Thinking about starting a tow truck business or growing your current fleet? With this Tow Truck Business Projection Calculator, you’ll get clear insights into your startup costs, revenue potential, and monthly cash flow. Set realistic sales goals, track expenses, and see exactly what it will take to reach profitability.
How to use this calculator
Here’s how to complete the input section of this calculator.
1. Business Information
- Company Name: I used “Tommie’s Towing” as an example, but you can enter anything you want.
- Number of Tow Trucks: By default I used 1 truck since it’s the most common starting point for new businesses.
2. Investment & Loan Details
- Truck Purchase Price: Beacon Funding’s analysis shows new flat-bed tow trucks cost between $75,000 – $130,000. I chose the mid-range point for balanced calculations and set the default at $100,000. You could get this price lower if you go used.
- Down Payment: I set this at $20,000 by default (20% of purchase price).
- Interest Rate: According to National Business Capital, commercial vehicle loans typically range from 4% – 12%. The default is set at 10% to align with this ball-park estimate.
- Loan Term: National Business Capital’s research shows terms can range from 1-10 years, or up to 25 years with an SBA loan. The default is 5 years for a middle ground.
Tow truck in action.
3. Operations Details
- Operating Days per Month: I set this to 25 days. This accounts for typical business days while allowing for maintenance and rest for an an owner / operator.
- Average Tows per Day: I set this to 7 as a realistic target.
- Average Fee per Tow: Business expert Nate Jones that average per-tow revenue ranges between $75 – $125. I picked the median point in this range at $100.
4. Fixed Costs
- Monthly Insurance: I set this to $428 per month. This comes directly from Progressive Insurance’s national average.
- Monthly Maintenance: $500 by default based on industry standards
- Monthly Broker Fees: $400 based on common dispatch service fees. You can think of these like referral fees you pay per tow.
- Labor Costs: I started at $0, assuming an owner-operator model where you get to keep what you make after taxes and expenses of course.
Formulas used in this calculator
Monthly revenue formula:
Monthly Revenue = Number of Trucks × Operating Days × Tows per Day × Fee per Tow
Using my defaults: 1 truck × 25 days × 7 tows × $100 = $17,500 monthly revenue
Monthly loan payment:
Monthly Payment = P × (r × (1 + r)^n) / ((1 + r)^n - 1)
Where:
P = $80,000 (Truck Price - Down Payment)
r = 0.833% (10% annual rate ÷ 12)
n = 60 payments (5 years × 12)
Break-even point:
Break-Even Point = Total Monthly Expenses ÷ Fee per Tow
Using my default fixed costs: $3,028 ÷ $100 = ~31 tows needed monthly
The Details of Towing for Dollars
You know I love a good spreadsheet, but they don’t always capture the nuances of operating this type of business. Fortunately, Nate Jones, Youtuber and CEO of Wexford Insurance broke down the revenue potential and details of this business model you need to know about before taking out a loan on a flat-bed truck.
1. The Sweet Spot of Per-Tow Revenue
“The average tow is between $75 to $125 dollars,” Jones explains matter-of-factly in his video. The default setting of $100 per tow was came directly from Jones’s insights and feels like a safe spot the market naturally settle.
2. How much do you want to work?
When it comes to working days, Jones suggests “24 days a month, yes that’s about one day off a week” can be a profitable schedule for most owner / operators. Nate notes that this accounts for the natural ebb and flow of business. “There’s gonna be some days where you’re really busy and there’s gonna be some days that you’re not busy.”
The calculator’s default of 25 days sits comfortably in this sweet spot, giving operators a realistic target while accounting for those inevitable slow days and maintenance breaks.
3. The Magic Number for Daily Tows
In the Youtube video, Jones bases his revenue calculations on seven tows a day on average. This will generate $700 per day on average if you charge $100 per tow.
Want to join this brotherhood (or sisterhood)?
What makes this even more interesting is the profit margin you could expect in this industry. Jones suggests shooting for an 80% profit margin in your initial projections as a cover for expenses like insurance, gasoline, any sort of random expenses.” This tracks perfectly with our calculator’s built-in expense estimations, including that $428 monthly insurance figure from Progressive that I baked into the defaults.
The beauty of all this? When you run these numbers through our calculator using Jones’ assumptions, you’ll see why he confidently projects a first-year revenue could exceed $200,000.
It’s not magic – it’s math. But you’ll need to be realistic and create a marketing strategy that will generate a consistent volume of tows each month.
Remember: While this calculator provides general estimates based on industry averages and research, actual results can vary significantly depending on your specific market conditions, operating costs, and business model – small changes in inputs can dramatically affect projected outcomes.
This tool is for informational purposes only and should not be considered as financial advice. Always consult with licensed financial, legal, and business professionals before making any investment decisions or starting a business venture.
Related tools:
Dumpster Rental Business Calculator: If you already own a flat-bed tow truck, consider expanding into the dumpster rental business.
About the Author: Brett Lindenberg
