You have a comfortable operation: several trucks running tows for local shops and perhaps a motor club, office staff taking calls during business hours, an answering service handling the phones after hours, and a group of seasoned drivers who have helped give your business a good name in the community. Every so often, a local business owner calls you and asks you to remove an abandoned or improperly parked vehicle from his or her property. Your colleagues in the industry have told you how lucrative private property impound work can be, so you start thinking about expanding into that field.

Or perhaps you’re going into this with impound work as your primary focus. You’re starting small, one or two trucks, and you’re going to specialize in serving property owners and municipal agencies.

How do you get started?

Private property impound work is a specialized field, and there are many things to keep in mind if you’re thinking about devoting most or part of your business to this part of the industry. Chances are, if you are in an urban or suburban market, the work is there. This is a market created by the illegal parker, of which there never seems to be a shortage.

Most of the following is best tackled in preparation to diving into this type of work. Some of them can be developed and refined over time, but preparation will serve you best. This article will serve as a general overview of how to start and operate an impound business, and in the following months we’ll tackle each of these subjects individually and in greater detail.

Research

First, is there sufficient reason for you to pursue this market segment? Will it be profitable, or not worth the headache? Do you owe it to your community to take on the work, and take it away from unsavory competitors?

Are there specific municipal or legal requirements in your area for performing impound work? Are there licensing requirements? Are there local municipal agencies regulating the local impound industry? Start with the city in which your business is established, and check with county and state agencies as well. You may find that the legal requirements of the work are more of a burden than you are willing to bear right now.

Who is your competition? How entrenched are they, and what will it take to secure the market share that you will require to be successful? Related to the issue of municipal requirements, are there contracts for impound work that are controlled by municipal agencies, and what are the conditions required to apply for those contracts?

If you have not already researched the requirements for processing a possessory lien on an unclaimed vehicle, look it up the state vehicle code and make sure you understand it.

Property

One specific requirement for impound work is a vehicle storage facility. You are going to need at least one impound lot that can be separated from the rest of your business, and it must be at least large enough to store the number of vehicles you anticipate impounding. In the private property impound business, you can assume that approximately 40% of the vehicles you impound will go unclaimed. Based on your goals, can your facility hold that many vehicles, plus the constant flow of vehicles being claimed, for the duration necessary to liquidate them?

The nature of the impound business requires a secure facility that protects you from a resourceful vehicle owner, and that protects impounded vehicles from incidental damage. Even the most careless vehicle owner has been known to do a white-glove inspection of his vehicle upon redemption.

Equipment

If you already have trucks, almost any towing equipment can be adapted to impound work, but here are some things to keep in mind:

• Most vehicles impounded from private property are passenger vehicles.
• Especially in urban areas, many private parking facilities are garages.
• Most impound tows must be completed without vehicle keys, or even access to the vehicle interior.
• Time is often of the essence when performing impounds, not to mention being inconspicuous.

Given these factors, a light-duty self-loader is the most versatile unit for private property impound. There will be times when a carrier or a mediumduty truck is necessary as well, so it is certainly an advantage to have a diverse fleet. Tow dollies and/or vehicle positioning devices will almost certainly be needed on a regular basis. Space may be an issue at many properties you service, so a short wheel-base truck will often be a valuable asset.

Unclaimed Vehicle Liquidation

Now that you know all of the legal requirements for processing possessory liens, do you have your vehicle processing procedure in place? Are you handling the lien process in-house, or out-sourcing it? How are you disposing of the vehicles after the paperwork is complete? Many impound operations find that a vehicle auction can be one of the most profitable parts of their business. You might want to invest in staff that can prep vehicles for auction.

Paperwork

It might seem insignificant, but specialized invoices for impound work make it easier for your staff to manage the process. More recording of information is required. In most cases, reporting of vehicle information to a local municipal records agency is required, if only to let the vehicle owner know what happened to their car when they call the police, thinking it might be stolen. An impound tow invoice should include complete vehicle information, including the VIN, and an itemized list of charges, including separation of special equipment and storage fees. A vehicle condition report is also advisable, including an itemization of vehicle contents visible prior to tow.

Specialized Personnel

Impound work is a specialized field, and your drivers and dispatchers must be trained accordingly. Your customer base is split into two groups: property owners and vehicle owners. Maintaining a customer database is crucial for your dispatchers and call-takers to keep that customer base happy, and to ensure that proper authorization is verified. Each account should have predetermined personnel authorized to request impounds, with a secondary method of verification, such as an authorization code. Rest assured, someone at one of your accounts WILL call trying to have a vehicle taken away, thinking that they have authorization to do so when they don’t. And rest assured, an angry vehicle owner WILL call and try to exact revenge on a business owner or residential manager. It is your job to make sure the requesting individual has proper authorization.

Both dispatchers and drivers should be trained in conflict resolution. When interacting with the owner of an impounded vehicle, almost anything can happen. Are your dispatchers prepared to be screamed at over the phone, and do they know how to handle the screaming? Are your drivers prepared to be physically threatened while hooking up a vehicle, and do they know the proper methods of dealing with that?

Sales Strategy

This is a major consideration, and one that often gets overlooked. As with any business, the work doesn’t come to you - you have to go get it. Wouldn’t it be nice if you could get a business phone number, and it immediately started ringing with customers eager to use your business? For most of us, that’s not how it works.

Most impound regulations require signs to be posted at properties where impounds are occurring. You will want to locate a sign provider who can make generic signs in bulk at a low cost, as well as custom signs that are high quality. Providing, posting, and maintaining impound signs is a service that can make or break your business. If your competition is smart, they will drive around town looking for signs with your company’s name on them that are damaged, falling down, decaying, and marked with graffiti. When they find one, they will go into that business and offer to change it out. With THEIR OWN. Once your house is in order, this might be a worthwhile strategy for you as well.

Do you have an account representative who specifically serves your impound accounts? This salesperson is tasked with soliciting new business, but also with keeping your current customers happy. Just like with any other customer base, it’s best if your customer can match up your name with a face. Your account reps should be on a first name basis with personnel at most of your accounts, if possible. It is their job to represent the account to your business. Crazy things are going to happen while doing impounds. Vehicle owners are going to claim that your drivers are unscrupulous, and the property owner or manager is sometimes going to believe them. The account is going to make a mistake and have the wrong vehicle towed. Are you prepared to deal with these situations? The account rep is the first line of defense in protecting your company’s good name, and must be well-trained in damage control.

What type of agreement do you enter with the property owner? It is best to have a written agreement that defines the location of the property, including property boundaries, as well as the nature of the work you will be performing. This agreement is also an excellent place to note the personnel authorized to request tows. This means it will need to be updated regularly. It also should be an agreement that can be cancelled at any time by either party. Impound company owners have been known to make property owners sign one-year contracts. Shouldn’t you be earning their business every time you provide the service? Shouldn’t they be able to take your signs down if you don’t satisfy them as a customer?

These are all housekeeping items. Then you get down to the real question: What separates you from your competition, and how do you market that difference? Why should any property owner want your signs on their property? There is almost always potential to expand your impound business, and that doesn’t just mean taking business away from your competitor. For every property with impound signs posted, there are properties without signs, owned or managed by individuals or groups who might not understand how illegal parkers damage their business or put them at risk. There are often untapped opportunities at existing accounts - you might be towing away one abandoned vehicle per year for a business owner who is completely unaware of a situation at his or her property that could be improved. Also, the nature of property ownership lends itself extremely well to referral-based sales. If you are doing a great job for a prominent apartment complex, would their property management company want your signs up at all of their properties?

Business associations are also an excellent way to market your business. Housing associations and chambers of commerce are great venues at which to showcase your unique service.

Degree of Separation
A final consideration, as you explore this new venture, is to think about how it will impact other parts of your business, especially if you have a successful commercial towing operation that serves shops, motor clubs, and vehicle owners. You many have built up a good name in the community with the service you provide and corporate good will. Unfortunately, in the world of impounds, there is negative publicity. Even if you are performing impound work legally and ethically, and working hard to minimize the negative impact on vehicle owners, someone is going to dislike you. Impounded vehicle owners can be very emotional, and they might have a hard time calling you the next time they need their car towed to a shop. One solution is to separate the two parts of your business, even going so far as to give the impound division a different company name. It’s not deceptive, if you’re running a reputable operation, and the unique requirements of impound towing might be better addressed by having equipment and personnel specifically designated to perform that work.