With over 273 million vehicles plying the roads in the United States alone, the demand for quick and reliable roadside assistance is at an all-time high.
Recent industry reports predict that the global roadside assistance market will hit $29.5 billion by 2026, reflecting a steady annual growth rate of 3.7%. This creates an excellent opportunity for entrepreneurs looking to enter this flourishing industry. And if you're one of them and want guidance on how to start your roadside assistance business, keep reading.
In this blog, we will walk you through each step of starting your roadside assistance business, from conducting market research to building your team and growing your customer base. So, follow along to learn how you can successfully venture into the roadside assistance industry in 2024.
9 Steps to Start your Roadside Assistance Business
While the initial procedures for launching a roadside assistance business are generally alike, the specific requirements and steps may vary depending on your chosen operating model. Check the following guide and make the necessary adjustments so that it aligns with your specific business model.
Now, let's get into the steps of starting the roadside assistance business.
1. Market Research
The first step to starting your roadside assistance business is to conduct market research. Start by analysing local demographics, assessing competitor services and pricing, and identifying consumer preferences. Utilize surveys or interviews to gauge potential customer needs and expectations.
This data will help you determine your business strategy and tailor your services to meet specific market demands.
2. Business Plan Preparation
In this next step, what you have to do is condense your market research into a focused business plan for your business.
Use this plan to define your services, target audience, and competitive strengths. Detail your finances, covering startup expenses, revenue forecasts, and funding requirements, and list your marketing strategies to promote your business.
3. Business Registration
When your business plan is written, you'll know you are ready to fully commit to the industry. This is when you can move forward with registering your business and making it official.
To register your business, you'll have to pick a name and a business structure. These structures include a sole proprietorship, a general partnership, and a limited liability company.
You need to create a business bank account and register for local and state taxes. Contact local business regulators, industry organizations, and other legal experts to make sure you’ve met all the legal requirements for operating a roadside assistance business in your chosen location.
4. Securing Finance
Once you’ve registered your business, it's time to find a way to finance it. The funds you need will depend on the scale of your business and your chosen business model.
In any case, you will have to finance the cost of insurance, other required permits, and such. Depending on your business model, you may need to purchase specific hardware tools as well.
Here are some funding options for you to consider:
- Small business loans
- Equipment financing
- Government grants and subsidies
- Financial assistance programmes
- Personal savings
Properly examine and understand the terms and conditions of any financing arrangement you are considering. Each funding source has its own set of benefits and risks, so make sure that you choose the ones that suit your company's goals and financial circumstances.
5. Application for Permits
Getting the necessary licence is a crucial step in starting a roadside assistance business, and the permits you need will differ according to your chosen business structure; therefore, you need to be mindful when you apply for the licences.
Here is a list of some common licences that you may need to get for your roadside assistance business:
- Commercial Driver's License (CDL)
- Tow Truck Operator License
- Occupational Safety and Health Administration (OSHA) Compliance
- Environmental Permits
The specific requirements also differ from location to location, so consult a legal professional to ensure that your business complies with local laws.
6. Equipment Purchase
If you plan on hiring employees instead of partnering with freelancers, you will need many types of equipment to effectively respond to vehicle breakdowns and provide assistance. Necessary equipment in a roadside assistance business includes:
- Tow trucks
- Service vehicles
- Basic hand tools
- Jumpstart kits
- Air compressors
- Roadside emergency kits
- GPS navigation systems
- Fluids and lubricants
- First-aid kits
The items listed above are just a handful of the many that are required in a roadside assistance service. You will learn more about all of the requirements when you conduct market research.
7. Getting Insurance
Getting appropriate insurance is essential for your business, as it protects your company, staff, and customers from various risks and liabilities. Common business insurance requirements could include:
- Liability insurance
- Commercial auto insurance
- Cargo insurance (to transport vehicles)
Your insurance needs vary depending on the size and scope of the business, so, consult an experienced insurance agent and have them assess the specific risks associated with your roadside assistance business before you purchase the insurance.
8. Team building
Roadside assistance is a spontaneous industry that calls for providing different kinds of professional assistance in unexpected circumstances, which is why you have to build a team of service providers who are ready individuals and knowledgeable in their work.
There are two ways in which you can build such a team of roadside assistance technicians: by hiring employees or partnering with freelancers.
What can I choose? Hiring employees or freelancers
To decide on a method, you need to understand the two methods and evaluate which option suits your business the best.
Here’s an explanation of the two ways to build your team:
1. Hiring Employees
The traditional way to build your team is to hire professionals and have them work as employees of your business. In this method, you assign the service provider work when you receive a job request, and the customers pay your business for the service.
The employees use your business’s commercial vehicle and tools to work on the assigned job, and you pay them for the work they do.
Apart from service providers, you may also need some other employees, like admin staff, accountants, fleet managers, customer service representatives, and such, to help you handle the business's administrative side when you choose to operate your business traditionally.
2. Partnering with Freelancers
Another way to build your team is to partner up with freelancers. Skilled independent professionals often collaborate with roadside assistance businesses to get more job requests. In this case, they are regarded as independent contractors, not employees of your business.
When you partner with freelancers to fulfill job requests from customers, you forward these requests to freelancers, and they decide whether to accept or decline them. You can streamline this process and other tasks associated with working with freelancers by creating apps tailored to the needs of your business.
These apps can help you automate tasks, facilitate communication, and enhance efficiency in managing freelance collaborations.
9. Creating Roadside Assistance Business Apps
Having apps for your roadside assistance business can simplify the process of working with freelancers, as an app can help them handle job bookings, connect with customers, and track earnings in one place.
Even if you choose to hire employees, you can still create an app to enhance customer convenience, and it can help you stand out from other traditional roadside assistance businesses. So, if you're thinking about how you can create an app for your business, here's a simple breakdown: You have two options: custom development or ready-made solutions.
1. Custom Development
Custom development means you create an app from scratch for your business and design its features and functions, according to your preferences.
Here, you work with the developers to build the app the way you want, so everything is done as you desire. This method helps you ensure the app closely aligns with your business goals.
Another method of establishing your app is to purchase a ready-made solution.
2. Readymade Solution
Ready-made solutions refer to pre-built mobile apps and websites that are equipped with features essential for a business. You can purchase this solution, rebrand it, and then launch it.
These solutions offer a quick and cost-effective way to launch your business apps, and here, customisation is also possible.
For example, allow us to introduce you to Wooberly RoadAssist, our ready-made solution that enables entrepreneurs like yourself to launch your roadside assistance business apps.
Wooberly RoadAssist includes user-friendly apps that customers can use to find and request services, contact providers, track jobs, and make payments.
Service providers can handle requests, review job details, receive payouts, track earnings, and more using their app.
Our ready-made solution also includes an admin panel that helps simplify business operations, making management efficient and straightforward for you.
Both custom development and ready-made solutions have distinct characteristics and requirements. Therefore, you must evaluate both methods and decide which is more suitable for your roadside assistance business.
Now that we have discussed the steps to starting your roadside assistance business, ways to build your team, and the means to launch your business app, we’ll look into a few effective marketing strategies that can help you promote your roadside assistance business. Keep reading to find out what they are.
Strategies to Market Your Roadside Assistance Business
To reach a wider audience and expand your business, you must always consider new and unique marketing strategies that will grab your potential customer's attention and help you retain existing ones.
Here are a few marketing strategies that could help you promote your roadside assistance business:
1. Traditional advertising
Traditional advertising is an effective way to promote your business among the local population. Distributing flyers and brochures will place your business information directly in the hands of your potential customers.
Local newspaper ads can reach the targeted local demographic and build brand recognition in your community. This makes your roadside assistance services more familiar and accessible to your local audience.
2. Strong online presence
Getting your business online is crucial to grab the attention of your potential customers in the present era. So, have a business website and stay active on Facebook, Instagram, and X (formerly known as Twitter). Use these channels to connect with customers and show off your services online.
Get your service providers to share stories about the critical jobs they've handled through your blogs and other social media channels. It shows their expertise and attracts people to choose your services.
3. Google Business Profile
Make sure that your business shows up in local searches. You can do this by optimizing your Google Business Profile listing (formerly Google My Business). Ensure that the business information that appears online is accurate, and use local keywords. Encourage customers to leave reviews to improve your visibility online.
4. Partnerships and affiliations
Build partnerships with local businesses, repair shops, and insurance companies for mutual promotion and credibility.
5. Referral programmes
Encourage existing customers to refer others through referral programmes, offering discounts or rewards for successful referrals.
After you start the business, you need to continuously monitor the effectiveness of your marketing strategies. Pay attention to customer feedback, as it provides valuable insights into aspects you may have overlooked. Act on this feedback to enhance customer convenience and strengthen your market presence
In wrapping up our article, we would like to remind you that flexibility and responsiveness to industry trends and customer demands are key to long-term success in the roadside assistance industry.
Reach out to us if you are interested in our ready-made app solution. And we wish you the best of luck with your new venture!