Towing the line
His dad taught him the ropes, and now one entrepreneur is making inroads in the auto-towing business.
From the pages of In Business magazine.
After growing up around his dad’s Fox Valley business, Van’s Towing, John Van, 24, managing partner of Finish Line Towing in Madison, says he appreciated his dad’s hard work, but never dreamed of filling his shoes.
Instead, John attended UW–Stevens Point where he started two successful businesses before graduating with a finance degree in 2016.
“When I was a junior in college, I met Keaton Schultz, who was much younger than me, and we’d just hang out and think of ways to create businesses and make money,” Van recalls. The fast friends and future business partners began contacting area influencers, asking for business advice, and found them more than willing to oblige. Before long their network of influencers expanded.
One contact, in fact, floated a private loan so the duo could purchase a home, the first of several they’d buy in a real estate rental business. “At one point, Keaton and I had about 16 houses or duplexes together,” Van states.
Why stop there? Next up was a credit card-processing startup. “Everyone’s got credit cards,” Van says, “and it’s a good business because when the economy goes down, credit card usage goes up.” That company is also successful, with one unnamed client in particular processing about $60 million a year through their business. “It’s kind of crazy.”
After graduation, Van worked for a short while for a national financial advising firm but quickly decided that a desk job wasn’t for him, so he did what he vowed he’d never do: he returned to the family towing business, finally realizing the wealth of knowledge he’d already absorbed from his dad, uncle, brother, and a family hobby — stock-car racing.
Van worked for his brother, Nick, who owned his own towing company, and later met Kim Schmeling, now a partner who owns a similar business in Milwaukee. Nick and Kim’s businesses were preferred providers for AAA of Wisconsin, but Van says they learned there was no such exclusive arrangement in Madison. They scheduled a meeting with AAA on Madison’s west side to make their case, fully prepared for months and months of negotiations to secure a deal.
It took just three.
“My brother is 29 and I’m 24,” Van says. “I think AAA liked the fact that we’re young. There probably aren’t many young people who want to tow cars for a living, and I think they recognized that. They’re trying to attract members, too.”
The deal meant he would have to relocate to Madison, something he’d never considered before. “I read all the time about entrepreneurs losing everything by age 25 or 30, but by 35 they’re millionaires, so I decided this was the time to take that risk.”
Van launched Finish Line Towing in Madison in October 2017 with two employees, two tow trucks, and two light-service vans used for tire changes, lockouts, and mobile battery service.
A year later, the company has 22 employees including four dispatchers, and a fleet of eight tow trucks and seven light-service vehicles. The crew averages 80 to 90 service calls each day with the majority (60%) being for roadside service. In fact, Finish Line is on track to reach 36,000 calls this coming year, Van says.
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As AAA’s preferred provider in Dane County, Finish Line Towing responds almost exclusively to AAA member calls for service from roughly Sun Prairie to Stoughton to Cross Plains. As a result, the business is profitable and everyone’s getting paid.
But managing response time is the most stressful part of the job, Van explains.
“If I had 1,000 tow trucks we’d still be short. On one hand, AAA members pay for the service and expect a quicker response, but on the other, we’re not the police on patrol all the time. We might even be a little over-staffed, but we’ll always buy trucks and hire people. Right now our average response time is 35 minutes. I’d like to get it down to 30, but that’s hard to do.”
Insurance, he adds, is pricey due to the high-risk nature of the business, and he struggles with asking his drivers to reach callers quickly while encouraging them not to speed. “There aren’t a lot of businesses held to that standard,” he says. “Maybe Jimmy John’s.”
With three vastly different businesses clipping along, Van’s learned plenty of lessons. In real estate, for example, he flipped a house once, and would never do it again. “I learned a ton, but it’s like going to the casino, and I’m not a gambler.” He describes himself as a calculated risk-taker. “I think gambling is a tax on people that aren’t good at math. I’m too practical, but I’m riskier with money and business.”
He still owns a few rental homes with Schultz in central Wisconsin, whose business is thriving. “He has maybe 40 or 50 houses now and he’s only 21!” Van reports.
Back in Madison, he’d eventually like to assemble a dependable A-team capable of running Finish Line Towing in Madison so he can move on to something new. “I’d do this all over again,” Van insists, “even if it means moving to another state. I don’t see cars going away.”
What about driverless cars?
Van chuckles. “In my opinion, driverless cars just mean we’re a little closer to driverless tow trucks.”
Finish Line Towing LLC
flt-wi.com
(608) 807-6966
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