Starting your own repo business can be daunting, but once you get going the hard work is well worth it. You make your own hours, you make your own schedule, and you’re building a company you can be proud of. If you’ve been thinking about starting a vehicle repossession company, the hardest part is just figuring out what to do first.
One great way to invest in your new repo business is to look at wheel lifts. They require a lower investment cost than a tow truck or wrecker, but can do just as much, if not more work.
But, before you can get to purchasing the equipment, you’ll have to start the company first. Here’s a quick guide to starting your own repo business:
Familiarize Yourself With Local Repossession Business Laws
Every state is different. Some require that you follow a training course and pass an exam before you start a vehicle repossession business. Others just require you to have a commercial driver’s license.
Know what you need to start a business, and make sure you’re familiar with your state’s laws on repossession. If you’re just starting out, it’s a good idea to freelance for a larger company or apprentice with another repossession business while you learn the ropes. You’ll need your commercial driver’s license to get started, but the experience you pick up will serve your repo business well in the long run.
Get Your Financing Together
Starting a repossession business is doable, but it’ll require some capital upfront. Make sure you have your financing all together before you get started. You’ll need money for a tow truck if you don’t already have one, an office, your business name and license, insurance and bonding, and enough to cover any employee salaries.
Most experts recommend that when starting any new business, you should have enough capital to cover the cost of operations for about 6 months. While that might sound like a lot, you can apply for a business loan or seek funding from private investors to gather the money you need to get up and running.
Apply for your Repossession and Business Licenses
With financing together, you can really get the ball rolling. If your state requires special licensing for repossession companies, now is the time to apply for that license. You’ll need your repossession license before you can obtain your business license.
If your state doesn’t require special licensing, you can move right to the business license. Most business licenses cost between $50-$60. You’ll just need a business name to get started.
Establish a Location for your Repo Business and Lot
This is one of the more difficult parts of starting a repo business. You’ll want a central location so your trucks are driving the shortest possible distance. You’ll need office space, room for a few desks and chairs, and a computer. If you plan to have a repo lot, it’s best to find a location with a secured lot.
Start Building Your Fleet
You’ll need something to tow those repo vehicles with. Start with at least one towing vehicle, and up to three if you have the capital for them. The more trucks you have on the road the more business you’ll be able to do.
Wheel lifts offer a convenient solution for maximizing your funds. Where tow trucks and wreckers are pretty expensive for any model, wheel lifts come at a lower cost of entry, without sacrificing capability. They are an efficient, long-lasting light-duty towing option that can handle anything your new repo business throws at it, without the upfront cost of a wrecker or tow truck.
When you opt for a wheel lift, you’ll be able to fund more towing vehicles when you start up, which means you’ll be able to tow more vehicles. That puts you one step closer to turning a profit as soon as possible.
Get Insurance and Bonding
With trucks, office space, and soon, employees, your repo business needs insurance. Your trucks will need to be insured to drive. You’ll also need property insurance for your office and lot. Liability insurance is also a must for repo companies; this protects you in the event that you are sued. Some states will also require bonding. Check your local laws to see if bonding is required for repossession companies in your state.
Establish A Business Plan
You’re all set up! You’ve got insurance, a business license, the tools and the training to get started. Before you hire drivers and hit the road, take some time to establish a business plan. This will help you figure out how much you need to bring in a month to keep your business afloat, and should get you started on the path to overall business growth. Set a few goals for your first couple of months, so you know what you’re working towards.
Hire A Team
If you’re planning to hire additional drivers, now is the time to do it. Look for qualified drivers who have experience, who have their commercial driver’s license, and who seem like a great fit for your company. Remember, you’re starting with just a few employees — you’ll want to make sure they’re as dedicated as you are.
Get On the Road
Your business is established. You’ve got everything you need to get your repo business off the ground. Now it’s time to get out on the road and start working.
We wish you the best of luck starting your repo business. If you’re looking for a towing option that is durable, affordable, and economical, don’t forget to check out the Minute Man Wheel Lift. If you have questions, or you’d like to learn more about the Minute Man, just give us a call at 877-593-6959 or contact us online today.
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