Looking to start a small flight school

[F01LA]

Maybe we can repurpose a joke.. How do you get a small flight school running? Start with a large flight school.

Whatever you do, good luck and keep us posted! It would be nice to see a small-time operation like this succeed. If I was a student, I can tell you I'd prefer a 172 for a few bucks more.

 

[Clark1961]

Look at your airports uniform commercial standards policy. While they can't block you from opening another flight school, they certainly can come up with sets of rules that make it near impossible to do so. They can have requirements like:
- availability of a bathroom
- availability of a 'classroom'
- minimum square footage
- requirements to have on-site front desk during regular business hours
- requirements to carry certain types of insurance
- a gross receipts tax on your income from aircraft rentals and teaching
.
.
.



One way to get around some of these requirements (e.g. bathrooms, facilities, staff) is to become a subtenant of an existing airport business. You rent a cubicle at the FBO and in turn they submit a letter to the airport authority stating that you have use of their facilities.

As for the economic viability: After you have sorted out the papwerwork aspects (license to operate on the airport, business license, insurance), it all comes down to treating your customers right. If you manage to get your students to their checkride with a minimum level of frustration, you are going to be very busy.

Good points and part of what I was including in my comments about business admin. There is usually a sales tax on rental and there is usually a requirement to purchase (annually) a license to collect sales tax. There may or may not be a sales tax on labor. Liability insurance for the business is a given from a peace-of-mind stand point if not a regulatory requirement. There are other things that may have been missed like mag overhauls and instrument repairs. Prolly $10/hr on the nickel and dime stuff that always has to be taken care of. Remember that you and I know that chipped paint doesn't make a thing work better or worse but joe-suburbia doesn't know that...

 

[forseth11]

I purchased an archer with the same thing in mind as what you are thinking. Initially put it on leaseback with the intent to later start a flight school and add more aircraft.

Terrible idea

First, your reserve for maintenances are way too low. $300 for a 100-hour? Are you sure?

Owning a plane in general is a headache with maintenances. It’s like a tunnel but with no light at the end of it. Becusse the plane will be flying often, parts will break and wear out quicker. Students and renters WILL do damage. I guarantee it. It’s going to be an endless headache and every time your plane is down it’s going to hurt you financially as well.

Just my two cents

My plane is now off leaseback and I’ve never been happier

My dad owned this plane before, and the 100 hour cost $300 in the past. Even if the 100 hour went up to $700, I would still be able to afford it.

 

[forseth11]

Good points and part of what I was including in my comments about business admin. There is usually a sales tax on rental and there is usually a requirement to purchase (annually) a license to collect sales tax. There may or may not be a sales tax on labor. Liability insurance for the business is a given from a peace-of-mind stand point if not a regulatory requirement. There are other things that may have been missed like mag overhauls and instrument repairs. Prolly $10/hr on the nickel and dime stuff that always has to be taken care of. Remember that you and I know that chipped paint doesn't make a thing work better or worse but joe-suburbia doesn't know that...

So I have to pay a tax on what someone pays when renting? If I am correct, a C corp does that, but an S corp does not. I have accounted for extra maintenance including instrument repairs.

How can I get a quote for liability insurance? Doesn't insurance to rent out from AOPA cover that kind of thing?

Also, in my hangar we have a bathroom, kitchen, office, bedroom, living room, and dining room. I could consider an office a "classroom". Also, there is no FBO on the field to set these rules, and there are other people doing this kind of thing on the field without any issues from the airport.

 

[Clark1961]

My dad owned this plane before, and the 100 hour cost $300 in the past. Even if the 100 hour went up to $700, I would still be able to afford it.

One thing to learn is that the cheap inspection is all well and good as long as the airframe is in good condition. The owner of the airplane I bought had a bunch of cheap annuals in the logs. When my guy inspected it the owner had to pay about $17,000 in repairs to make it airworthy (cracked wing attachments).

In this case $300 is about 3 hours of shop time. Is that enough to change oil and check compression? What about opening all the inspection covers and looking at internals? I dunno anything about inspecting a 150. Just asking.

 

[mondtster]

My dad owned this plane before, and the 100 hour cost $300 in the past. Even if the 100 hour went up to $700, I would still be able to afford it.

The 100 hour inspections and annual inspections are just inspections. You need to factor in the replacement parts and additional labor for actually fixing stuff. It WILL break. You should have some spare parts on hand as well if you want to keep the airplane in the air making money. If not, it may end up sitting in the shop more than you think and longer than you think it will which will annoy customers trying to learn to fly.

By the way, why would your 100 hour inspection cost less than an annual? It's the same inspection.

 

[Clark1961]

So I have to pay a tax on what someone pays when renting? If I am correct, a C corp does that, but an S corp does not. I have accounted for extra maintenance including instrument repairs.

How can I get a quote for liability insurance? Doesn't insurance to rent out from AOPA cover that kind of thing?

Also, in my hangar we have a bathroom, kitchen, office, bedroom, living room, and dining room. I could consider an office a "classroom". Also, there is no FBO on the field to set these rules, and there are other people doing this kind of thing on the field without any issues from the airport.

Local taxes such as rental do not depend on corporation type. Whether or not taxes are required depends on state and local sales tax laws. Here in Colorado there is no tax on labor. I do not know how Texas handles things.

Liability insurance for the business is not the same as liability insurance for operation of the aircraft. the aircraft liability will pay if you hit another object, person, etc. Liability tax for the business pays or defends in any incident which damages another party. In this case if someone falls off the aircraft while checking fuel and sues you what is your protection? Aircraft insurance won't cover that one. It isn't your fault but guess what, you have to deal with it.

 

[weilke]

So I have to pay a tax on what someone pays when renting? If I am correct, a C corp does that, but an S corp does not.

S-corp, C-corp has no bearing on sales tax obligations and a gross-receipts tax (if applicable for your airport).

How can I get a quote for liability insurance? Doesn't insurance to rent out from AOPA cover that kind of thing?

You need two kinds of insurance:
Insurance for your aircraft. That policy you can get through an insurance agency licensed to sell insurance in your state. AOPAIA is one of many insurance agencies that sell aviation insurance.
Insurance for your business. 'Slip + fall insurance' or more generally GLI (general business liability insurance, premises liability insurance). Any local insurance agency would typically be able to write such a policy.

Depending on your state, if you operate your business as an entity (LLC, corporation) you may also be required to prove workmans comp coverage, even if your business only employs yourself.

Also, in my hangar we have a bathroom, kitchen, office, bedroom, living room, and dining room. I could consider an office a "classroom". Also, there is no FBO on the field to set these rules, and there are other people doing this kind of thing on the field without any issues from the airport.

It is not the FBO that makes the rules. It is the airport sponsor that may or may not have a policy on commercial operations. That others do this or the other does not predict whether you will be able to do so without running into trouble.

The fact that you have a bedroom attached to your hangar means one of two things:
- you are on an airpark
- you have a residential structure on an airport that may or may not be properly permitted.
In either case, using such a facility for a commercial purpose may get you unwanted attention from whoever runs the airport.

 

[coloradobluesky]

If you run a business you need an accountant. Reason? To stay out of tax trouble. A public accountant will do, dont need a CPA. To get started you can just open a checking account in your DBA (doing business as) business name. Your bank will have the forms. Take all your income from the business and put it in the checking account and pay all your bills out of the checking acct (have a separate credit card in your name for the business that you pay off from the checking acct). Then take all those checks and deposits to your accountant at tax time and he can figure your taxes. An LLC is the easiest and cheapest for a one man operation. S corps are ok taxwise but are more trouble to keep running and need two people (a secretary and a president). An LLC only needs one person. LLCs are custom made for small businesses. C corps have MORE taxes for small business owners and you dont need their complexity. They are for larger businesses that have lots of stock holders. Dont do anything except a DBA without talking to an accountant.

 

[Clark1961]

If you run a business you need an accountant. Reason? To stay out of tax trouble. A public accountant will do, dont need a CPA. To get started you can just open a checking account in your DBA (doing business as) business name. Your bank will have the forms. Take all your income from the business and put it in the checking account and pay all your bills out of the checking acct (have a separate credit card in your name for the business that you pay off from the checking acct). Then take all those checks and deposits to your accountant at tax time and he can figure your taxes. An LLC is the easiest and cheapest for a one man operation. S corps are ok taxwise but are more trouble to keep running and need two people (a secretary and a president). An LLC only needs one person. LLCs are custom made for small businesses. Definitely dont do a C corp. C corps have MORE taxes for small business owners and you dont need their complexity. They are for larger businesses that have lots of stock holders. Dont do anything except a DBA without talking to an accountant.

Oh lord, visit with a tax attorney before/after reading this. I've had a C corp and now have an LLC. Many bits of questionable info here. A C corp is much more flexible than an S corp. While there may be some advantages in an S corp for a partnership a C corp is fine for a sole proprietor. You have quarterly filings but those are a piece of cake.

 

[coloradobluesky]

Choosing an business entity type is a matter of picking the type that gets the profits out of the corporation and into the owners accounts with the least tax and least complexity. Talk to an accountant. An experienced one has seen it all.

 

[mtuomi]

By the way, why would your 100 hour inspection cost less than an annual? It's the same inspection.

A&Ps often work for cheaper than IA's. No other reason. I can see a private A&P doing a 100hour for 300 cash in hand, if you provide the space and tools for it.
Not sure if that's a very legit way to operate a business though.

 

[Clark1961]

A&Ps often work for cheaper than IA's. No other reason. I can see a private A&P doing a 100hour for 300 cash in hand, if you provide the space and tools for it.
Not sure if that's a very legit way to operate a business though.

It can be legit. There are some reporting requirements on the admin side but they are covered if the A&P is operating as a reporting entity.

 

[John221us]

Choosing an business entity type is a matter of picking the type that gets the profits out of the corporation and into the owners accounts with the least tax and least complexity. Talk to an accountant. An experienced one has seen it all.

At least in CA, an S Corp taxes / income flows to the owners. An LLC would be similar. I think the differences are mainly about shielding from liability, but those benefits are slim, as I understand it doesn't take much effort to pierce the "corporate veil". I believe there is more maintenance on an S Corp, as you need to file minutes every year and there is a bit more effort on the side of your tax accountant. I have had an S Corp for over 20 years, but we pay the professionals to maintain it.

 

[Clark1961]

At least in CA, an S Corp taxes / income flows to the owners. An LLC would be similar. I think the differences are mainly about shielding from liability, but those benefits are slim, as I understand it doesn't take much effort to pierce the "corporate veil". I believe there is more maintenance on an S Corp, as you need to file minutes every year and there is a bit more effort on the side of your tax accountant. I have had an S Corp for over 20 years, but we pay the professionals to maintain it.

Some good points. Certainly a person should separate all business activity from personal accounts to protect themselves. An S corp or LLC is adequate for that but one must maintain full financial separation to maintain the corporate veil. A C corp can do the same things and provide another tax layer in dealing with the IRS. The attorney I used was a former IRS attorney and basically said go with a C corp. After using a C corp and an LLC I wouldn't disagree with him. The IRS will go after the individual with an S corp or an LLC on their return. They will hesitate to go after a C corp (not the individual because they aren't involved) because IRS attorneys are required. It's an interesting little bit of real world taxes...

 

[mtuomi]

It can be legit. There are some reporting requirements on the admin side but they are covered if the A&P is operating as a reporting entity.

To me a $300 100hr sounds more of a "Hey, Billy, come over here, give it a once-over and sign this logbook" sort of project.

 

[Clark1961]

To me a $300 100hr sounds more of a "Hey, Billy, come over here, give it a once-over and sign this logbook" sort of project.

If a guy is willing to do that who are you to say it's wrong?

 

[mondtster]

To me a $300 100hr sounds more of a "Hey, Billy, come over here, give it a once-over and sign this logbook" sort of project.

Agreed, which was the point I was trying to make. It doesn't seem real legitimate to me unless the only purpose of the 100 hour inspection is to make the paperwork for the operation legal.

 

[mtuomi]

If a guy is willing to do that who are you to say it's wrong?

I didn't say it was wrong. I just said I'm not sure if that's a good way to run a legit business in the long run. Your maintenance will make or break your flight school. And "Billy" can be great, or can be a liability. Hence the "I'm not sure".

 

[Clark1961]

I didn't say it wasn't wrong. I just said I'm not sure if that's a good way to run a legit business in the long run. Your maintenance will make or break your flight school. And "Billy" can be great, or can be a liability. Hence the "I'm not sure".

"I didn't say it wasn't wrong" Okay, I get that...or was that Freudian on your part?

 

[mtuomi]

"I didn't say it wasn't wrong" Okay, I get that...or was that Freudian on your part?

Double negative corrected...

 

[weilke]

Choosing an business entity type is a matter of picking the type that gets the profits out of the corporation and into the owners accounts with the least tax and least complexity. Talk to an accountant. An experienced one has seen it all.

For a 'small flight school' operated by a college student, there is not going to be much of an issue in handling the profits ;-)

 

[forseth11]

One thing to learn is that the cheap inspection is all well and good as long as the airframe is in good condition. The owner of the airplane I bought had a bunch of cheap annuals in the logs. When my guy inspected it the owner had to pay about $17,000 in repairs to make it airworthy (cracked wing attachments).

In this case $300 is about 3 hours of shop time. Is that enough to change oil and check compression? What about opening all the inspection covers and looking at internals? I dunno anything about inspecting a 150. Just asking.

I was going to owner assist. Which means I change oil, I open inspection panels, and stuff like that. Also I know this 150, the airframe is in great condition.

 

[forseth11]

S-corp, C-corp has no bearing on sales tax obligations and a gross-receipts tax (if applicable for your airport).



You need two kinds of insurance:
Insurance for your aircraft. That policy you can get through an insurance agency licensed to sell insurance in your state. AOPAIA is one of many insurance agencies that sell aviation insurance.
Insurance for your business. 'Slip + fall insurance' or more generally GLI (general business liability insurance, premises liability insurance). Any local insurance agency would typically be able to write such a policy.

Depending on your state, if you operate your business as an entity (LLC, corporation) you may also be required to prove workmans comp coverage, even if your business only employs yourself.



It is not the FBO that makes the rules. It is the airport sponsor that may or may not have a policy on commercial operations. That others do this or the other does not predict whether you will be able to do so without running into trouble.

The fact that you have a bedroom attached to your hangar means one of two things:
- you are on an airpark
- you have a residential structure on an airport that may or may not be properly permitted.
In either case, using such a facility for a commercial purpose may get you unwanted attention from whoever runs the airport.

The apartment in the hangar is classified for business not residential. The airport is privately owned but is open for public use. It is owned in part by each hangar owner.

 

[forseth11]

If you run a business you need an accountant. Reason? To stay out of tax trouble. A public accountant will do, dont need a CPA. To get started you can just open a checking account in your DBA (doing business as) business name. Your bank will have the forms. Take all your income from the business and put it in the checking account and pay all your bills out of the checking acct (have a separate credit card in your name for the business that you pay off from the checking acct). Then take all those checks and deposits to your accountant at tax time and he can figure your taxes. An LLC is the easiest and cheapest for a one man operation. S corps are ok taxwise but are more trouble to keep running and need two people (a secretary and a president). An LLC only needs one person. LLCs are custom made for small businesses. C corps have MORE taxes for small business owners and you dont need their complexity. They are for larger businesses that have lots of stock holders. Dont do anything except a DBA without talking to an accountant.

Thanks for the advise. My dad uses a general accountant for his taxes for his business and personal. I'll look into it. I also planed on doing the checking account thing. So I guess I will go with an LLC.

 

[forseth11]

If a guy is willing to do that who are you to say it's wrong?

I was going to use Joe Sloat or for some inspections I might pay Lou Fournier. They are both IAs and have done very reliable work in the past and they are on the field. They allow owner assisted work and they inspect it.

 

[Harold Rutila]

For the record, there is no sales tax on flight training in Texas. Any aircraft rental or instruction that could conceivably be purchased for proficiency or training is specifically exempt in the Texas state tax code. See the Texas Comptroller of Public Accounts letter 200809501L. This came as a surprise to me when I started training people in my C150, having previously done so in Indiana and Michigan where collection of sales tax is required.

Cessna 150s are great trainers. Make sure you take a look at the SAIB concerning elevator attach point corrosion. Even though you're Part 91 and the SAIB technically is not mandatory under the federal regs, any lawyer can frame you as negligent for failing to comply with it if your aircraft is involved in an accident. Also, as someone who trains people in my own plane, I wouldn't bother with having just an A&P look at my airplane. I have an IA who does it in a reputable shop. That's not to say regular A&Ps are bad by any means, but if you want to mitigate the chances of being framed as a guy who skimped on maintenance, going with the highest certified mechanics to do (or at least certify) the work is your best bet.

That said, the 150s also have serious engine cooling issues in the DFW area from April through September. Consider getting an oil cooling kit installed. In the absence of that, you'll need to develop procedures that ensure students and instructors aren't scorching your cylinder heads beyond their limits. That may mean the airplane remains unused during the hottest parts of the day.

I highly suggest you read Practical Aviation Law by J. Scott Hamilton. He goes over a lot of aviation-specific liability concerns that we almost never touch as topics of conversation on this board.

Finally, go for it. It's fun.

 

[forseth11]

For the record, there is no sales tax on flight training in Texas. Any aircraft rental or instruction that could conceivably be purchased for proficiency or training is specifically exempt in the Texas state tax code. See the Texas Comptroller of Public Accounts letter 200809501L. This came as a surprise to me when I started training people in my C150, having previously done so in Indiana and Michigan where collection of sales tax is required.

Cessna 150s are great trainers. Make sure you take a look at the SAIB concerning elevator attach point corrosion. Even though you're Part 91 and the SAIB technically is not mandatory under the federal regs, any lawyer can frame you as negligent for failing to comply with it if your aircraft is involved in an accident. Also, as someone who trains people in my own plane, I wouldn't bother with having just an A&P look at my airplane. I have an IA who does it in a reputable shop. That's not to say regular A&Ps are bad by any means, but if you want to mitigate the chances of being framed as a guy who skimped on maintenance, going with the highest certified mechanics to do (or at least certify) the work is your best bet.

That said, the 150s also have serious engine cooling issues in the DFW area from April through September. Consider getting an oil cooling kit installed. In the absence of that, you'll need to develop procedures that ensure students and instructors aren't scorching your cylinder heads beyond their limits. That may mean the airplane remains unused during the hottest parts of the day.

I highly suggest you read Practical Aviation Law by J. Scott Hamilton. He goes over a lot of aviation-specific liability concerns that we almost never touch as topics of conversation on this board.

Finally, go for it. It's fun.

Thanks for the advise and thanks for telling me about the tax low.

When I learned to fly in that plane, I did it during the hottest days. I was taught to lean of peak even when doing maneuvers and to always do straight and level after maneuvers to allow the engine to cool along with no excessively long slow climbs. If I did that, could that counter the heating issue?

 

[aftCG]

You need to go back and re quote your insurance.

I can get insurance on a pretty hot plane for $1100/year. I pay a bit over $800 for my tail dragger now.

But when I did what you're doing the insurance to put a C172 and C177RG up for instruction and rental was closer to $1100 per MONTH.

I'm assuming you're throwing the Mooney in the mix too?

You also need to detach yourself emotionally from these planes. Love them as you will, most of the people you hand the keys to will treat them harshly or with indifference.

The planes are machinery used to make profit. Like a drill press or espresso machine.

You did some good thinking and some math. You might make it.

One thing of note. You said the flying school on the field had a crap reputation. If that if the case they are even MORE likely to do lame/underhanded things to hurt your business

 

[forseth11]

You need to go back and re quote your insurance.

I can get insurance on a pretty hot plane for $1100/year. I pay a bit over $800 for my tail dragger now.

But when I did what you're doing the insurance to put a C172 and C177RG up for instruction and rental was closer to $1100 per MONTH.

I'm assuming you're throwing the Mooney in the mix too?

You also need to detach yourself emotionally from these planes. Love them as you will, most of the people you hand the keys to will treat them harshly or with indifference.

The planes are machinery used to make profit. Like a drill press or espresso machine.

You did some good thinking and some math. You might make it.

One thing of note. You said the flying school on the field had a crap reputation. If that if the case they are even MORE likely to do lame/underhanded things to hurt your business

AOPA quoted between $1,500-$2,500, so I am going with the higher number for now. I have 180 hours in this aircraft but they don't know that. They just know my total time of 360. Also I am 18, so it is likely a higher cost.

I have detached from the planes and I understand.

The other flight school doesn't really care about the others around them because they mostly train just people from over seas, so as long as that isn't my focus, I should be fine.

 

[aftCG]

They quoted you that to instruct and rent to solo students? To rent means any rusty pilot waking in the door.

And the detachment is to insulate against the a* Vietnam F-4 pilot who likes to reminisce about the good old days at the expense of your airframe.

If I may offer one other piece of advice: no employees. You teach and rent planes. If you need another instructor that person is not an employee. They charge the student directly for their time. That instructor gets a 1099 to settle up with the tax man. Student pays you for rental of the plane.

 

[forseth11]

They quoted you that to instruct and rent to solo students? To rent means any rusty pilot waking in the door.

And the detachment is to insulate against the a* Vietnam F-4 pilot who likes to reminisce about the good old days at the expense of your airframe.

If I may offer one other piece of advice: no employees. You teach and rent planes. If you need another instructor that person is not an employee. They charge the student directly for their time. That instructor gets a 1099 to settle up with the tax man. Student pays you for rental of the plane.

Nice idea. I will do that. Employees are a hassle especially for a small business.

I plan on requiring 30-60 minutes of instruction before someone can rent. Then after that, they will only need instruction again if they go too long without any flying.

Also, I was thinking of including a two way dash cam like in cars on top of the panel if it is allowed. Like the kind of cameras which record both the pilot and is what ahead of them. Still deciding whether or not I should do this though.

 

[forseth11]

I have received a general business liability quote for this business. It would be only $607 per year for $1M coverage for liability, personal and advertising injury, damages to hangar.

 

[Vance Breese]

I have had many successful businesses over the last fifty years and two of the most important things I have learned are:

1. I never want to be the low price leader because many people will judge quality based on price.
Most businesses net less than five percent of the gross so a ten percent price reduction will likely make my business lose money and a five percent price increase may well double my net income.
In my experience cheap prices attract cheap (unpleasant) customers.

2. Sales drive the business; as the owner it is my primary job to make certain the client feels he is getting his money’s worth so he continues with me and recommends me.
It is my job to reach out to new potential clients by being involved in the aviation comunity.
I have found it important to allocate time for sales and marketing.
It is easy to say I am too busy for sales and marketing just before the business drops off.
Sales efforts have a lead time before they pay off.
If I am too busy rather than backing off on my sales efforts I raise my prices.

My most recent business is a one man, one aircraft flight school and I have done well in my first two years of operation despite being 200 miles from a major metropolitan area. My net income continues to grow.

Good luck with your adventure; it is bound to be a wonderful learning experience.

 

[dell30rb]

Good luck. I think you have a reasonable handle on the costs.

 

[OkieAviator]

My advice is don't take advice from the Internet.

 

[forseth11]

I have had many successful businesses over the last fifty years and two of the most important things I have learned are:

1. I never want to be the low price leader because many people will judge quality based on price.
Most businesses net less than five percent of the gross so a ten percent price reduction will likely make my business lose money and a five percent price increase may well double my net income.
In my experience cheap prices attract cheap (unpleasant) customers.

2. Sales drive the business; as the owner it is my primary job to make certain the client feels he is getting his money’s worth so he continues with me and recommends me.
It is my job to reach out to new potential clients by being involved in the aviation comunity.
I have found it important to allocate time for sales and marketing.
It is easy to say I am too busy for sales and marketing just before the business drops off.
Sales efforts have a lead time before they pay off.
If I am too busy rather than backing off on my sales efforts I raise my prices.

My most recent business is a one man, one aircraft flight school and I have done well in my first two years of operation despite being 200 miles from a major metropolitan area. My net income continues to grow.

Good luck with your adventure; it is bound to be a wonderful learning experience.

I plan allocating a large portion of revenue to pay for marketing until I can't handle any more students.

I guess I will increase my prices to match everyone else's.

It is nice to know this kind of thing can be successful. Thank you.

 

[Ravioli]

I was going to use xxx xxxx or for some inspections I might pay xxx xxxxxxxx. They are both IAs and have done very reliable work in the past and they are on the field. They allow owner assisted work and they inspect it.

Names redacted. The first one is NOT an IA. He's a great A&P and does all of the maintenance on my RV, but he is not an IA. I don't know the credentials of the second one for maintenance. I know him as a DPE, and I think he's a heck of a good guy.

 

[forseth11]

Names redacted. The first one is NOT an IA. He's a great A&P and does all of the maintenance on my RV, but he is not an IA. I don't know the credentials of the second one for maintenance. I know him as a DPE, and I think he's a heck of a good guy.

The first guy got his IA about three months ago. At least that is what he told me.

 

[forseth11]

I have had many successful businesses over the last fifty years and two of the most important things I have learned are:

1. I never want to be the low price leader because many people will judge quality based on price.
Most businesses net less than five percent of the gross so a ten percent price reduction will likely make my business lose money and a five percent price increase may well double my net income.
In my experience cheap prices attract cheap (unpleasant) customers.

2. Sales drive the business; as the owner it is my primary job to make certain the client feels he is getting his money’s worth so he continues with me and recommends me.
It is my job to reach out to new potential clients by being involved in the aviation comunity.
I have found it important to allocate time for sales and marketing.
It is easy to say I am too busy for sales and marketing just before the business drops off.
Sales efforts have a lead time before they pay off.
If I am too busy rather than backing off on my sales efforts I raise my prices.

My most recent business is a one man, one aircraft flight school and I have done well in my first two years of operation despite being 200 miles from a major metropolitan area. My net income continues to grow.

Good luck with your adventure; it is bound to be a wonderful learning experience.

May I ask, how many hours do your aircraft fly each year in your flight school?