How Do I Start A Roadside Assistance Business
We adore our vehicles, but occasionally they malfunction and leave us stuck. You might be surprised to learn that the market for roadside assistance, which is worth $11 billion, is still growing.
If you know a lot about cars, this is a great time to start your own roadside assistance app, help people who need it, and get a piece of this huge market.
But to succeed, you'll need a little business expertise. This step-by-step guide has all the information you need and will put you on the fast track to making money on the side of the road.
What is a Roadside Assistance Business?
A company that offers roadside assistance helps people whose cars break down on the highway and leave them stuck. Help can come in the form of gas, fixing flat tires, giving a jump start, or, if a fix on the roadside is not possible, towing the car to a nearby mechanic. A company that offers roadside assistance makes money by charging customers for these services.
Over 43,000 roadside assistance businesses operate in the United States, which is a record number in the previous ten years. In 2022, the industry is expected to make $10 billion, which is 1.3% less than what it made in 2021. Even though the industry's income dropped in 2022, it is very likely that it will grow faster in the years to come as the global economy wakes up from the slumber caused by the pandemic. Industry sales growth over the previous five years has averaged 2.6%. The pandemic-induced shutdown is mostly to blame for the drop in growth.
An encouraging sign for the industry is the recent rise in new car registrations and mileage.
1. Vehicle owners
Owners of cars and motorcycles can use roadside assistance when their vehicles break down, their batteries die, or they get a flat tire. Owners of vehicles tend to choose subscription-based membership, although some users who don't have one might require assistance in an emergency.
2. Business Contracts
Businesses with a lot of commercial cars may choose to use roadside assistance companies on a contract basis. This is a profitable prospect because it guarantees steady revenue for your company. To prevent their cars from being inoperable for an extended period, several companies that offer first responder services may have standards for rapid resolution based on duration.
3. Insurance firm contracts
Roadside help is a common feature of insurance plans offered by insurance firms that provide solutions for auto insurance. So, if you want to develop a clientele that generates a lot of cash, you might think about negotiating contracts with insurance firms.
Compared to other product-based enterprises, starting a roadside help firm has little up-front costs.
a. Registration and license fee
You must incorporate your business and register your company name as a trademark. The cost of a business license or permit may be between $100 and $300. The average cost of incorporation is $175.
b. Office Setup
In a tier 2 city, you can rent reasonable office space for as little as $1500 per month. Your office does not have to be in a desirable area if you are in the roadside help company. Compared to other businesses, this provides a reprieve from overhead costs.
To be ready for unforeseen events, it is always a good idea to have business insurance. Depending on the value and functioning state of your firm, insurance typically costs $200.
You should keep some mechanical tools and spare parts on hand, including a battery pack, a floor jack, jumper cables, an air compressor, screwdrivers, and a battery analyzer. Depending on how large of a geographic area you intend to serve, this might cost you as much as $3000 on average.
e. Tow Truck
A tow truck is a need when launching a business providing roadside assistance. By renting a tow vehicle for your company, you can cut expenditures.
f. Labor Costs
For the operation of your firm, you must hire a few vehicle mechanics. When compared to other industry segments, labor costs are just somewhat higher.
Risk And Profit Margin
Roadside assistance is a reasonably lucrative industry. It involves risks, just like any other business.
A significant risk element is a loss brought on by competition. When deciding on your operational region, exercise the utmost prudence. Plan your operations as much as you can in areas with little to no competition.
Due to the nature of the company, there is also a great deal of variance in income that should be taken into account. This can be countered by choosing contract-based services from corporations and insurance providers, which generate consistent money for your company's operations.
Some Common Problems That Require Roadside Assistance
- Tire inflation changes
- The vehicle's refueling
- Car cooling after excessive temperature
- Because of a machine failure, a mechanic is needed.
- Repairing specific vehicle components as a result of collisions
- Such assistance turns into a blessing at the moment, and you might twice the usual fee.
This post will help you if you want to start a business offering roadside assistance. There are specific actions you must do to launch a roadside help business. Among them are:
The first step in properly incorporating your firm is to select a name for it that is already in use and register it with the Registrar of Companies or other appropriate state agencies. You have the option of finishing the procedure on your own, hiring a company secretary, or using a business registration service provider.
When referring to the roadside assistance industry, Logistics defines success. Your company's ability to adapt fast to user wants and grow depends on how well you do this. Utilizing technologically supported processes and tools to efficiently manage service requests for your company gives you an advantage. When task flows are automated, bottlenecks that are expected to occur at different phases of operations are eliminated.
It is crucial to ensure brand awareness among your potential customers as a newly incorporated small business. When it comes to marketing demands, geo-targeted digital advertising is the best option because it is quicker and less expensive than traditional marketing strategies.
Excellent paid advertising platform that enables you to target particular demographics, such as Cleveland-area men under 50.
Instagram has similar advantages to Facebook but a distinct target market.
SEO will help your website rank higher in pertinent search results, which is essential for boosting sales. Make sure your website is optimized for calls to action. Test different combinations of text, color, size, and placement for calls to action like "Schedule Now." This may significantly boost purchases.
Google and Yelp
Listing on Yelp and Google My Business might be essential to attracting customers for firms that depend on local clients.
Frequently Asked Questions
1. How do you define roadside assistance?
Roadside assistance is a service that helps drivers who have automotive problems and require aid in getting back on the road.
2. What advantages does roadside assistance offer?
Some of the benefits of roadside assistance are emergency services like towing, filling up your gas tank, replacing a flat tire, giving you a jump start, and other things.
3. How can I get on-the-road help?
The majority of vehicle, insurance, and emergency roadside service companies sell roadside help.
4. What kind of services does roadside assistance offer?
Roadside assistance may offer a variety of services, such as emergency towing, tire changes, fuel deliveries, jump starts, and emergency electrical services.
5. What do the expenses for roadside assistance include?
The price of roadside assistance may vary based on the provider and the kind of service required. Additionally, it might be covered by some car insurance policies or emergency roadside service membership packages.
A portion of an entrepreneur's daily life is dealing with obstacles. What distinguishes you from the competition is your viewpoint on problems and their solutions.
The roadside assistance business is a good option for first-time business owners because it has low overhead costs and is easy to find workers. Grepix Infotech can give you marketing automation and business operations solutions that are backed by technology.