With the increasing population, the number of vehicles on the road is also increasing. And, with the expanding number of vehicles, the demand for Roadside Assistance is also increasing day by day. Starting a roadside assistance business will be profitable; however, it needs a substantial amount of initial investment. Before starting the business, it is necessary to understand the cost to start a roadside assistance business and the capital required for the business’s success.
In this article, we have provided complete information about roadside assistance business costs and essential startup expenses that you need to consider before launching roadside assistance. So, without any delay, let’s explore the article and find out, “How much does it cost to start a roadside assistance business?”
Scope of Roadside Assistance Business in the Future
According to Custom Market Insights, the roadside assistance industry is not just growing; it’s on a solid upward trajectory. The revenue is projected to increase by 4.1% in 2022, reaching approximately USD 34.8 billion in the future. This growth trend paints a promising future for potential entrepreneurs in this field, making it an attractive business opportunity.
Cost of Building a Roadside Assistance App
The cost to start a roadside assistance business and develop an app varies depending on various factors, such as the application platform (iOS, Android, or both), UI/UX design, company location, complexity level, hourly rate of developers, and company size. However, the rough budget for developing the application for roadside assistance business cost with fundamental features generally starts from $45,000 to $60,000 for a single platform (iOS or Android). If you want to develop an application with advanced features and functionalities, it may cost approximately $65,000 to $1,20,000, including all cost factors.
- Native Apps (Android & iOS): $50k- $100k
- Cross Platform: $25k- $60k
- Web pages: $15k- $50k
- Hybrid apps: $10k- $150k
Roadside Assistance Business Cost For App: Company Size
Company size plays a vital role and affects the cost of starting a roadside assistance business app. Small-sized companies may charge less than large and medium-sized companies, but they may not be sure whether they will provide quality service. In contrast, large-sized companies provide high-quality service but may cost more than small and medium-sized companies. Neither more nor less medium-sized companies can give the desirable service by looking at your pocket.
Small-Size Company
- Manpower: 50-200
- Approx Cost: $15,000 to $ 25,000
Medium-Size Company
- Manpower: 200-500
- Approx Cost: $35,000 to $70,000
Large-Size Company
- Manpower: 1000+
- Approx Cost: $80,000 to $1,00,000
Cost To Start A Roadside Assistance Business: Developing Stage of App
If you think about how much does it costs to start a roadside assistance business, Here is a short breakdown of the cost to start a roadside assistance business app. The developing stage is the base of the development of any application. Let’s know about it.
- The Discovery/Strategy Stage and the Estimated Cost may start from $1,200 to $11,000 (with a timeline of 2-4 weeks)
- The Design Stage and the Estimated Cost may start from $2,500 to $10,000 (with a timeline of 3-4 weeks)
- Testing and Deployment Stageand the Estimated Cost may be <$5,000 (with a timeline of 2-4 weeks)
- The Development Stage and the Estimated Cost may start from $3,000 to $60,000 (with a timeline of 2-6 months)
How Much Does It Cost To Start A Roadside Assistance Business: Complexity Level
- Simple Complexity Level: If you need a simple design for your application with normal features, the cost to start a roadside assistance business app may range from $10,000 to $15,000.
- Medium Complexity Level: If you want some extra features than the usual features in your application, then the cost to start a roadside assistance business app may range from $20,000 to $30,000
- Complex or High Complexity Level: And if you want the advanced features and designs in your application, then the cost to start a roadside assistance business app may range from $32,000 to $55,000
Roadside Assistance Business Cost: As Per Team Expertise
Team and expertise play a vital role in calculating the cost of app development. There are three levels of expertise: low-level, mid-level, and high-level. Below is a short explanation of the expertise and their approximate hourly cost.
- Low-Level of Expertise Approximate hourly cost: $50 – $100
- Mid-level of Expertise Approximate hourly cost:$100 – $150
- High-level of Expertise Approximate hourly cost: $150 – $250+
Cost To Start A Roadside Assistance Business App: Geolocation
The company location is also a significant factor that affects the roadside assistance business cost. The development of applications varies from region to location for various reasons, such as the location’s standard rates, the local economy, taxes, etc.
Location India
Hourly Rate $20 – $40
Location United States
Hourly Rate $100 – $150
Location Canada
Hourly Rate $100 – $150
Location United Kingdom
Hourly Rate $80 – $120
Location Germany
Hourly Rate $70 – $100
Location France
Hourly Rate $70 – $100
Location Australia
Hourly Rate $70 – $110
How does the Roadside Assistance App help your business earn revenue?
- Advertisement Model: Offer the ads and advertisements in the app based on user location and needs. To display the ads, you may partner with related businesses like auto repair and car dealerships.
- Service Fees: This is one of the easiest models to earn money. It allows you to charge user fees for each service they book from the application, such as jumpstart, towing, tire change, and many other services. You may mention the price based on distance and service type.
- Commission: Partner with various service providers and deal with a booking fee percentage for the commission that they receive.
- Subscription Model: Users pay per month or annual fee to access a specific number of services or discounted rates.
- Freemium: Offers essential services for free, with premium features available for a fee.
Let’s explore the other necessary startup expenses to consider when launching a roadside assistance business.
- Establishment of a helpline service with essential technologies
- Purchasing of Towing vehicles and tools
- Leasing or purchasing property to store vehicles and tools
- Employee salaries and benefits, including roadside technicians and call center staff
- Insurance policies for liability and property damage
- Marketing and advertising expenses to attract and retain customers
- Purchase and installation of GPS tracking technology for Vehicles
- Legal consultation fees for drafting contracts and agreements with partner providers and clients
- Regulatory and license fees
Establishment Of A Helpline Service With Essential Technologies
Establishing a helpline with essential tools plays a vital role in starting a roadside business. If a customer faces any kind of problem, the helpline will provide quick and convenient services, which will help the business gain a reputation and revenue. The cost to start a roadside assistance business by establishing a call center depends on the technology and tools used.
The cost of the tools and technologies required for the helpline may range from $5,000 to $15,000. Vital tools and technology for a helpline center include telephony systems, computers, caller identification and tracking, call routing software, and customer relationship management software. Other costs include rent, utilities, and furniture. Depending on the location of the call center, the price of the office space may start from $1,000 to $5,000 monthly.
- Investment in technology and equipment: $5,000 to $15,000
- Salaries for call center staff: $10 to $15 per hour
- Training and hiring costs for call center staff: $15 to $18 per hour
- Office space rental, utilities, and furniture: $1,000 to $5,000 per month
- Outsourcing to reduce costs: $5,000 to $10,000 per month for a team of ten
At last, establishing a helpline service with the necessary technologies is an essential investment for a roadside assistance business.
Purchasing Of Towing Vehicles And Tools
Towing vehicles play a vital role and are an important factor affecting the roadside assistance business cost. The cost of purchasing towing vehicles and tools can vary depending on various factors, such as the age of the vehicle, brand, model, and quality of equipment needed. The approximate cost of a new towing vehicle may start from $30,000 to $100,000, depending on its size, features, and type. It may cost more if additional tools are included, such as winches and flatbed trailers.
Moreover, other essential tools include battery jump starters, lockout tools, tire-changing machines, and other specialized tools. The equipment cost to start a roadside assistance business may start from $3,000 to $10,000 for a basic set of tools and may increase with the addition of more equipment. Below are the equipment examples and their approximate cost.
- New tow truck: $70,000
- Used Tow truck: $20,000
- Battery Jumpstarter: $1,000
- Lockout tool kit: $500
- Tier changing machine: $4,500
Leasing Or Purchasing Property To Store Vehicles And Tools
The significant investment for any roadside assistance business is leasing or purchasing property to store the tools, types of equipment, and vehicles safely. The cost may vary from various factors for leasing, such as size, location, and property condition. The average cost of leasing a commercial property may start from $2,000 to $10,000, whereas purchasing a property for storage may begin from $5,00,000 to $5 million or more based on size and location.
Employee Salaries And Benefits, Including Roadside Technicians And Call Center Staff
Employee salary and benefits costs may vary depending on various factors, such as the company’s location, size, and the service it provides. The business is labor-intensive and needs experienced and skilled helpline center staff to provide top-quality service to users.
- Roadside technicians may be charged around $15 to $20 per hour. In addition to the salary, the company also provides some extra benefits such as health insurance, paid leave, and retirement plans.
- The average salary for help-line staff ranges from $12 to $15 per month, including incentives and bonuses based on sales performance and customer satisfaction.
Insurance Policies For Liability And Property Damage
It is very important to protect the business from potential damage or liabilities that may arise while giving customer service. The most common insurance policies for roadside assistance businesses include Property damage insurance and liability insurance.
- Property damage insurance: This insurance covers damage to a vehicle or property while providing customer service. It may cost around $1,000 to $2,500 per year.
- Liability insurance covers damage or injuries caused by a business’s employees or equipment while providing customer service. The cost may vary depending on various factors, such as the amount of coverage and the business size. It may start at $500 to $2,000 per year.
Marketing And Advertising Expenses To Attract And Retain Customers
One of the most effective ways to attract and retain customers for roadside assistance businesses is marketing and advertising. Small startups’ average yearly marketing cost may range from $5,000 to $10,000. It may also increase based on the business size, company location, and chosen marketing channels.
- Online Advertising
- Social Media Marketing
- Direct mail and print advertising
Purchase And Installation Of GPS Tracking Technology For Vehicles
The cost of buying and installing GPS tracking technology for a roadside assistance business may start from the count of hundreds to thousands of dollars based on the scope of services offered and the size of the fleet. GPS technology is very beneficial for both the company and its customers.
Legal Consultation Fees For Drafting Contracts And Agreements With Partner Providers And Clients
- Legal consultation fees may start from $100 to $300 per hour.
- The cost of drafting contracts and agreements with partner providers can range from $2,500 to $7,500.
- The cost of drafting contracts and agreements with clients can range from $1,000 to $2,500.
- Legal consultation fees are ongoing, as contracts and agreements may need to be updated or revised.
- Budget for potential legal disputes, which can cost $100 to $600 per hour for legal representation.
Conclusion
Starting a roadside assistance business requires a substantial initial investment. The necessary startups for starting a business include developing applications, buying vehicles and equipment and other establishments such as call centers with essential technologies, and purchasing or leasing property for vehicle and equipment storage. If done correctly with the right resources, business plan, and staff, investing in a roadside business may provide great returns. In this article, we have discussed all the essential app development expenses and other costs to start a roadside assistance business.
Hope, after reading this article, you have the answer to “How much does it cost to start a roadside assistance business?” and have a rough calculation in mind for starting the business. However, roadside assistance business costs are not exact; they may vary depending on various factors.
