Profit Outcome: The True Cost of Starting a Roadside Biz

  • How to Successfully Start a Roadside Assistance Business
  • Roadside Assistance Benefits: 7 Frequently Asked Questions Answered
  • Boost Your Revenue: Proven Roadside Assistance Sales Boosters!

Introduction

Roadside assistance is one of the fastest growing businesses in the transportation industry. In 2020, the industry was estimated to be worth over 2 billion worldwide and is expected to grow at an average rate of 6.8% over the next five years . With an increasing number of people relying on auto services, roadside assistance companies are emerging as a viable solution for car owners.

Despite its growing popularity, starting a roadside assistance business is a substantial undertaking. Aside from the funds that go into starting the business, some costs are unavoidable. These include vehicle acquisition, insurance coverage, website design, marketing materials, legal fees, business licenses, office equipment, employee salaries and advertising costs.

In this blog, we will look at the expenses associated with starting a roadside assistance business and the cost of running it. We’ll also explore other important considerations for starting a successful roadside assistance business, such as hiring staff and accessing start-up capital.

start-up costs

Starting a roadside assistance business can be a great way to earn a living, however, it’s important to be aware of the estimated start-up costs involved. Here is a breakdown of the average costs associated with opening a roadside assistance business:

Cost Average amount (USD)
Acquisition of vehicles ,000 – ,000
Insurance cover ,000 – ,000
Website design ,000 – ,000
Marketing material 0 – ,500
Legal fees ,000 – ,500
commercial license 0 – ,000
Office supplies ,000 – ,000
Employee salaries ,000 – ,000
Advertising costs ,000 – ,000
Total ,000 – ,000

Keep in mind that these are estimates; Costs can vary depending on the size and scope of the roadside assistance business you are looking to start.

Acquisition of vehicles

Before you can open a roadside assistance business, you will need to acquire and outfit vehicles for service. There are several options for acquiring new and used vehicles for this purpose. Factors such as budget, size of roadside assistance business, geographic considerations, and other factors should be taken into account when making this decision.

New vehicle acquisition

If you decide to purchase new vehicles, the cost of your vehicles will depend on the make and model you select. According to the Kelley Blue Book Price Advisor™, the average cost of a new vehicle in the United States in the third quarter of 2020 was ,742. However, the cost of a vehicle could range from ,000 to over ,000, depending on the make and model selected. You may be able to reduce the cost of a new vehicle by negotiating a discount with the dealer or taking advantage of available incentives. Additionally, you may also qualify for government financial incentives to purchase electric or other fuel-efficient vehicles, which may lower the cost of acquiring new vehicles.

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Acquisition of used vehicles

If you want to save money on the cost of acquiring your vehicles, you might want to consider buying used vehicles. According to the Kelley Blue Book Price Advisor, the average cost of a used vehicle in the United States in the third quarter of 2020 was ,434. Used vehicles can cost anywhere from ,000 to over ,000, depending on the make and model you choose. Used vehicle prices can vary by location and you may be able to negotiate a better deal with the seller. Additionally, used vehicles may also be eligible for government financial incentives.

In addition to the cost of the vehicles themselves, you will also need to consider the costs of vehicle maintenance, taxes, registration and insurance. You will also need to pay any applicable tariffs or fees associated with importing used vehicles. Additionally, depending on the type of service you offer, you may need to install specialized equipment in your vehicles, such as a GPS tracking device, which can add to your vehicle acquisition costs.

Insurance cover

When starting a roadside assistance business, one of the most important things to consider is insurance coverage. This coverage is necessary to protect your business against third-party damages, such as legal fees and medical expenses that may arise from your services. In addition to protecting your business, it demonstrates to your customers that you are trustworthy and dedicated to providing safe service.

Insurance coverage costs vary widely and depend on the size and scope of your business. According to the 2017 SBA report, the median annual cost of liability insurance for home-based businesses in the United States is 8 per year. In contrast, for a small business with 1-5 employees, the median cost is ,500 and for a business with 10-50 workers, the median cost is ,500.

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The cost of insurance coverage also depends on the type of coverage you purchase. Most small businesses should obtain liability coverage to protect them against claims related to personal injury or property damage. You may also consider add-ons such as workers compensation and commercial auto insurance.

In addition to the cost of the cover itself, be aware that you may be responsible for additional costs such as administrative fees, legal fees and taxes. You can also review your policy regularly to ensure coverage is up to date.

Ultimately, when starting or launching a roadside assistance business, the cost of insurance coverage is a big factor. Be sure to do the research to get the coverage you need at a price you can afford.

Website design

Website designis an important step when starting a business, and a roadside assistance business is no exception. Having a website is a great way to reach new customers and let them know about the services you offer. However, the cost of website design can vary greatly depending on the complexity of the project and the designer you choose. On average, most web design projects can range from 0 to ,000, depending on the features you need. A basic website with simple functionality will only cost a few hundred dollars, while more complex websites can cost upwards of a few thousand dollars. If you know coding, you can design the website yourself, but it may take some time. Hiring a website designer with experience building sites for roadside assistance companies is the best option if you want a website that looks professional and is optimized for search engines. Some web design services offer custom packages to meet your specific needs. These packages usually include basic design services and can cost around ,000 or more. Complex websites with custom features, such as reservation systems and payment integrations, can cost up to ,000. It is important to searchdifferent web design companies to find the best price for the services you need. Most web design companies offer a free consultation, so take advantage of that and do your due diligence before committing to a service. When considering a website design company, look for one that offers a wide range of services beyond website design, such as search engine optimization (SEO), content writing and web hosting. This will make it easier to manage your site and promote it effectively. Overall, website design can be a major investment when starting your roadside assistance business, but it’s important for reaching new customers and marketing your services. The cost of website design can vary depending on the complexity of the project and the designer you choose. Do your research to find the best web design company for your needs and budget.

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Marketing material

When starting a roadside assistance business, you need to consider the cost of marketing materials. Depending on your budget, promotional materials will be needed to help spread the word and increase your visibility in the market. This could include anything from custom signage, banners, printed materials and promotional gifts or merchandise. On average, small businesses can invest a minimum of ,000 for a set of promotional materials. This cost may be higher for larger companies.

When considering marketing materials for your roadside assistance business, you should consider the following:

  • Custom signs and banners
  • Swag (promotional gifts)
  • Printed materials (brochures, flyers, etc.)

Depending on the type of promotional item you are looking for, costs can range from a few cents per item up to several hundred dollars. For example, a basic banner with your signage should cost between -0 , but a custom designed banner can cost up to 0 , depending on complexity. A personalized gift item such as a t-shirt or hat may cost less than . However, specific or personalized materials may cost more.

Overall, it is important to consider the cost of marketing materials when starting a roadside assistance business. Depending on your budget and the type of promotional items you need, costs can vary greatly. When designing your promotional packages, you can also explore affordable options, such as offering discounts on services or free add-ons with your membership plans.

Legal fees

Opening a roadside assistance business requires legal paperwork, and often, substantial legal fees. Depending on the size and scope of your business, the process can be simpler and more budget-friendly, or it can get quite complex and require thousands of dollars in legal costs. It is important to exercise due diligence in researching what is necessary in your state to adequately protect your entity.

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The legal costs of opening a roadside assistance business will vary greatly depending on the state you operate in and the complexity of your business. For example, those who want to form an LLC will need to factor in state filing fees , as well as business license and permit fees. According to the latest statistical data , the median legal fees associated with setting up an LLC are around 0 USD .

In addition to filing fees, you may need additional legal assistance in the form of a business attorney . This may include assistance in writing the operating agreement for the LLC, processing contracts, awarding employment agreements, or identifying and addressing potential liabilities. Depending on the nature of your business, legal fees can range from a few hundred to several thousand dollars.

commercial license

If you want to start a roadside assistance business, you will need to acquire the right business licenses and permits. This process can be daunting and the cost of licenses can vary greatly depending on a number of factors such as business location or the type of services you offer. These costs can range from as low as for a one-day license to 0 or more for a full year of licensing. It is important to check with the relevant authorities for the exact costs of the specific licenses you need.

For example, if you plan to open your business in the United States, besides the general business license, there are additional requirements to operate in the transportation and towing industry. There are many states that may require a commercial driver’s license, as well as liability insurance, drug testing, and business registration. The cost of licensing and obtaining a commercial driver’s license differs from state to state and can range from to 0.

In order to safely tow vehicles, a roadside assistance business owner must consider certifications and possibly trained operators, which can range from 0 to ,500. Depending on the services you choose to provide, you should plan to budget an additional 0 to 0 for assorted repair tools and emergency equipment like air compressors, jumper cables, and emergency lights. Additionally, you should invest in items like well-maintained towing screens and first aid kits.

In other countries, such as the UK, commercial license costs may be slightly different. The most important thing is to have current licensed and regulated activity here, including an owner’s certificate, and a vehicle salvage certificate, which would cost £165 per year. This fee includes an operator license, as well as an approved operator license.

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In conclusion, the cost of acquiring business licenses and permits for a roadside assistance business can be significant. Therefore, it is important to conduct research and determine exactly what is required to comply with regulations in your area.

Office supplies

When starting a roadside assistance business, it’s important to make sure you have all the right office equipment to support your day-to-day operations. This could include computers, monitors, printers, furniture, and even software. According to recent reports, the average cost of the most common office equipment purchases can range from ,000 – ,000 USD . Here are some of the most common office equipment items you may need to purchase when starting your roadside assistance business:

  • Computer: From desktops to laptops and tablets, buying a computer for your business can cost anywhere from 0 to ,500.
  • Monitor: Monitors are generally less expensive than computers and range from 0 to 0.
  • Printer: The cost of buying a printer can range from 0 to 0.
  • Furniture: Furniture for a business can cost anywhere from 0 to ,000.
  • Software: The software needed to run your business can cost anywhere from 0 to ,000.

In addition to office equipment, you may also need to invest in various other items such as a vehicle, tools and hardware supplies, telephone systems, and business insurance. To find out exactly how much it will cost to open/start/launch your roadside assistance business, it is best to speak to a professional who has experience in this field.

Employee salaries

When starting a roadside assistance business, employee salaries will be one of the major costs associated with running the business. The International Labor Organization calculates that wages in the United States generally tend to range from .25 per hour to .00 per hour.

Average salary per hour

  • Elementary School Teachers – .02
  • Mechanical – .17
  • Pickup Truck Drivers – .33
  • Gas Station Attendants – .41
  • Auto Glass Repair Technicians – .15
  • Locksmith – .88

It’s also important to consider additional costs such as payroll taxes and training when setting your hourly rate. The cost of salaries can quickly add up in a small business, so it’s important to budget in advance to ensure you have the resources to hire employees. According to the Bureau of Labor Statistics, the average private industry wage in the United States in 2019 was .17 per hour.

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Advertising costs

Advertising your roadside assistance business is key to ensuring your services are seen and used. Many entrepreneurs underestimate the costs associated with advertising, and without proper consideration, they can be stuck with hefty bills they hadn’t planned for. According to the latest data from Statista, in 2019 the average cost per thousand impressions (CPM) for an online ad was .60 .

For roadside assistance companies, different forms of advertising should be considered, such as radio, print, television and online. Radio ads may be slightly cheaper with a CPM of .10 , while TV campaigns may be more expensive, with a CPM of .00 . Print ads can cost as much as .00 for newspapers, and as much as 0.00 for magazines.

Depending on the type of advertising option, the cost of roadside assistance companies may vary. When setting up a budget and schedule for your business, be sure to consider these costs and plan accordingly.

  • Average cost per thousand impressions (CPM) for an online ad: .60
  • Cost of a radio ad: .10
  • Cost of TV ad: .00
  • Cost of a newspaper print ad: .00
  • Cost of a magazine print ad: 0.00

Conclusion

Starting a roadside assistance business can be a complex and expensive undertaking, but it is also lucrative. Businesses can access start-up capital to cover the costs of necessary equipment, employees, and licenses. By investing in permits, vehicle acquisition, insurance coverage, office equipment, and other necessary resources, a business can be ready to open.

Successful roadside assistance businesses rely on efficient service, trustworthy employees and good customer relationships. Satisfied customers can dramatically increase a company’s profit margins, while dissatisfied customers can have the opposite impact. It is important that adequate resources are allocated to ensure that every customer has a positive experience.

When done correctly, starting a roadside assistance business can be a great investment that offers great returns. With the right business plan, the right resources and the right staff, the cost of starting a successful roadside assistance business can be well worth it.