I Quit My Full-Time Job & Launched A $5M/Year Towing & Auto Repair Business
Hello! Who are you and what business did you start?
My name is Johnny Van, I am the President and Owner of Finish Line Towing & Auto Repair. I have always been interested in cars, trucks, motorcycles, snowmobiles… you name it. My father was a major contributor to my love for automobiles, he started a towing company when I was a child. He always had about 2 or 3 trucks while working a full-time job also and he did this for around 25 years.
FLT is Wisconsin's largest provider of roadside assistance, we have around 40-50 trucks in the lower half of Wisconsin and we run all across the midwest depending on the situation.
Our services have expanded in the past couple of years, we provide lockouts, jumpstarts, tire changes, battery installs, contract towing, private property parking lot management, police accident response, and of course roadside emergency towing.
We have found a niche with special contracts that I cannot speak on, but our dedication to customer service, effective dispatching, and clean service has been the major driving force behind our success.
FLT does around $5,000,000 in sales a year between all our services and we are focusing on growing to other markets in Wisconsin and soon Illinois.
What's your backstory and how did you come up with the idea?
I was born and raised in Appleton, WI, and had great role models in my mother and father. My mom taught me the value of being honest and keeping calm in adverse situations. My dad had taught me the value of a dollar and what it takes to make that dollar.
When I was a child, I remember my dad always hustling to provide for his family. This meant long hours and hard work, with a little bit of “luck.” I believe you make your luck in life and my parents did an amazing job teaching me this.
I was never a “straight A” student, I graduated high school with a C average and had a difficult decision to make when I was 18. I had the choice to either go to college, go to the military, or take over my dad’s business. At that time, I hated the idea of taking over my dad's business, mainly because I wanted to get out and see the world. I figured that if I stuck with the same thing my dad did for years, I would never get out of our small town and the thought of that scared me.
So, I decided to go the college route. I attended the University of Wisconsin - Stevens Point originally to be a history teacher. I remember sitting down with a counselor before college started to pick my classes and he shared with me how much money teachers typically make in a year… that's when I changed my mind in about 5 minutes to enroll in business school.
Although business school was not necessary for what I do today, my key takeaway was the ability to meet, conversate, and create long-lasting relationships with people… which is a lifelong lesson that has gotten me to where I am today.
I graduated from college in 2016 with a 3.5 GPA (took this much more seriously than high school) and got a random job as an insurance adjuster. This job at the time paid around $50,000 a year and that seemed like a lot of money back then.
Little did I know, I was about to learn a hard lesson about what the corporate world is really like, especially as an entry-level employee. I trained for this job for around six months, then actually worked for around 4 months.
One day, I misread a memo the night before and had thought that Thursday was a “casual day”. The casual day is three or four days a month when the higher-ups decided to allow everyone in the office to wear jeans, hoodies, and tennis shoes. The typical dress code was business, so in an office of around 600 people, everyone took advantage of these days and wore comfortable clothes.
As it turns out, I had worn casual clothes on a day I was not supposed to. In a logical mindset, you would think this was not a big deal… but this is corporate America and logic is not the strong suit all the time. My supervisor at the time came to my desk and demanded that I change clothes. I lived 40 minutes away from the office, so I explained that this was not an easy task… his response was to “figure it out”. My version of figuring it out was driving to Walmart and buying some pants, shoes, and a shirt.
As you can imagine, this did not sit with me well, and I could not get past the illogical nonsense this meant for the big picture of the business, I put my two weeks in that same day.
My brother and I had been talking about an opportunity that had arisen in the Madison, WI area. There was a large insurance company looking for a provider, but it would require massive amounts of horsepower to get it done. I knew I could get it done and now that I didn’t have a job, I had nothing else to lose.
We bought trucks, hired a few employees, and within 4 months FLT was created with my brother and me. The plan was for me to operate the business and move to Madison and that is what I did. I lived in a friend's basement for around 8 months, paying rent and working 16 hours a day. I ran calls, dispatched, did accounting, paid bills, maintained the trucks, etc.
We took a massive risk at this time because we did not have much money and had to loan almost everything to start the business. I did not take a paycheck for around 6 months. I knew this was the pay I needed to go, I cannot recall exactly why, but I knew that it would pay off as long as I kept my nose to the grindstone.
Take us through the process of designing, and prototyping, your first product.
Our startup costs have changed over the years, but when I started the business we invested as little as possible. We started with two service vans, which costs around $12,000 at the time and maybe around $1,500 a piece to outfit with tools, lights, and graphics. We also bought two brand new tow trucks, these range depending on what you buy… but we bought ours for around $85,000 a piece at the time, then another $2,000 in equipment and graphics.
I knew a friend, so I did not have to pay anyone to park my trucks while I was not using them and I also got fuel cards right away from WEX, which saved us $0.05 per gallon when used. They also help you track MPG and driver usage.
Insurance is the worst part of this deal, a tow truck can cost you anywhere from $1000 a month - $5000 a month in liability insurance depending on a lot of different factors. Workers comp is never good starting out with a new business, I won't dive into the details of mod factors or premiums… but it's good to make sure your guys dont get hurt!
Our business is strictly service-based, so the concept itself was very simple… but where most guys go wrong is not executing. I found success in focusing on the details earlier on in our startup. This means focusing on every customer service call as if we were not going to get any more after that. The old saying “treat others how you would like to be treated” is 100% true in my business. Wouldn’t you appreciate a confirmation call from your service driver? Wouldn’t you appreciate it if he asked you if you are safe?
These are the things we focused on, showing our concern for the customer. Small simple things that we all know how to do act like rocket fuel for your service business when executed properly. Does your employee look clean? Is he showing up to a service call with a cigarette in his mouth? These small things matter.
I did not see a massive change in growth until I started to get referrals from local shops, this took about 5-6 months of busting my ass to gain the trust of these businesses.
Pricing our business is less difficult than some make it seem, we have fixed costs and variable costs. Okay, so what are your fixed costs? Labor, Insurance, COGS, phone bill, internet, rent… etc add these up, and figure out what it costs you a month in fixed costs to run your business. I typically will run things on a monthly basis, because things change for me monthly. I also run cash basis accounting, so this is necessary for most situations.
Once you have your fixed costs, figure out a RANGE for your variable costs. What do you think gas will cost you? How many miles are you driving every day? How many hours is your employee working usually?
I am writing this as if you are going to try and figure this out for yourself, so you need to be prepared to ask yourself these questions in order to create proper projections. It is always best to be over-conservative. So, if you spent $30,000 on fuel last month, but your heading into the busy season, maybe you should plan on spending $45,000 this coming month… just an example. This is how I planned my business out, I still use these methods today, but with better data. We now have GPS trackers in every truck that tells us valuable information.
Things like dropping off business cards at local shops, doing Facebook giveaways, growing our SEO, growing our google maps presence, and creating relationships with similar businesses. This was very difficult at the time and we did not have many friends starting out, no one likes to see a new face in town.
Describe the process of launching the business.
I remember launching FLT and I remember running our very first call. There had been many motivations to get that first call, but it mainly started with relationships with contracts prior. Relationships = money. There is a direct correlation and any businessman/woman would tell you the same thing. Without giving away all my secrets, the main point is that it pays to make friends and have lasting relationships.
It was a very exciting time for me as I was learning things I did not understand prior. In the four months before launch, I found two brand new trucks in Chicago, and financed them 100% (a big risk I would never do again).
I remember hiring my first employee and I did not have an office, so I met him at culvers in town. He still works for me today. Since we had a contract with a proven amount of calls, we knew there would be a good base to start with and at least the bills would be paid, but it was up to me to expand the business as fast as possible in order to gain and retain new customers in the area.
I did not see a massive change in growth until I started to get referrals from local shops, this took about 5-6 months of busting my ass to gain the trust of these businesses. I shared my story with as many people as I could and I still had the “young entrepreneur” look to many people around town… I think this can play to your benefit if you use it correctly.
Since launch, what has worked to attract and retain customers?
You can fail 100 times at things and continue on to be a major success.
Since a lot of our work is contract work, we have found the best way to grow was to prove to our current contracts that we have what it takes to get the job done at a very high level. This meant putting in countless hours, ensuring communication was great at all times and maintaining a clean appearance out on the street (uniforms, clean trucks, proper education).
The more we stuck to this formula, the more we grew. More and more opportunities came our way and we jumped on every single one possible. I still do this today, I say yes to almost anything and then figure it out later. It has never failed me yet. Sure, this can put a massive amount of stress on you at times, but taking action on these opportunities is what separates success stories from failures.
We do not pay for any advertisements, we have found that google reviews are a massive help in our industry. We have more reviews on google than anyone else in the state (towing companies) and the reason for this is our constant focus on asking the customer for a review. All you need to do is ask… as long as the service was good, most people will do it.
What won’t work (for my business) is traditional email marketing or basic “sales” strategies online. When you call us, you are stressed out and need help now from a nice group of people that answer the phone. Our customers are typically not interested in making the experience longer than it needs to be, and as human beings, all we need these days are great reviews by others and some nice photos.
I sponsor and promote as many non-profits and organizations as I can, but I don’t do this for a marketing aspect. I do this because I enjoy doing it with my wife. Some will say every time you give, you get it back but I don’t find that to be true when your intentions are off. Give back, but not because you expect a return.
We’ve been hard-pressed to find a more active Facebook/Instagram page in our industry than ourselves, a lot of companies will think this is a waste of time - but not us. We believe in a good clean image and posting to the web for free is the best way to hold that image up.
How are you doing today and what does the future look like?
FLT continues to be a profitable business, regardless of rising costs and massive changes in the marketplace. I have bought out my partner in the past two years, this has boosted profit and has given me the ability to use this money to hire top-level employees, purchase more trucks, purchase real estate in two different markets, and in turn boost sales.
I am looking to hire an operations manager in 2023, either internally or externally, and this will allow me to focus more on working on the business, rather than working in it. I am still not to the point where I can be completely hands-off, but it is getting closer and closer as we refine our processes and systems.
We will soon be in another major market south of Milwaukee and we are in conversation with multiple businesses for sale. My major goal for FLT is to have a full-service towing operation in every major market in Wisconsin before moving to another state, there are a few left to go but the opportunity is there as long as I can find people that can help me run day-to-day operations.
I don’t need to share my projections or gross revenues, but with some basic math, you should be able to figure it out. We are hoping to have a valuation of $10m-15m by the time we reach year 10.
Through starting the business, have you learned anything particularly helpful or advantageous?
I have learned so many things in this business that it would be impossible to nail down a list, but I would say number one is TAKE ACTION. You can fail 100 times at things and continue on to be a major success.
Most people's issue in business is that they never took a chance, so instead of being the guy that talks about all his ideas… be the person that DOES all his ideas.
The sad truth is that most businesses are run by people that are not special, not smart, not hard-working… but they just made a decision one day to take action.
What platform/tools do you use for your business?
We use many tools for our business:
- Quickbooks is our current book keeping software
- ADP is our payroll software (still requires in-housework)
- Towbook is our dispatching software that is specifically made for towing companies. Think of Towbook as our “POS” it tracks payments, and statements calculates bills automatically, and will also send them to the person that needs to pay them.
- Dropbox is a major help in the company and we focus on keeping everything digital and locked by a password. This is a cheap cloud-based file system that we could not operate without.
Other than that, our processes and procedures are all handmade by me. I have difficulty training my employees on this at times, but we have gotten better as the years go on and I have passed on some of those responsibilities to others I can hold accountable.
What have been the most influential books, podcasts, or other resources?
Education of Millionaires -Michael Ellsberg… This book first got me into thinking big and understanding what working for money will not make you rich. You need to own something.
Extreme Ownership - Jocko Willink… This is especially huge for top-level employees in your business, you need to look at everything as YOUR PROBLEM. Did an employee not work out? Okay, you can say this is the employee's fault or you can take extreme ownership and ask your self “why did I hire them? What did I not see”. Turn the finger back at yourself and correct it for next time.
E-Myth -Michael E. Gerber… You need to systematize your business if you want it to run for you, instead of it running you. This book is all about turning your business into a machine that doesn't need you.
Advice for other entrepreneurs who want to get started or are just starting out?
Today’s internet society has allowed for an influx of posers, fakers, liars, and big talkers. It has become so difficult to sift through who is real and who is fake on social media, particularly when it comes to motivational speakers and entrepreneurs.
Understand that “grinding” or “working hard” isn’t something to talk about and be proud of, lose that mentality. No one cares about how hard you work. If a guy finds out how to make $1m but does 20% of the work that a guy making $1.5m makes… it's way more badass to be the $1m guy.
I cannot stand the amount of glamour put out there via memes and videos about working 14-hour days and weekends… that's all bologna… get results… that's what the market cares about.
Are you looking to hire for certain positions right now?
2023 will be a new year for us and present new opportunities, we will be looking for a GM to hire in 2023 that will run most of FLT.
I am also going to be searching for a key accounts manager in the coming months, this is a position that will create relationships and increase sales for the company.
Where can we go to learn more?
- Website
- Instgram
- Email me at [email protected]
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