How do I tell how much a towing company relies on one roadside assistance program?

Start with a source-by-source breakdown of calls and income. The seller’s dispatch system or invoices should show where each job came from. Look at the trend as well as the share: is the program’s portion growing, steady or shrinking? A rising share can mean the shop is getting better at winning that work, or that it has stopped finding other work.

Then read the agreement. Check who can end it and on what notice, how rates are set and revised, how often the program audits performance and what response times are required. Programs often rank providers by speed and customer scores, so ask to see the shop’s latest ratings. Your lawyer should check whether the agreement can pass to a buyer or needs approval first.

Finally, test the alternatives. What other sources exist, such as police rotation, garages, insurers, property managers and walk-in customers? How quickly could they make up a gap? Ask your accountant to model the business without the program, and check that the remaining income still covers the costs and any loan you plan to take. Ask also how the program pays and how quickly. Slow payment from a large source can strain cash even when the work is steady, and a buyer should see that in the receivables.

Key takeaways

• Break down calls and income by source over several years.
• Read the program agreement for notice, rates and assignment.
• Model the business without that program before you commit.