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...

Liability insurance has long been a critical issue for aircraft technicians and business owners alike and continues to be so.

According to White, "Twenty years ago, product liability insurance was not at the level that it's at today. It's a big deal now - you'd be out of business if you didn't have it today. Product liability insurance is a limited market. Ours goes through Lloyd's of London. You've got to sit down with them for at least a half a day to show them what you do and mainly show them what you don't do if you have stuff made by vendors, so they can understand what liability you inject into that product. It's worth your time to sit down with the insurance underwriter."

Michael Brown expands on the liability point. "It was much harder when I first started with the insurance issue. The word 'aviation' sends up a red flag when dealing with underwriters. We had to ultimately accept a policy that we would not sell anything that becomes a part of the aircraft. This is the reason why we don't sell safety wire - it violates our insurance policy."

New prospects

Over and over, business people will tell you that networking in the industry is important in growing a company. Previous employment experiences can provide leads as can attending trade shows, trade association meetings, and reading trade publications. All three entrepreneurs have developed customer bases and continue to prospect new clients by finding and creating opportunities to promote their business.

RAPCO has increased in size and scale every year through the addition of products and services.

"We just kept adding products and adding products. We bought an overhaul process specification for vacuum pumps as I thought that would be a good business to add to our base. My partner and I went for training to learn that business and basically, this new business doubled our sales. Today, the overhaul of pumps probably represents 45 percent of RAPCO's sales," claims White.

Brown feels his web site has certainly been an asset. "Three years ago, we were one of the first to offer online ordering," explains Brown. "Now everybody's offering it, but we knew back then that it was necessary to provide that service to our customers. We are still mainly mail order, but the web site offers another medium to reach and service customers."

HSI's first contract, to completely customize a 12-year-old Messerschmitt helicopter for the Milwaukee Regional Medical Center (MRMC) for use in Flight for Life operations, came on a mechanic's recommendation. Freeman, a former relief mechanic with OmniFlight, had worked previously with the maintenance staff on the MRMC fleet. When MRMC's mechanic left to take another job, he recommended Freeman to the board as someone who would do a good job for them. MRMC's prior contracts with OmniFlight and confidence with Freeman's work gave them the comfort level needed to award the contract to HSI - so much so, that they were amenable in paying some expenses up front to get the project rolling.

Freeman's years as a relief mechanic as well as a helicopter pilot have afforded him the opportunities to meet a variety of people. This database has provided him with many prospects to approach now as potential customers.

Where are they now?

Today, RAPCO boasts two 14,000-sq.-ft buildings in Hartland, WI, and a 10,000-sq.-ft. building in Monroe, WI. In addition to its other products and services, RAPCO now manufactures small and large pumps from scratch as a new product and can now offer rebuilt as well as brand new.

In 1993, RAPCO launched Fleet Support Service, which now has 15 employees. RAPCO Inc. has 30 employees. White has recently retired but remains RAPCO's CEO. His sons, Patrick and Michael J., are the president and vice president, respectively, and White is happy with what they've brought to the business.

"I didn't have all the marketing skills and engineering skills that are necessary today," says White. "I have a tech school background as an electronics technician and I worked at Motorola prior to joining Cooper. My son Patrick was a double major in Business and Finance and he brought the business expertise to the company. Michael J. has a degree in Electrical Engineering and flies F-16s with the National Guard. He is also our FAA liaison."

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