liable as it is a company business with its own insurance. - 4 contracts already secured. Geico and AAA will be on board as soon as the Tow Truck is secured. - I have reviewed my ownership documents. I cannot be taken off without my approval. - As the other owner was in the security business before. Solid contacts with local police department for those type of tows/impounds. Will work to get on "rotation" as fast as possible. - Some things will get bought as the company grows......for instance need a stand along shed on the impound property for FBI tows and impounds as it has to be isolated and taped off. Those really pay. I have learned a lot in a short amount of time.....for instance we found a really good spot (the more cars you can impound the more money this makes....but you have to have room) and this lot was formeraly a marijuana dispensory with a huge back space (can fit about 30 cars) but there was some worry that the zone made it agriculture instead of commercial. Found out today no problem with zone and its suitable for a tow company. the cost of leasing is not too bad and to buy the space down the road is really reasonable. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted December 21, 2015 Share Posted December 21, 2015 Some answers to some of the questions. - The company has insurance requirements and that is all set with a down payment. I am not personally liable as it is a company business with its own insurance. That's not relevant to the situation. Do you have limited liability through incorporation? Link to comment Share on other sites More sharing options...
plenzmd1 Posted December 21, 2015 Share Posted December 21, 2015 Go to the Donner Pass and make a TV show Link to comment Share on other sites More sharing options...
John from Riverside Posted December 21, 2015 Author Share Posted December 21, 2015 That's not relevant to the situation. Do you have limited liability through incorporation? Yes. Link to comment Share on other sites More sharing options...
DC Tom Posted December 21, 2015 Share Posted December 21, 2015 I know in Maryland it's easy work. Sit in a parking lot, wait until someone parks their car, hook it up, demand $300 from them to give it back. I've heard rumors that in some jurisdictions that's known as "theft" or "extortion." But not in Maryland. You might want to double-check CA's laws and see how much you can extort from people. Knowing California, they probably have some wacky law like "It's illegal to tow a hybrid car, unless that car is parked in such a way that it threatens an exotic, endangered snail." Link to comment Share on other sites More sharing options...
John from Riverside Posted December 21, 2015 Author Share Posted December 21, 2015 I know in Maryland it's easy work. Sit in a parking lot, wait until someone parks their car, hook it up, demand $300 from them to give it back. I've heard rumors that in some jurisdictions that's known as "theft" or "extortion." But not in Maryland. You might want to double-check CA's laws and see how much you can extort from people. Knowing California, they probably have some wacky law like "It's illegal to tow a hybrid car, unless that car is parked in such a way that it threatens an exotic, endangered snail." I dont think our company will work that way provides services like tire change, unlocking cars, bringing gas i.e. roadside service Contracts with insurance companies to tow vehicles that break down. get in accidents etc etc. Move vehicles for various reasons but we would be called to do that. Of course the money in this business is the impounds as they charge so much per day (this is why having lots of lot space was important) but I cant see us cruizing around looking for cars to tow. Link to comment Share on other sites More sharing options...
jr1 Posted December 21, 2015 Share Posted December 21, 2015 keep meticulous records for tax purposes Link to comment Share on other sites More sharing options...
John from Riverside Posted December 22, 2015 Author Share Posted December 22, 2015 Are your drivers "employees" or "independent contractors"? That might make a difference te how you pay them and for what (OT?). Also you should make sure you do thorough background and criminal checks on drivers. You don't want a guy with DUIs on his record who ends up driving your truck and killing someone. For sure for sure Right now.....the whole company consists of 3 people. Me, the driver, and my daughter the dispacher and customer service rep. All part owners of the company. As things progress we will add a flatbed truck to the tow truck.....and then we will have to hire another driver who will be paid hourly and everything that comes with that. Link to comment Share on other sites More sharing options...
BringBackFergy Posted December 22, 2015 Share Posted December 22, 2015 For sure for sure Right now.....the whole company consists of 3 people. Me, the driver, and my daughter the dispacher and customer service rep. All part owners of the company. As things progress we will add a flatbed truck to the tow truck.....and then we will have to hire another driver who will be paid hourly and everything that comes with that. So you are a shareholder (as opposed to a "part owner"). How many shares are authorized and how many are issued and outstanding? Can the shares be dilluted? Majority shareholder? What type of voting is required for expenditures over, say, $1000? Sounds exciting. Good luck. Link to comment Share on other sites More sharing options...
snafu Posted December 22, 2015 Share Posted December 22, 2015 Other than what's already been said... Always make sure your workmans comp is paid - you can be personally liable for that not matter how you're organized. Always make sure your unemployment payments are made to the state. If you have to collect sales tax then collect it and send it in like clockwork. Accurately report your income. Don't screw around with labor laws regarding overtime, etc. With any business, the trip ups are the paperwork and red tape obligations. Run those well and you should be good. Link to comment Share on other sites More sharing options...
Nanker Posted December 22, 2015 Share Posted December 22, 2015 keep meticulous records for tax purposes Of course! Why do you think he started this thread? He's already keeping meticulous records right here. Link to comment Share on other sites More sharing options...
KD in CA Posted December 22, 2015 Share Posted December 22, 2015 Don't screw around with labor laws regarding overtime, etc.. Especially in CA. Link to comment Share on other sites More sharing options...
Acantha Posted December 22, 2015 Share Posted December 22, 2015 For sure for sure Right now.....the whole company consists of 3 people. Me, the driver, and my daughter the dispacher and customer service rep. All part owners of the company. As things progress we will add a flatbed truck to the tow truck.....and then we will have to hire another driver who will be paid hourly and everything that comes with that. Won't you need some alternative options for employees? Is your daughter and the driver going to work every day, all year long? Seems like that business is 24/7, no? I know everything comes with time and money as the business expands, but your description makes it sound like only the absolute minimum are on board at the moment. That driver is going to be pretty stressed out after a few long days and middle of the night accident calls. Link to comment Share on other sites More sharing options...
Gordio Posted December 22, 2015 Share Posted December 22, 2015 So I have entered into a partnership with a some other people to start up a tow truck roadside and tow company where I live. - I still work full time at my university job - I will be part owner and do the billing for the company.....so I need to learn quickly in some of the aspects of this - There will be a regular tow truck.....to start. As the company progresses they will add a flatbed and another driver Anybody do this kind of work previous or know anything about it? My friend's dad had a towing company/collision shop. Believe it or not the guy was a millionaire. Hustled his ass off though. Had a scanner & would drive to accidents as soon as he would hear of them. Wouldn't matter what time of night it was either. He is retired now & sold off the business. Link to comment Share on other sites More sharing options...
Gugny Posted December 22, 2015 Share Posted December 22, 2015 I know in Maryland it's easy work. Sit in a parking lot, wait until someone parks their car, hook it up, demand $300 from them to give it back. I've heard rumors that in some jurisdictions that's known as "theft" or "extortion." But not in Maryland. You might want to double-check CA's laws and see how much you can extort from people. Knowing California, they probably have some wacky law like "It's illegal to tow a hybrid car, unless that car is parked in such a way that it threatens an exotic, endangered snail." Only if the hybrid gets less than 40 MPG. Link to comment Share on other sites More sharing options...
John from Riverside Posted December 23, 2015 Author Share Posted December 23, 2015 Only if the hybrid gets less than 40 MPG. Interesting that you would bring up the hybrid..... We have had heavy rains the last couple of days.....I was talking to my partner and he said he loves it when it rains because when hybrids "spin out" there is something that happens that forces them to have to be towed tot he dealership. Cant explain it fully......but something about the way that the car charges itself and spinning out. Link to comment Share on other sites More sharing options...
Gugny Posted December 23, 2015 Share Posted December 23, 2015 Interesting that you would bring up the hybrid..... We have had heavy rains the last couple of days.....I was talking to my partner and he said he loves it when it rains because when hybrids "spin out" there is something that happens that forces them to have to be towed tot he dealership. Cant explain it fully......but something about the way that the car charges itself and spinning out. I hope you and your partner have a nice Christmas! Link to comment Share on other sites More sharing options...
Chef Jim Posted December 23, 2015 Share Posted December 23, 2015 keep meticulous records for tax purposes Wait the IRS doesn't monitor this site do they? Link to comment Share on other sites More sharing options...
Best Player Available Posted December 23, 2015 Share Posted December 23, 2015 Wait the IRS doesn't monitor this site do they? I think it depends on which side of the fence you lean on....... Link to comment Share on other sites More sharing options...
Captain_Quint Posted December 24, 2015 Share Posted December 24, 2015 Get in with some goons and find a good car crushing business that is willing to turn their heads. If you think the FBI pays well, the mob pays even better. Plus you'll always have an outlet for your dead hookers. Link to comment Share on other sites More sharing options...
BringBackFergy Posted December 24, 2015 Share Posted December 24, 2015 Get in with some goons and find a good car crushing business that is willing to turn their heads. If you think the FBI pays well, the mob pays even better. Plus you'll always have an outlet for your dead hookers. LOL Link to comment Share on other sites More sharing options...
John from Riverside Posted December 26, 2015 Author Share Posted December 26, 2015 Get in with some goons and find a good car crushing business that is willing to turn their heads. If you think the FBI pays well, the mob pays even better. Plus you'll always have an outlet for your dead hookers. Won't you need some alternative options for employees? Is your daughter and the driver going to work every day, all year long? Seems like that business is 24/7, no? I know everything comes with time and money as the business expands, but your description makes it sound like only the absolute minimum are on board at the moment. That driver is going to be pretty stressed out after a few long days and middle of the night accident calls. In the beginning it looks like the Tow Truck will run 24 hours......but the office for the impound yard will only be open during the day. The business is going to end up having to expand pretty quickly as far as employees go because the business potential looks very high. At least another employee in the business office and in order to get on rotation with the CHP we need to add a flatbed to our fleet which means another driver. I guess there is a nasty side to this business as it was explained to me today. Yes the Tow Truck driver will be towing in areas where vehicles are illegally parked so in essense that is in fact "stealing" cars. I guess this is a money making part of this business. We would rather not do that but until we are self sustaining with the other services and tows its gonna happen. It is interesting that you have to notify the police within 15 minutes of towing a vehicle (and people have to be properly notified beforehand or it is considered auto theft) Link to comment Share on other sites More sharing options...
boater Posted December 28, 2015 Share Posted December 28, 2015 I got my LLC through Legalzoom.com (it looks like you have already covered that). ...and I am thinking of using Quickbooks online. Don't forget the "towing/impounding from private parking lots" market segment. You can make good money there, but you also need a thick skin because you'll be despised. Link to comment Share on other sites More sharing options...
John from Riverside Posted December 29, 2015 Author Share Posted December 29, 2015 I got my LLC through Legalzoom.com (it looks like you have already covered that). ...and I am thinking of using Quickbooks online. Don't forget the "towing/impounding from private parking lots" market segment. You can make good money there, but you also need a thick skin because you'll be despised. Boater, Same we got our LLC through Legalzoom and I am going to use quickbooks (there is a towing company software that all the insurance companies send their dispatches through that is cloud based called "towbook" and quickbooks is connected with this program. I will use this to track all the billing and expenses (which will be my job in the business) Yes we have discussed this is not going to make us very comfy with the people we tow. Still some work to do to the tow yard before we actually start that aspect of the business. Link to comment Share on other sites More sharing options...
John from Riverside Posted March 3, 2016 Author Share Posted March 3, 2016 So a little update on my tow company venture and wanted to get some opinions on something - Still breathing......made over 7K the first month on our one used little old tow truck. We made that strictly off local tows, servicing rotary clubs, cash calls, etc - We had to adjust our plans on our tow yard (which we had a lease for $1500 a month on a property. Our plan was to raise a fence and do PPI impounds to pay for the tow yard. The county came right as we were about to put up our fence and told us there would be a 30K "Conditional use permit" that we were gonna have to pay. We abandoned the tow yard and have been working out of my house. Here is the issue - We literally have to turn down anywhere from 3-5 calls a day because we have a "wheel lifft" tow truck and not a flatbed tow truck - If we were not going to do PPI's (Which we cant yet because we dont have a yard to store) we would have probably bought the flatbed first - The flatbed also opens up a whole different set of revenue as the rotary clubs that pay more (Geico/Ajuro/Allstate) will not work with you unless we have a flatbed - We are also entering a car battery selling program (the only tow company in the area who does it) with Road America where we maintain and sell batteries. Doing this IF WE ALSO HAVE A FLATBED TRUCK) makes us a primary in the area for that rotary club - Our business had to fight tooth and nail to get the inital loan we have of 17K which was used as startup for the company and included the wheel lift truck we have. The company that gave us the loan for that has no problem increasing the loan for a 18K flatbed truck. Bringing the amount owed on the loan up to 35K......terms for the loan are not great payment per month for both trucks will be 1500 per month. - Projecting profits we think that adding the flatbed we think we can go anywhere from 7K to 10-12 K a month and that is being conservative. We figure we can either - Pay 5k a month on the 35K loan and have it paid 7 months (we have a agreement with a local tow company in place to be able to use their tow yard......we get the tow and they get to charge storage) or - Wait 6 months or so and refinance the loan to better terms. Thoughts? Link to comment Share on other sites More sharing options...
unbillievable Posted March 4, 2016 Share Posted March 4, 2016 Provide free drink and snacks to stranded drivers. Link to comment Share on other sites More sharing options...
DC Tom Posted March 4, 2016 Share Posted March 4, 2016 So a little update on my tow company venture and wanted to get some opinions on something - Still breathing......made over 7K the first month on our one used little old tow truck. We made that strictly off local tows, servicing rotary clubs, cash calls, etc - We had to adjust our plans on our tow yard (which we had a lease for $1500 a month on a property. Our plan was to raise a fence and do PPI impounds to pay for the tow yard. The county came right as we were about to put up our fence and told us there would be a 30K "Conditional use permit" that we were gonna have to pay. We abandoned the tow yard and have been working out of my house. Here is the issue - We literally have to turn down anywhere from 3-5 calls a day because we have a "wheel lifft" tow truck and not a flatbed tow truck - If we were not going to do PPI's (Which we cant yet because we dont have a yard to store) we would have probably bought the flatbed first - The flatbed also opens up a whole different set of revenue as the rotary clubs that pay more (Geico/Ajuro/Allstate) will not work with you unless we have a flatbed - We are also entering a car battery selling program (the only tow company in the area who does it) with Road America where we maintain and sell batteries. Doing this IF WE ALSO HAVE A FLATBED TRUCK) makes us a primary in the area for that rotary club - Our business had to fight tooth and nail to get the inital loan we have of 17K which was used as startup for the company and included the wheel lift truck we have. The company that gave us the loan for that has no problem increasing the loan for a 18K flatbed truck. Bringing the amount owed on the loan up to 35K......terms for the loan are not great payment per month for both trucks will be 1500 per month. - Projecting profits we think that adding the flatbed we think we can go anywhere from 7K to 10-12 K a month and that is being conservative. We figure we can either - Pay 5k a month on the 35K loan and have it paid 7 months (we have a agreement with a local tow company in place to be able to use their tow yard......we get the tow and they get to charge storage) or - Wait 6 months or so and refinance the loan to better terms. Thoughts? Honestly? I think if you have to ask for thoughts here, on the internet, you might be in over your head. Link to comment Share on other sites More sharing options...
JohnC Posted March 4, 2016 Share Posted March 4, 2016 (edited) So a little update on my tow company venture and wanted to get some opinions on something - Still breathing......made over 7K the first month on our one used little old tow truck. We made that strictly off local tows, servicing rotary clubs, cash calls, etc - We had to adjust our plans on our tow yard (which we had a lease for $1500 a month on a property. Our plan was to raise a fence and do PPI impounds to pay for the tow yard. The county came right as we were about to put up our fence and told us there would be a 30K "Conditional use permit" that we were gonna have to pay. We abandoned the tow yard and have been working out of my house. Here is the issue - We literally have to turn down anywhere from 3-5 calls a day because we have a "wheel lifft" tow truck and not a flatbed tow truck - If we were not going to do PPI's (Which we cant yet because we dont have a yard to store) we would have probably bought the flatbed first - The flatbed also opens up a whole different set of revenue as the rotary clubs that pay more (Geico/Ajuro/Allstate) will not work with you unless we have a flatbed - We are also entering a car battery selling program (the only tow company in the area who does it) with Road America where we maintain and sell batteries. Doing this IF WE ALSO HAVE A FLATBED TRUCK) makes us a primary in the area for that rotary club - Our business had to fight tooth and nail to get the inital loan we have of 17K which was used as startup for the company and included the wheel lift truck we have. The company that gave us the loan for that has no problem increasing the loan for a 18K flatbed truck. Bringing the amount owed on the loan up to 35K......terms for the loan are not great payment per month for both trucks will be 1500 per month. - Projecting profits we think that adding the flatbed we think we can go anywhere from 7K to 10-12 K a month and that is being conservative. We figure we can either - Pay 5k a month on the 35K loan and have it paid 7 months (we have a agreement with a local tow company in place to be able to use their tow yard......we get the tow and they get to charge storage) or - Wait 6 months or so and refinance the loan to better terms. Thoughts? Its seems that you are advancing well in your business. Hats off to you. It seems that if you had a flat bed truck sooner you would be in a good position to more quickly generate business and revenue. Is there a way for you to get a lease on a flat bed with an option to buy or rent a truck so that you can secure more business sooner? Edited March 4, 2016 by JohnC Link to comment Share on other sites More sharing options...
John from Riverside Posted March 4, 2016 Author Share Posted March 4, 2016 Honestly? I think if you have to ask for thoughts here, on the internet, you might be in over your head. LOL Im asking for thoughts just to generate some conversation.....I pretty much know what I am going to do. Its always nice to get opinions on things so I am not looking with horse blinders on things Its seems that you are advancing well in your business. Hats off to you. It seems that if you had a flat bed truck sooner you would be in a good position to more quickly generate business and revenue. Is there a way for you to get a lease on a flat bed with an option to buy or rent a truck so that you can secure more business sooner? We have looked at those kinds of options..... We have pretty much decided that we are gonna get the flat bed. This whole thing has been a real learning experience for me as I am one of those low risk...paycheck to paycheck thinking type of people. One of the things that does feel good about this.....we had to make a serious pitch to get our first truck as everyone's credit was crap......I am coming out of a 5 year (which took 6 years chapter 13) bankruptsy.....so the word "credit' gives me a sick feeling to my stomach. but....I have a extemely smart partner. He had rotary clubs on standby waiting for us to start up our business....so we actually did quite well in the first month for a start up business BUT....he did fib a bit....all these clubs really want you to have a flatbed and his pitch was basically that we had a flatbed coming but we really didnt....we are gonna save up cash and buy one outright.....problem now is the clubs are catching on that we only have the wrecker wheel lift because we have not been towing lowered cars..... So...its basically expand or die now. We NEED the flatbed. But....we have made 7.5 K in our first month....the place that financed our 1st truck was more then happy to extend credit for the 2nd one....so...$750 a month not becomes $1500 a month (once again.....buying on credit makes me queezy after 6 years of Chapter 13 BK. For me its not an ideal scenario but my partner points out that we could start seeing a decrease in revenue because of competition from other companies in the area that are more then willing to take out huge loans for their trucks. We are gonna have our flatbead by the end of next week and have found a real promising possible 2nd driver. Link to comment Share on other sites More sharing options...
DC Tom Posted March 4, 2016 Share Posted March 4, 2016 LOL Im asking for thoughts just to generate some conversation.....I pretty much know what I am going to do. Its always nice to get opinions on things so I am not looking with horse blinders on things Oh, okay. I honestly was thinking "If he's looking for answers here, he needs to hire a business manager or accountant or something..." Other than that, I have no real advice. Link to comment Share on other sites More sharing options...
John from Riverside Posted March 4, 2016 Author Share Posted March 4, 2016 Oh, okay. I honestly was thinking "If he's looking for answers here, he needs to hire a business manager or accountant or something..." Other than that, I have no real advice. We probably have some business owner types running around here....not tow compay owners...but still Link to comment Share on other sites More sharing options...
Hammered a Lot Posted March 4, 2016 Share Posted March 4, 2016 (edited) No brainier to me. A flat bed with a wheel lift opens up another line of $$$. What happens if the little old truck goes down? You get a call from a auto club. Oh we can't tow our truck is down. You'll go down the list of reliability. You already put your oars in the water, do you want to row forever or drive a speed boat? Edited March 4, 2016 by Hammered a Lot Link to comment Share on other sites More sharing options...
Gugny Posted March 4, 2016 Share Posted March 4, 2016 I think I'd like to effortlessly drift on a lazy river ... always moving forward at a nice, enjoyable pace. A beer in one hand, leaving the other available to walk the dog at my leisure. Link to comment Share on other sites More sharing options...
John from Riverside Posted March 4, 2016 Author Share Posted March 4, 2016 No brainier to me. A flat bed with a wheel lift opens up another line of $$$. What happens if the little old truck goes down? You get a call from a auto club. Oh we can't tow our truck is down. You'll go down the list of reliability. You already put your oars in the water, do you want to row forever or drive a speed boat? Good thoughts Hammered.....thanks I struggle with this because I suffer from "small time low risk" thinking......been doing it all my life till this venture. Yes that way of thinking is "safe"......but im tired of it....... I mean....where did it get me? I still have had to go through bankruptsies due to small catasrophies in my life.... Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted March 4, 2016 Share Posted March 4, 2016 Too bad you aren't part Canadian... We could send you a box of donuts and case of beer... J/K... Congrats! Not sure how that Canadian sterotype got started... "Beer drinking, donut eating tow truck operator?" Cars must break down (or use to) a lot in the cold...;-) Link to comment Share on other sites More sharing options...
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