Open for Business: Advice from entrepreneurs on starting and maintaining a successful aviation business

Open for Business Advice from entrepreneurs on starting and maintaining a successful aviation business By Michelle Garetson August 2000 Some people believe that as long as someone else is signing your paycheck, you're replaceable, so...

In the late 1980s and early 1990s, a downsizing trend in aviation resulted in a surplus of tools and the timing was right for Brown to begin his business. His specialty was in sheet metal, and he began buying tools, mostly cutting tools, from a company in Wichita, KS. Brown would bring extras back to sell to other mechanics. Eventually, he would take advantage of any opportunity to buy surplus tools. He bought as many as possible as there were very few places to buy specialty aircraft tools.

"Timing was good with the surplus tool market," Brown remembers. "I got a hold of a listing of repair stations and bombarded them with a crude brochure mailer. My inventory was kept in my dining room." Brown adds, "I always knew that I wanted to own my own business. Now we sell new tools exclusively, and we are one of the world's largest distributors for Sioux and Zephyr tools."

Cleared for takeoff

While RAPCO and Brown Aviation Tool Supply have been in business for a number of years, what's the reading on the new business barometer in today's aviation marketplace?

Apparently, it's a favorable one for a newcomer to the entrepreneur arena, Jim Freeman of Helicopter Specialties Inc. (HSI) in Janesville, WI. Helicopter Specialties Inc. officially opened its doors in June 2000, but it was the culmination of more than a few years of planning. Freeman, owner of HSI, has an Avionics degree, is an A&P with IA certification, and a pilot. The bulk of his experience in helicopters came from his years of working with OmniFlight. His staff boasts a wealth of experience as highly trained engine, component overhaul, sheet metal, and avionics technicians. Most all of them have A&P with IA certificates and several are commercial pilots.

When OmniFlight moved operations from Wisconsin to Dallas, TX, Freeman was one of many who chose stay in Wisconsin. He went to work for Woodward Governor in Rockford, IL, but always wanted to be his own boss and had started a wiring business.

When asked how he finally made the decision to gather the Wisconsin OmniFlight personnel who stayed in the area and start the company, he replied, "Frustration, mostly. There was a lot of talent and experience left in this area after OmniFlight moved to Dallas. Geography and experienced staff are our biggest selling points," says Freeman. "When OmniFlight left, there was a huge void in the greater Chicago metropolitan area for a full-service helicopter facility. By being able to offer the customer a location closer to their homebase, it saves them time and gets them back in the air, making money again." He continues, "Right now, people in the Midwest have to go great distances for major service capabilities for their helicopters, and they could be without that aircraft for a month or more. Our location would help them cut that time by a large margin."

"As for the staff," explains Freeman, "the Small Business Development Center's representative that I was working with said that I had the best situation by having the expertise already in place. He said a very high percentage of the people starting up a business have grand ideas, but don't know how they're going to make those ideas happen."

The business of business

Quite often, the hardest part of starting a business is getting started. Legal people need to be consulted; bank managers need to be convinced you're worth the risk; and insurance underwriters, a big hurdle in aviation, need to be negotiated. Freeman needed a business plan to present to the bank, so he got involved with the Small Business Development Center (SBDC) at a local university. The SBDC can help with legal issues, business plans, and other concerns for potential and present entrepreneurs.

For Freeman, the trip to the bank proved to be an eye opener.

"You have to present a business plan," explains Freeman, "but I about fell over when the bank manager told me that he could have helped me more if I would have come to him for the loan when I was still with Woodward Governor. Now that I was out on my own, even with a major contract and experienced staff, it would be too much of a risk."

More hurdles

Freeman's next hurdle was obtaining insurance for the business, and it proved to be a big one.

"The thing that almost made me decide not to go through with this was insurance. A year and a half ago, I started getting quotes. Today, that quote has more than doubled. I received many varied opinions from underwriters with one requiring a $20 million policy on a $2 million aircraft. I couldn't afford the premiums, and I eventually ended up with a policy from Lloyd's of London that I could afford."

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