How To Start a Roadside Assistance Business?

Imagine your mates are on a road trip, and your car breaks down on a deserted road. Isn't it frustrating? And yes! The analysis ends your fun trip and makes finding help on a highway or a solitary road with limited access to the city challenging. And this is where Roadside Assistance comes in. If your vehicle breaks down, roadside assistance and towing assistance come to a rescue to arrange a tow, repair a flat tire, jump-start a dead battery, and more. The cost of these services is often a small price to pay for the peace of mind they provide.

43,000 roadside assistance businesses are running only in the US, a record high in the last 10 years. The vehicle roadside assistance market is estimated to be valued at 25.76 billion dollars in 2024 and is expected to reach 36.82 billion by 2031.

Are you planning to start your roadside assistance startup and need help figuring out where to start? You're at the right place. Here, we will cover the entire business model, market analysis, and setup process.

Risk and Profit Margin

Roadside assistance is a reasonably lucrative industry. Like any other business, it involves risks. One significant risk is a loss caused by competition. When choosing your operational region, exercise the utmost prudence. Plan your functions as much as possible in areas with little competition.

Some Common Problems that Require Roadside Assistance

Here are the common problems car owners raise while driving. This will help you align and start a roadside assistance app.

• Tire Inflation Changes.
• The Vehicle's Refueling.
• Car Cooling After Outrageous Temperature.
• Due to machine failure, a mechanic is needed.
• Repairing specific vehicle components as a result of crashes

Immediate Roadside assistance becomes a blessing in such incidents. However, the victim might have to pay twice the usual fee.

Target Market of Roadside Assistance Business Start-ups

Since you are deciding to start your roadside assistance business, determining the right target markets is crucial to its success and growth. Tailoring your services to specific market segments can help you better align your business with the industry.

Individual Drivers: Individual vehicle owners and motorcycles use roadside assistance services whenever their vehicles break down, crash accidents, batteries die, or they get a flat tire. Individual drivers often seek more reliability, fast response times, and cost-effectiveness. Drivers get the convenience of easy booking, quick responses, and zero long or hectic waits.

Car Rental Agencies: These agencies require consistent roadside assistance services for their fleet of vehicles. Rental images often have many cars on the road at any given time frame, and vehicle breakdowns or accidents are common. Providing roadside assistance to rental customers improves customer satisfaction and protects the rental company’s assets.

Fleet Operators (For Businesses): Fleet businesses consist of a fleet of vehicles, such as trucking companies, delivery services, and taxis. Thus, fleet operators rely heavily on their cars to perform their operations. Roadside assistance is crucial for keeping fleets on the road for reliable and immediate service requirements.

Insurance Companies: Many insurance agencies offer roadside assistance for their policy buyers. These agencies usually partner with roadside assistance businesses to fulfill their customer needs. By partnering with insurance companies, your roadside assistance business can get good revenue opportunities from a steady stream of customers who need immediate help during emergencies.

Step-By-Step Guide: How to Start a Roadside Assistance Business?

A roadside assistance business is a perfect startup venture. However, careful planning is required while investing in tools and technology for operational and customer service needs. Here is a roadside assistance business blueprint, including the key steps, terminology, and processes.

Step 1: Conduct Market Research

If you are prepared to start your business for Roadside Assistance, then you need to understand what the market demands and align that with your software or application. Apart from this, the entrepreneur needs to identify the market and its competition and determine where his or her potential audience is before jumping into it.

Any successful business requires careful assessment and documentation. You need to segment the market; by targeting individual drivers, car owners, fleet operators, and insurance companies, you would be able to identify your customers.

Step 2: Competitive Analysis

Entrepreneurs must thoroughly complete an assessment of competitor analysis. This research consists of analyzing existing roadside assistance providers in your area. You must understand their pricing, service categories, and customer reviews and opinions.

A professional marketing individual can use tools like SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to check competitors and find marketing gaps in their business. Thus, you can start your business by fulfilling them initially.

Step 3: Create a Business Plan

You can choose your business structure, such as Sole Proprietorship, Limited Liability Company (LLC), or Corporation (for scalability and investor funding). You can also decide on service offerings and pricing that you will provide, such as tire changes, battery jump-starts, fuel delivery, lockout assistance, towing, etc. You must have your financials ready before jump-starting the business. This will demand careful calculation, investments for the establishment, and running costs meant for the welfare of infrastructure, employees' wages, and towing service on distances.

Step 4: Obtain Licenses and Permits

Besides, small business owners should also register their companies with the appropriate officials in a region or state. Such registrations include trademark registration, business license, towing permits or certifications from local authorities, vehicle third-party insurance, and employee insurance for their safety.

Step 4: Take Licenses and Permits

Entrepreneurs must register their businesses with appropriate local or state authorities before starting a roadside assistance business app. These registrations consist of trademark registration, business license, towing permits or certifications from local sources, vehicle third-party insurance, and employee insurance for their safety.

Step 5: Purchase Equipment & Vehicles

To undertake towing services in the industry, you will need a number of light, medium, and heavy-duty vehicles. You would also need specialized tools, like jacks, tire repair kits, battery jump-starters, hydraulic systems, and towing accessories. If you will be managing several large fleets and dispatching them, it is essential to think about investing in GPS tracking systems. Maintaining and servicing your vehicles and tools would be necessary to avoid breakdowns.

Step 6: Set Up Operational Infrastructure:

The business should possess cloud-dispatching software with a mobile application for task dispatch to service vehicles. This should connect to GPS to optimize routes and track movement in real-time. The application must also facilitate smooth interaction between the drivers and the customers. A 24/7 customer support system should also accompany the business in case of emergencies. For this, the companies need to hire a Roadside Assistance App Development team to create a system in their business's backend.

Step 6: Employees Recruitment & Training

Hire qualified technicians with experience in vehicle repair, towing, and emergency services. Ensure they have necessary certifications and licenses for roadside assistance, such as ASE (Automotive Service Excellence). Also, dispatchers familiar with the GPS software and system, service routing, and emergency call management should be hired. After providing software training to handle customer requests and track service orders, they must take their assessment.

Step 7: Marketing & Sales Strategy

Entrepreneurs should recognize the role of marketing and sales strategies in promoting their business ventures. PPC (Pay-Per-Click) and SEO (Search Engine Optimization) can improve a company's top visibility in search engines. Every company needs to have handles for its social media presence, especially Facebook, Instagram, and LinkedIn, for customer interaction and service introduction.

Step 8: Launch Your Business & Scale Up

Instead of starting full-scale operations and expecting things to work out, begin with small offerings of primary services in small geographical areas and find the kind of response the market gives them. Gather vital feedback and operate accordingly. After the market has responded positively to the expanded offerings and service areas, more employees should be hired to balance the workload by extending the operation.

How to Earn Money With a Roadside Assistance Business?

Here are some key ways to make money with vehicle roadside assistance businesses.

Service Fees: This is the most simple model. Businesses can quickly charge desirable amounts from needy ones for each service they book through your app, like towing, jumpstarts, or tire changes. You can offer tiered pricing based on the service type and distance.

Commissions: Instead of charging users directly, you can earn a commission on each service booked through your app. Partner with service providers and negotiate a percentage of the booking fee they receive.

Subscription Model: Users must pay a monthly or yearly charge to access a certain number of services or discounted rates.

Freemium: Offers essential services for free, with premium features available for a fee.

Advertisement Model: Display targeted ads within your app based on user location and needs. Partner with related businesses like auto repair shops and car dealerships and display their ads.

How Much Does It Cost To Start a Roadside Assistance Business App?

The approximate cost of starting a roadside service business app is between $10000 to $20,000 and above. However, this can depend on many factors such as design complexity of the application, integrated features, maintenance and support, experience level of the development team, geolocation capabilities, and timeline.

• readymade mobile app
• mobile app development cost