Towing Company

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Executive Summary

Topeka Roadside and Towing is a licensed towing and roadside assistance company serving drivers in Topeka, Kansas and the surrounding county. It tows cars and light trucks, helps stranded drivers with jump starts, lockouts and fuel delivery, and stores vehicles in a fenced lot. Most work comes from insurance and motor club dispatch, the city and county police rotation lists and direct calls from drivers. Year 1 revenue is projected at about $231,000, growing to about $587,400 by Year 3. Startup costs are about $167,500.

Company Description

Topeka Roadside and Towing is an LLC owned by Karen Johnson, who has spent six years as a dispatcher and driver at a Topeka towing company. The business will start with two trucks, a flatbed for cars and a light wheel-lift truck for roadside service, and operate from a leased, fenced half-acre lot in Topeka with a small office. Services: light-duty towing and flatbed hauling, accident recovery, jump starts, tire changes, lockouts and fuel delivery, and vehicle storage for police holds and customer vehicles. Rates follow the posted tow rate sheet that the city and insurers require.

How we make money. The plan has these income lines: insurance and motor club dispatch calls at about $95 each, about 1,000 in Year 1; police rotation and direct calls at about $175 each, about 520 in Year 1; vehicle storage (per day) at about $35 each, about 1,286 in Year 1. Pricing is set so each line covers its direct cost and a share of overhead.

Unit economics. In Year 1 direct costs are about $51,372, a gross margin of about 78% of sales. Pay and overhead take most of what is left, so the plan first shows a profit in Year 2. Prices and volumes are set from the assumptions in the appendix and should be replaced with your own quotes.

Problem & Opportunity

Drivers who break down or crash need help fast, and the wait is the part they remember. Insurance companies and the city police rotation list rely on a small number of operators, and customers often wait 60 to 90 minutes at night or on weekends because the existing companies have too few trucks and too little after-hours dispatch. Insurers and motor clubs want operators who answer every call, arrive on time and send photos and paperwork.

Products & Services

A twenty-four hour dispatch line that is always answered, two trucks that cover the city and county and a written response-time goal of 30 minutes inside the city. Dispatch software sends each customer a text with the driver's name and arrival estimate, and drivers take photos before and after every tow for insurers. Karen handles dispatch and one truck herself, and a second driver covers the other shift.

Market Analysis

Topeka is the state capital and a transportation crossroads with major highways, state offices and a large commuter population. Demand comes from three groups: insurance and motor club dispatch networks that need reliable coverage, police and sheriff rotation lists for accident and abandoned vehicle tows, and individual drivers who call directly. Tow demand rises in winter weather and around holidays and drops in dry months, so the plan budgets for uneven months.

Who we serve first. Stranded drivers, insurance companies and motor clubs that dispatch tows, and city and county police agencies that run rotation lists.

Competitive Landscape

Several established towing companies already work in Topeka, some with large fleets. They compete on trucks and long relationships with the city. Topeka Roadside and Towing competes on answered phones, honest wait times and a clean, well-documented process. We do not undercut the posted rates, because the city and insurers set them; we win on speed and paperwork.

Our strengths and weak points. Strengths: Always-answered dispatch line and live customer texts, which busy competitors often skip; Owner with six years of towing dispatch and driving experience and existing contacts at body shops. Weak points we plan for: Two trucks cannot cover every call during winter storms or multi-car pileups; Rotation list approvals take months, so early sales depend on insurer networks.

Marketing & Sales Strategy

Before opening, Karen applies to the Kansas Highway Patrol and local rotation lists and registers with insurer and motor club dispatch networks. After opening: weekly visits to body shops, repair garages and apartment managers who need parking enforcement tows, a simple website and Google Business Profile and a short thank-you note with a card after every direct call. Insurance and motor club work is the steadiest and is built first.

The first 90 days. Days 1 to 30: get the towing license, insurance and city approvals, sign the lot lease and buy the trucks. Days 31 to 60: set up dispatch, hire the second driver and register with insurer and motor club networks. Days 61 to 90: open for calls, visit 20 body shops and garages and apply for the rotation lists.

Operations Plan

Dispatch runs on towing dispatch software with live truck locations and automatic customer texts. Karen answers the phone during the day, and calls forward to the on-call driver at night. Every tow starts with a photo of the vehicle's condition, a signed authorization and a written rate quote, and ends with a signed release. Impounded and stored vehicles are logged in a storage book, kept in the fenced lot and released only to the owner with proper identification. Trucks are inspected daily, and drivers follow written rules for safe loading, hooking and roadside work. Records are kept as required by Kansas and the city.

Key resources and partners. Resources: Two tow trucks, dispatch software, a fenced storage lot, licensed and insured drivers and the rotation list approvals. Partners: Insurance and motor club dispatch networks, police and sheriff offices, body shops and repair garages and a towing equipment dealer.

What we measure. Calls answered, average arrival time, calls per truck per week, share of work from dispatch networks, storage days sold and cash in the bank.

Risks and how we plan for them:
- Winter weather and holidays create spikes we cannot staff. We use a short list of trusted subcontract drivers for storm weekends and tell customers the real wait.
- Rotation list approvals can take many months. We build insurer and motor club work first and treat rotation work as a later gain.
- Storage and lien rules are strict. An attorney reviews our storage and release process, and every stored vehicle is logged, photographed and notified on time.
- Tow trucks are expensive to run. We track fuel, tires and repairs for each truck and replace parts on a schedule.
- Driver safety. Drivers use reflective gear, cones and written rules for roadside work and do not tow outside their truck's rating.

Management & Organization

Karen Johnson, Owner and Dispatcher, is the day-to-day manager and one of the two drivers. A second full-time driver is hired before opening. A bookkeeper handles monthly reconciliation and quarterly taxes, and an attorney reviews the rotation list and storage lien rules.

Hiring plan. Karen drives and dispatches in Year 1 with one full-time driver. Drivers are added as call volume grows, about one more each year, and a heavy-duty wrecker is considered in Year 3.

Outside help. We rely on an outside bookkeeper for monthly reconciliation and tax filings, an attorney for contracts and licensing questions and an insurance agent who reviews our coverage every year. We meet with these advisors at least twice a year and keep notes of what they recommend.

Milestones Narrative

Year 1: apply to rotation lists and insurer networks before opening, open the lot with both trucks in month 3, sign the first two insurer and motor club networks by month 5, revenue about $231,000. Year 2: add a third driver and a second flatbed as call volume grows, win a place on the county rotation list, revenue about $416,200. Year 3: add a heavy-duty wrecker if medium-duty demand shows up in call logs, revenue about $587,400.

What the plan's numbers say. Year 1: sales about $231,000, loss about $33,600; Year 2: sales about $416,200, profit about $51,100; Year 3: sales about $587,400, profit about $113,200; Year 4: sales about $702,900, profit about $148,300; Year 5: sales about $795,300, profit about $169,100. The lowest year-end cash is about $61,700.

How we will keep score. Every month we compare real sales to the plan, check the cash in the bank, review the direct cost of each job or product, and look at what customers say. If sales are behind plan for two months in a row, we slow spending and delay hiring until the numbers catch up.

Funding Request

How much we need and how we will use it. Total needed: $231,000. This number comes from the Funding Need Calculator in this plan. It adds up:
- Startup costs of $167,500, listed item by item in the Startup Costs section (the largest are Flatbed tow truck $68,000; Light wheel-lift roadside truck $42,000; Working capital reserve $20,000).
- A cash cushion of about $63,500. That is the deepest cash dip in the early months plus about three months of bills, so slow weeks do not put the business at risk. Lenders call this "working capital."
- Together that comes to about $231,000 (rounded up to the nearest $500), which is the total we are planning for.
Where the money comes from:
- Owner money: $40,000.
- Equipment financing on the two trucks: $80,000.
- SBA 7(a) loan: $111,000.
Kind of funding we are looking for: Equipment financing on the two trucks: $80,000 at 9.0% interest over 7 years, about $1,287 a month; SBA 7(a) loan: $111,000 at 12.75% interest over 10 years, about $1,641 a month. A loan is money we pay back with interest, and the monthly payments are already included in our cash flow.
How we will pay it back. We expect sales of about $231,000 in Year 1, growing to about $795,300 by Year 5. We expect a loss of about $33,600 in Year 1, a profit of about $51,100 in Year 2, a profit of about $113,200 in Year 3, a profit of about $148,300 in Year 4 and a profit of about $169,100 in Year 5. Year 1 is lower than a full year because rotation list approvals and dispatch network signups take time. The lowest year-end cash balance is about $61,700 (Year 1), so with this funding the business has money in the bank every year of the plan.
What we are offering the lender: the equipment we buy as collateral and a personal guarantee from the owner.
A smaller first step, if needed. If we cannot raise the full amount right away, we can start with one flatbed and subcontract roadside work, use a smaller lot and add the second truck when insurer calls fill the schedule. Duplicate this plan and lower the equipment costs to match.
What if sales are slower? We also tested a cautious case where sales come in 20 percent lower every year. In that case the plan shows a loss of about $79,600 in Year 1, a profit of about $40,500 in Year 3 and the lowest year-end cash is about $61,700, so the business still has money in the bank every year.
All numbers in this plan are estimates. We will update them as real results come in.

Appendix Notes

Documents to attach before you send this plan:

- LLC operating agreement.
- Kansas business registration and towing and motor carrier approvals.
- Insurance certificates for auto, garage liability and cargo.
- Posted rate sheet.
- Lot lease agreement.
- Truck titles and financing agreements.
- Rotation list applications.
- Storage and release procedure reviewed by an attorney.
If you don't have any of this yet, no worries - let's continue.

The assumptions behind our numbers (change them in the Financials section to match your own):
- Insurance and Motor Club Dispatch Calls: about 1,000 units in Year 1 at about $95 each, costing about $28.00 each to deliver.
- Police Rotation and Direct Calls: about 520 units in Year 1 at about $175 each, costing about $40.00 each to deliver.
- Vehicle Storage (per day): about 1,286 units in Year 1 at about $35 each, costing about $2.00 each to deliver.
- Pay: owner / dispatcher and driver $52,000 a year (the same number all five years); tow truck driver $42,000 a year (people in Years 1 to 5: 1, 2, 3, 4, 5).
- Other yearly costs in Year 1: fuel and truck maintenance about $30,000, commercial auto and garage liability insurance about $14,000, storage lot lease about $18,000, dispatch software and phones about $3,000, marketing about $4,000, admin, licenses and accounting about $6,000.
- Tax rate: 21%.
- Every dollar amount is an estimate. Replace them with your own quotes and research.

Plain words used in this plan:
- Rotation list: a police or county list of towing companies called in turn for accident and abandoned vehicle tows.
- Dispatch network: an insurer or motor club's system that sends tow requests to approved companies.
- Flatbed: a truck with a bed that tilts and slides to carry a vehicle.
- Wheel-lift: a truck that lifts a vehicle by its wheels to tow it.
- Storage lien: the legal right to hold a stored vehicle until fees are paid, under state rules.

Startup Costs