towPartners advisor TPA_1112 : Page 1

towPartners x November 2012 x 13 WANT TO BECOME A TOWPARTNERS MEMBER? We have saved our members over $55 million and increased their revenue by $25 million. Join now at www.towpartners.com. IMPOUND RESEARCH In this article, we will tackle this issue in-depth. Let’s start at the beginning, where all business ventures should start – research. By: Nick Kemper ta Trust me, Do your research I t’s been said that success is prepa-ration meeting opportunity. If you are in an urban area, there is likely an opportunity to gain financially by entering the impound market, either by expanding your current operation, or by starting from scratch specializing in im-pounds. If you’re not prepared, howev-er, your chances for success are greatly diminished. Researching the market is the most essential part of your prepara-tion. Impound work is, by definition, local. You have to study your local mar-ket to know whether or not it is a viable business opportunity. First, who are the current players in the market, and how well are they serving the community? Private property im-pound work and police impound work are usually a good combination, so as-sess all of your competition in both of these market categories. Whose im-pound signs are up all over town? Who is towing for the local law enforcement agencies? How are those companies perceived in the community, by their clients, by local media? Call people and ask them. Stop in at a large residential property and ask them how well their impound service provider is taking care of them? Tell them the truth – you’re thinking about getting into the field, and you want to know whether or not there’s a need for a new player. You can, if you feel comfortable with it, reach out to your potential competitors for advice on entering the field. Don’t expect, however, that they will be forth-coming with valuable information, unless it is to discourage your entre-preneurial spirit. Many company own-ers started out as employees for other companies, but more than likely the idea to go into business for themselves occurred to them after they were on the job for awhile. You could take this route -get a job with the number one impound company in town, learn the ropes, and head off on your own -but don’t expect your former employer to jump for joy the first time you take away one of his accounts. Perhaps a more honorable approach would be to pro-pose some kind of partnership or fran-chise opportunity in a different market, after you’ve been under his wing long enough to learn how to fly properly. If you talk to enough people, you’ll get a sense of how entrenched your competi-tion is, and how difficult it will be to take market share away from them. This is also an excellent way to develop sales leads without the pressure of giving an actual sales pitch. You will be meeting potential customers without trying to make a sale – something that will likely put them at ease and get them to talk freely about what you can do later to help them, which is the whole point of being in business in the first place. You might find that the market is untapped -perhaps no towing companies have their signs up all over town. In that case, your research can be finding out if prop-erty owners and managers have parking problems that require solutions. It’s market research – if multi-billion-dollar mega-corporations do it, why shouldn’t you? Perhaps you’re looking into this be-cause you’ve already been approached by property owners or managers to pro-vide the service to them. Don’t let those parties be your only source for research information. Get out into the commu-nity and talk to people. Call local media outlets and ask them if there has been any media coverage of the industry. If there has, it has likely been negative – it’s not often that the lo-cal news reporter breaks a story about the fine job that the tow truck driver did when he impounded the single mom’s car from the apartment complex fire lane. Knowing what the local citizens have been hearing and reading about this type of work can help you craft your marketing strategy later. Municipal Contracts Towing for local law enforcement agen-cies is a good business avenue to com-bine with private property impound towing, provided that contract specifi-cations do not prevent it. Find out the equipment, property, insurance, and personnel requirements. Both munici-pal and private property impound work require property for vehicle storage, and you want to double up as much as pos-sible on income sources for any partic-ular expense you will incur. Start with the city in which your business is, or will If you are not already performing municipal tows, re-search the contract requirements for this type of work. New Reective Uniform Options Sprint® Direct Connect® expands push-to-talk coverage Sprint Direct Connect Coverage Sprint Direct Connect Expanded Coverage towPartners Members are guaranteed up to 25% savings for existing and new customers! For more information call 818-973-3906 today! UPGRADE DIRECT CONNECT PHONE 99 ¢ ea. Kyocera DuraXT Anticipated business benets: With Network Vision, push-to-talk will be backed by a new, improved and more advanced network providing: Expanded coverage Faster broadband data speeds Better in-building penetration memberphonestore.com or call 877-401-2345 Option 1

IMPOUND RESEARCH

Nick Kemper

In this article, we will tackle this issue in-depth. Let’s start at the beginning, where all business ventures should start – research. It’s been said that success is preparation meeting opportunity. If you are in an urban area, there is likely an opportunity to gain financially by entering the impound market, either by expanding your current operation, or by starting from scratch specializing in impounds. If you’re not prepared, however, your chances for success are greatly diminished. Researching the market is the most essential part of your preparation. Impound work is, by definition, local. You have to study your local market to know whether or not it is a viable business opportunity. First, who are the current players in the market, and how well are they serving the community? Private property impound work and police impound work are usually a good combination, so assess all of your competition in both of these market categories. Whose impound signs are up all over town? Who is towing for the local law enforcement agencies? How are those companies perceived in the community, by their clients, by local media? Call people and ask them. Stop in at a large residential property and ask them how well their impound service provider is taking care of them? Tell them the truth – you’re thinking about getting into the field, and you want to know whether or not there’s a need for a new player. You can, if you feel comfortable with it, reach out to your potential competitors for advice on entering the field. Don’t expect, however, that they will be forthcoming with valuable information, unless it is to discourage your entrepreneurial spirit. Many company owners started out as employees for other companies, but more than likely the idea to go into business for themselves occurred to them after they were on the job for awhile. You could take this route - get a job with the number one impound company in town, learn the ropes, and head off on your own - but don’t expect your former employer to jump for joy the first time you take away one of his accounts. Perhaps a more honorable approach would be to propose some kind of partnership or franchise opportunity in a different market, after you’ve been under his wing long enough to learn how to fly properly. If you talk to enough people, you’ll get a sense of how entrenched your competition is, and how difficult it will be to take market share away from them. This is also an excellent way to develop sales leads without the pressure of giving an actual sales pitch. You will be meeting potential customers without trying to make a sale – something that will likely put them at ease and get them to talk freely about what you can do later to help them, which is the whole point of being in business in the first place. You might find that the market is untapped - perhaps no towing companies have their signs up all over town. In that case, your research can be finding out if property owners and managers have parking problems that require solutions. It’s market research – if multi-billion-dollar mega-corporations do it, why shouldn’t you? Perhaps you’re looking into this because you’ve already been approached by property owners or managers to provide the service to them. Don’t let those parties be your only source for research information. Get out into the community and talk to people. Call local media outlets and ask them if there has been any media coverage of the industry. If there has, it has likely been negative – it’s not often that the local news reporter breaks a story about the fine job that the tow truck driver did when he impounded the single mom’s car from the apartment complex fire lane. Knowing what the local citizens have been hearing and reading about this type of work can help you craft your marketing strategy later. Municipal Contracts Towing for local law enforcement agencies is a good business avenue to combine with private property impound towing, provided that contract specifications do not prevent it. Find out the equipment, property, insurance, and personnel requirements. Both municipal and private property impound work require property for vehicle storage, and you want to double up as much as possible on income sources for any particular expense you will incur. Start with the city in which your business is, or will be, established, and then check with county and state agencies as well. Read through contracts thoroughly, so that there are no surprises when you qualify. You might decide that the legal and contractual requirements of municipal work are more of a burden than you are willing to bear right now. While you’re at City Hall, expand your research into the legal requirements for performing private property impounds. Although towing from private property is not typically work that is administered by local law enforcement, there are certainly laws regulating it, and many municipalities have become increasingly involved in licensing and regulating this type of work. At the very least, there is some set procedure for reporting impound tows to the local agency, and you need to now what that is. There is likely a records department taking that information, so that some confused vehicle owner does not file a stolen vehicle report after their SUV gets towed away from a no-parking zone. Some municipalities have an inspection and regulation process that mirrors the registration for municipal towing—the only difference being that the municipal agency does not divvy up and dispatch the tows, or contract to a private dispatch firm that does. So you might be able to impound vehicles for any property owner in town, to whatever extent the property owner chooses, but your impound signs, equipment, storage property, business insurance, and personnel might have to meet the same standards as if you were doing municipal work. Your local municipal agency may even regulate the private property impound towing rates in your city or county. As we mentioned, you don’t want any surprises. You don’t want to find out, after your grand opening, after you impound 30 vehicles from the big empty lot next to the County Fairgrounds late in the evening on July 4th, and a television cameraman walks into your office the next morning, that you skipped the step of a required municipal inspection. That’s when things can get really ugly. Processing Unclaimed Vehicles If you impound vehicles, you are going to collect unclaimed vehicles. In some cases, up to 40% of your impound tows may go unclaimed. You must develop a smooth procedure for processing and disposing of these vehicles. It begins by immersing yourself in the local and state vehicle codes for your area. Somewhere in all of that legalese, there is at least one section covering possessory liens. Find it, read it, understand it, maybe pay a good lawyer to read it, understand it, and translate it, and then live by it. Do NOT do what the garage owner down the street tells you to do. Chances are, he is not going to be a credible representative for you in court when you’re hauled in for perceived chicanery. The basis of vehicle lien law is simple: when you impound a vehicle, you need to make a good faith effort within a reasonable period of time to find out who owns the vehicle and notify them that you have it, and how they can go about redeeming it. Every state has its own procedure, and they can be very sticky about following it to the letter of the law. Once you satisfy this notification requirement, after a given period of time passes, you can sell or dispose of the vehicle, and the new owner can secure a brand new title for the vehicle. With the high number of unclaimed vehicles, setting up a liquidation process is absolutely essential for the success of your business. Think about it: the day you impounded that car, you had already paid for the fuel, the truck payment, the insurance, the marketing expense it took you to get the account, and shortly thereafter probably the driver wages, and now you’re sitting on this “asset” for 30 or 60 or 90 days, or however long it takes before you can open up that space in your storage lot. And you’re not earning any interest. You need to maximize the return (translation: minimize the loss), and quickly. Vehicle auctions have become a very popular solution, mostly because they work. Know going in what it is going to take to establish, market, and run a successful vehicle auction. Go to as many different ones as you can and see how they are run. If there are a lot of bidders there, emulate what you see. Business Plan Finally, have your business plan in place before you embark on your journey. Have the company structure devised, the HR system described in detail, the marketing strategies identified, an introductory budget completed, and a plan for long-term growth outlined. If you’re already in business and expanding into this new area of work, it’s going to change your business, so have the transition/expansion plan drawn up. We all know how a goal is much more likely to be reached when it’s written down, but it is just as valuable to have that owner’s manual to refer back to when we get off track. Following these steps will put you miles ahead of the majority of companies entering this market, and it might put you a few tenths of a mile ahead of the companies that are already there. It will also save you time and suffering later when you engage in and develop the business habit of preventing fires, rather than putting them out.

Publication List
Using a screen reader? Click Here