Starting an FBO

Freightdog1 · March 22nd, 2007, 10:01

Has anyone here started thier own FBO? I'm tired of our crappy FBO here so I was wondering what it would take to start my own.
Anyone with info?
Thanks

tprops4me · March 22nd, 2007, 11:56

Do you mean flight school, or FBO?

Freightdog1 · March 22nd, 2007, 12:50

I guess a little of both, Have an FBO at an airport and offer what an FBO offers: fuel, flight training, and any other services

fly8slep · March 22nd, 2007, 18:01

Do you have money to burn? I've talked to a few owners and the general concensus is that it's for retired guys looking to have some fun, meet people. Profit margin is very thin, you need a lot of cash laying around. The gas prices are forcing a lot of FBOs to shut down and it seems like gas will only go higher.

mojo6911 · March 25th, 2007, 01:20

I have managed an FBO, and know all the ins-and-outs. There are a LOT of costs and liabilities when you are an FBO. Here are a lot of problems I ran into.

INSURANCE - This is a big one. If you are doing aircraft rentals, it can eat you alive. When you sell fuel, you will have to worry about liability from fuel spills, fires, aircraft damage, etc...It would take a pretty sizeable general liability policy to properly cover yourself and the company in case of damage. When hanagaring aircraft, one of your line guys is bound to ding one. It is only a matter of time.

Fluctuating Business - This depends on who you market to, but if you are at a small airport with little jet traffic, you can expect your gross income for weeks at a time to be $0 if the weather gets bad. Keep in mind, this is just gross income, and once you subtract out your fixed costs, like utilities, insurance, it can really eat you alive fast.

Managing Fuel Inventory - You have to buy big fuel loads at a time, and usually these bills are due within 2 weeks to a month. 5000 gallons x $3.00 a gallon = $15k due in a month. Lets say you have a slow couple of weeks, it is very easy to get into a cash-flow crisis, as all of your bills are still due, but you are brining in little income. It is hard to forecast and budget based on the fluctuating business.

The best thing you can do is try to micromanage your variable costs, like employee payroll and things like that. If you are trying to rent out aircraft as well, it would be best to try to get a leaseback structure, so you aren't buried in debt. Also, loyalty is hard to break in aviation. It will be hard to "steal" loyal clients from the other FBO.

Just some things to consider. PM if you want more info.

BuickCFI · March 25th, 2007, 01:56

Quote:

Originally Posted by Freightdog1

Has anyone here started thier own FBO? I'm tired of our crappy FBO here so I was wondering what it would take to start my own.
Anyone with info?
Thanks

just curious where are you going to do this?

March 22nd, 2007, 10:01	#1
Freightdog1 Newbie Join Date: Mar 2007 Location: Earth Posts: 25	Starting an FBO Has anyone here started thier own FBO? I'm tired of our crappy FBO here so I was wondering what it would take to start my own. Anyone with info? Thanks

March 22nd, 2007, 11:56	#2
tprops4me Senior Member Join Date: Jul 2006 Location: West Michigan Posts: 346	Re: Starting an FBO Do you mean flight school, or FBO?

March 22nd, 2007, 12:50	#3
Freightdog1 Newbie Join Date: Mar 2007 Location: Earth Posts: 25	Re: Starting an FBO I guess a little of both, Have an FBO at an airport and offer what an FBO offers: fuel, flight training, and any other services

March 22nd, 2007, 18:01	#4
fly8slep Senior Member Join Date: Jul 2006 Location: stl Posts: 380	Re: Starting an FBO Do you have money to burn? I've talked to a few owners and the general concensus is that it's for retired guys looking to have some fun, meet people. Profit margin is very thin, you need a lot of cash laying around. The gas prices are forcing a lot of FBOs to shut down and it seems like gas will only go higher.

March 25th, 2007, 01:20	#5
mojo6911 Old Skool Join Date: Jan 2007 Location: GKY Posts: 1,630	Re: Starting an FBO I have managed an FBO, and know all the ins-and-outs. There are a LOT of costs and liabilities when you are an FBO. Here are a lot of problems I ran into. *INSURANCE* - This is a big one. If you are doing aircraft rentals, it can eat you alive. When you sell fuel, you will have to worry about liability from fuel spills, fires, aircraft damage, etc...It would take a pretty sizeable general liability policy to properly cover yourself and the company in case of damage. When hanagaring aircraft, one of your line guys is bound to ding one. It is only a matter of time. *Fluctuating Business* - This depends on who you market to, but if you are at a small airport with little jet traffic, you can expect your gross income for weeks at a time to be $0 if the weather gets bad. Keep in mind, this is just gross income, and once you subtract out your fixed costs, like utilities, insurance, it can really eat you alive fast. *Managing Fuel Inventory* - You have to buy big fuel loads at a time, and usually these bills are due within 2 weeks to a month. 5000 gallons x $3.00 a gallon = $15k due in a month. Lets say you have a slow couple of weeks, it is very easy to get into a cash-flow crisis, as all of your bills are still due, but you are brining in little income. It is hard to forecast and budget based on the fluctuating business. The best thing you can do is try to micromanage your variable costs, like employee payroll and things like that. If you are trying to rent out aircraft as well, it would be best to try to get a leaseback structure, so you aren't buried in debt. Also, loyalty is hard to break in aviation. It will be hard to "steal" loyal clients from the other FBO. Just some things to consider. PM if you want more info.

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