Owned and Operated Podcast Episode #186: "Turning Tow Trucks Into Business Success"

Host: Jack Carr
Guest: Matt Saskins, Owner of East Coast Towing
Release Date: April 15, 2025

1. Guest Introduction: Matt Saskins and His Background

The episode features Matt Saskins, a seasoned professional transitioning from the technology sector into the home services industry by acquiring and growing a towing business. Matt shares his extensive experience in technical sales, sales leadership, general management, and executive roles within global enterprises, service providers, and private equity-backed startups.

Matt Saskins [00:00]: "This business is not rocket science...This is a 50% gross margin business and these are 20% EBITDA margin businesses when properly run."

2. Transitioning to the Towing Industry

Matt explains his transition from real estate to the towing industry, motivated by an unsolicited offer that prompted him to sell his real estate portfolio during the COVID-19 pandemic. This led him and his wife to explore opportunities in owning an operating business, ultimately focusing on towing due to its fragmented market and growth potential.

Matt Saskins [05:34]: "We were broadly looking for something that was kind of in the million dollar EBIT or larger range because...I don't have investors, it's just us."

3. Understanding the Towing Industry: Consensual vs. Non-Consensual Towing

A significant portion of the discussion delves into the two primary segments of the towing industry:

• Non-Consensual Towing: Involves impounding vehicles from private properties, illegal parking, and repossessions. This segment requires drivers who operate with authority to remove vehicles without direct consent from the vehicle owner.

• Consensual Towing: Entails assisting individuals and businesses by moving broken-down vehicles, relocating equipment, and accident recovery. This segment focuses on customer service and requires drivers who are skilled and prefer consensual operations.

Matt Saskins [09:07]: "There is consensual towing and there is non consensual towing. Non consensual towing is kind of what everyone... Private property impound or repo of vehicles."

4. Acquisition Strategy and Initial Operations

Matt discusses his meticulous approach to acquiring a towing business. After evaluating two potential acquisitions in Raleigh, he chose East Coast Towing due to its solid operational foundation and experienced management team. Post-acquisition, Matt focused on stabilizing the business by emphasizing safety, implementing standardized processes, and enhancing marketing strategies.

Matt Saskins [11:51]: "This business is not rocket science. Like, this is not a particularly complicated business."

5. Operational Excellence and Team Development

Central to Matt's success is his focus on fostering a competent and motivated team. By promoting internal talent into supervisory roles, he ensured that the operational challenges were addressed effectively. Matt emphasizes the importance of scalable growth and maintaining high standards for customer service and employee benefits.

Matt Saskins [12:36]: "Our operators are really well paid, highly skilled, tons of experience, especially the guys doing heavy towing."

6. Marketing Strategies: Navigating SEO and Paid Advertising

Matt outlines his marketing strategies, which are tailored to the diverse customer base of East Coast Towing. Key customer segments include individual consumers, commercial fleets, and municipalities. He highlights the effectiveness of SEO and Google optimization for attracting individual and commercial clients, while pointing out the challenges of paid advertising for light-duty towing due to intense competition and low return on ad spend (ROAS).

Matt Saskins [15:42]: "We've got individual consumers... commercial customers... and municipalities... CallRail helps us track phone call sources."

7. Growth Through Strategic Acquisitions

Expanding beyond East Coast Towing, Matt shares his strategy of acquiring adjacent businesses such as oversized transport and mobile fleet service companies. These acquisitions complement the existing towing operations by offering specialized services and expanding the geographical footprint.

Matt Saskins [22:12]: "We spent the first six to 12 months just letting dust settle... Started experimenting with marketing spend..."

8. Challenges in Market Valuation and Industry Fragmentation

A critical discussion point revolves around the challenges of valuing towing businesses in a fragmented market. Matt critiques the inflated valuations driven by owners seeking to recover asset values and personal gains, which often exceed the sustainable EBITDA multiples prevalent in the industry. He warns against overpaying based on asset-heavy business models that do not align with actual operational profitability.

Matt Saskins [40:27]: "Call it a million and a half dollars... There's finally... Guardian Fleet Services... they're only doing deals larger than 10 million EV."

9. Future Plans and Sustainable Growth

Looking ahead, Matt plans to consolidate existing operations, streamline debt structures, and cautiously pursue further acquisitions only when the current business is stable and the management team is prepared for scalable growth. His approach emphasizes sustainable expansion over aggressive scaling to avoid operational inefficiencies and financial strain.

Matt Saskins [33:02]: "The plan is to let the dust settle and see how this year shakes out... I'm in no rush to do things and I'd much rather do it in a scalable manner."

10. Advice and Industry Insights

Matt offers valuable advice to aspiring towing business owners, stressing the importance of understanding operational intricacies, maintaining a skilled workforce, and adopting data-driven marketing strategies. He also highlights the benefits of networking and consulting with industry experts to navigate the complexities of business acquisitions and management.

Matt Saskins [48:23]: "Always happy to hop on the phone and talk to folks about the industry... I've learned something selfishly out of all those as well."

Notable Quotes:

• Matt Saskins [00:00]: "This business is not rocket science...This is a 50% gross margin business and these are 20% EBITDA margin businesses when properly run."

• Matt Saskins [09:07]: "There is consensual towing and there is non consensual towing..."

• Matt Saskins [15:42]: "We've got individual consumers... commercial customers... and municipalities..."

• Matt Saskins [40:27]: "Call it a million and a half dollars... There's finally... Guardian Fleet Services..."

Conclusion

Episode #186 of "Owned and Operated" provides an in-depth exploration of the towing industry's dynamics, from acquisition to operational management and strategic growth. Matt Saskins offers a blend of practical insights and strategic foresight, making it an invaluable resource for entrepreneurs looking to navigate and succeed in the home services sector.

For more information and resources discussed in this episode, visit www.ownedandoperated.com.