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#1
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FBO Purchase worth it ?
Hi all,
I have a friend that is about to purchase a small FBO. Now we all know that owning a small FBO is a labor of love at the very least. However, he is wondering if it is really financial suicide given the trends of today's laws, governmental regs, legislation, TSA, etc. His (my) question is: Do any of you have any general or specific thoughts that you might offer him before he signs on the dotted line? Thanks, Toņo |
#2
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In article ,
Toņo wrote: Hi all, I have a friend that is about to purchase a small FBO. Now we all know that owning a small FBO is a labor of love at the very least. However, he is wondering if it is really financial suicide given the trends of today's laws, governmental regs, legislation, TSA, etc. His (my) question is: Do any of you have any general or specific thoughts that you might offer him before he signs on the dotted line? It depends on where the FBO is and why it's for sale. For example, it could easily be financial suicide to buy a failed FBO where at the same airport with a very good one (or two). Or buying an FBO near DCA/IAD/BWI, BOS, JFK, LAX, etc would be crazy. -- Bob Noel looking for a sig the lawyers will like |
#3
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"Bob Noel" wrote in message ... In article , Toņo wrote: Hi all, I have a friend that is about to purchase a small FBO. Now we all know that owning a small FBO is a labor of love at the very least. However, he is wondering if it is really financial suicide given the trends of today's laws, governmental regs, legislation, TSA, etc. His (my) question is: Do any of you have any general or specific thoughts that you might offer him before he signs on the dotted line? It depends on where the FBO is and why it's for sale. For example, it could easily be financial suicide to buy a failed FBO where at the same airport with a very good one (or two). Or buying an FBO near DCA/IAD/BWI, BOS, JFK, LAX, etc would be crazy. Or buying an FBO at an airport that is constantly under threat of closure. |
#4
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Earl Grieda wrote:
"Bob Noel" wrote in message It depends on where the FBO is and why it's for sale. For example, it could easily be financial suicide to buy a failed FBO where at the same airport with a very good one (or two). Or buying an FBO near DCA/IAD/BWI, BOS, JFK, LAX, etc would be crazy. Or buying an FBO at an airport that is constantly under threat of closure. Bob and Earl... The FBO is under sale because the owner is no longer physically capable due to health problems. It has been in continuous operation for 20 years or so and operates slightly in the black under poor management. The nearest class B is 50 miles away and the airport in general seems to not be in threat of closure. There are two other FBO's on field that seem to be doing OK. They have been in operation for a number of years. The area is modest in population (maybe 100,000)with a viable economy that seems to be booming at the moment. I believe that the local infrastructure will support the business but it is my concern (as well as his) that the general trends in aviation will adversely affect the small FBO in the near future. Take for example the cost of insurance, or even the ever-increasing governmental programs supposedly designed to increase security at airports. I was told today that an FBO was fined heavily when and FBI agent was able to walk freely onto the tarmac and take a picture of an aircraft in the class D airspace. Another example was a small FBO that was co-located with a part 135 operation that was required to install two $10,000-- metal detection gates at their entrances. Anyway, I was just testing the water to see if anyone had any strong feelings about taking on the purchase of an FBO in today's climate. Thanks to both of you for your responses, Toņo |
#5
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On Sat, 02 Apr 2005 18:50:44 -0800, Toņo
wrote: Hi all, I have a friend that is about to purchase a small FBO. Now we all know that owning a small FBO is a labor of love at the very least. However, he is wondering if it is really financial suicide given the trends of today's laws, governmental regs, legislation, TSA, etc. His (my) question is: Do any of you have any general or specific thoughts that you might offer him before he signs on the dotted line? It is probably more difficult than ever to make it as a small GA FBO. Rising costs will continue to deter flying and flight training. Increased government regulation could hamper GA significantly (just look at the DC area for examples). However, if the FBO is a bit larger, and caters to biz jet types, business is probably up and to the right... I know the local area charter ops are doing great business. A lot of execs won't tolerate the airlines any longer. -Nathan |
#6
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Toņo wrote:
Hi all, I have a friend that is about to purchase a small FBO. Now we all know that owning a small FBO is a labor of love at the very least. However, he is wondering if it is really financial suicide given the trends of today's laws, governmental regs, legislation, TSA, etc. His (my) question is: Do any of you have any general or specific thoughts that you might offer him before he signs on the dotted line? Read all the regs carefully. About 10 years ago I thought about becoming a partner in a 135 operation. Then I read about the staff you were required to have, etc. The fantasy lasted about 10 minutes. |
#7
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A great old timer who we lost a few years ago used to tell me that:
"If you want to make a small fortune in Aviation - start with a large fortune and know when to stop!" (Thanks, Uncle Vern!) |
#8
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"Toņo" wrote in message ... His (my) question is: Do any of you have any general or specific thoughts that you might offer him before he signs on the dotted line? What are the assets of the FBO? Does it have the fuel concession? What are the terms of the lease? What is the projected revenue -- realistically? What are the real costs? Are there any environmental concerns (underground fuel tanks, etc.)? What is the internal rate of return? Does your friend have a business plan? Are there any hazardous materials, such as asbestos and lead, in the building materials? Is the building up to code? Is there room for expansion? What is the competition like? A lot of guys are trying to sell an FBO, but in fact they don't own anything -- everything is leased. If all they have to sell is an empty box, why buy it? |
#9
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On Sun, 3 Apr 2005 15:51:18 -0700, C J Campbell wrote:
What are the assets of the FBO? Does it have the fuel concession? What are the terms of the lease? What is the projected revenue -- realistically? What are the real costs? Are there any environmental concerns (underground fuel tanks, etc.)? What is the internal rate of return? Does your friend have a business plan? Are there any hazardous materials, such as asbestos and lead, in the building materials? Is the building up to code? Is there room for expansion? What is the competition like? all good points. and: does he have the money and the dedication for running an FBO? will his family join in? #m -- http://www.hotze.priv.at/album/aviation/caution.jpg |
#10
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C J Campbell wrote:
What are the assets of the FBO? Does it have the fuel concession? What are the terms of the lease? What is the projected revenue -- realistically? What are the real costs? Are there any environmental concerns (underground fuel tanks, etc.)? What is the internal rate of return? Does your friend have a business plan? Are there any hazardous materials, such as asbestos and lead, in the building materials? Is the building up to code? Is there room for expansion? What is the competition like? A lot of guys are trying to sell an FBO, but in fact they don't own anything -- everything is leased. If all they have to sell is an empty box, why buy it? Great points and questions, CJ. I will pass all of this onto my friend. I especially like the last question!! Thanks! Toņo |
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