how to get started as AC broker?

[Bill]

(Looking for serious replies please...)

I am a ATP pilot with a general aviation background, and am growing
tired of the insecurity of the (no matter where you work) "pro pilot
job." Pagers, on call, no real vacations, etc, etc.

Another friend of mine, also an ATP, feels the same way. However we
both want to remain connected to aviation and are thinking of opening
a small aircraft sales/brokerage business, focusing on basic airplanes
such as Cessna 172/182, Piper Warrior, Beech Bonanza, etc.

Basically planes that already sell themselves....

No, we are not going to put Van Bortel or Jack Prewitt out of
business, I realize that.

Nor was Rome built in a day. We would like to get started slow, then
maybe over a 5 year time frame, have an established business running.

Not that it matters, but we both sold used cars in college and are
both BA's in Business.

This is a serious question, no flamers please. Van Bortel, Jack
Prewitt, Clay Lacy (all respected brokers) got started SOMEHOW, and I
refuse to believe that with the right mindset, business practices, and
a good plan, the playing field cannot let another newbie come into the
business.

Comments, input, etc wanted

Fly Safe

[Jose]

> we both want to remain connected to aviation and are thinking of opening
> a small aircraft sales/brokerage business, focusing on basic airplanes
> such as Cessna 172/182, Piper Warrior, Beech Bonanza, etc.
> [...]
> I refuse to believe that with the right mindset, business practices, and
> a good plan, the playing field cannot let another newbie come into the
> business.

Find a niche. Here's one I'd suggest - focus on putting people together who would make a good partnership in buying a plane, and then sell them the plane. There are many people who are beyond the FBO, not ready to buy a plane, and the other easy
option is a flying club. It's a good option but has its limits (such as performance and availability), and the next step towards ownership would be a partnership with (say) four or five people. However such a partnership is difficult to find, set
up, and manage, and there are "bad partner" issues that increase the more partners there are. If you made it your mission (and marketed yourself that way, and were good) there's a big opportunity for getting people one step closer to the freedom of
their own airplane.

I'd say that to make this work, you should have connections with A&Ps, and with consellors (of the type that could help determine who would make a good match with whom, and who could be called upon when a partnershp has rough edges). Also, as you
make more connections and create more partnerships, there will be more options for fixing one that goes sour, and a possible "upgrade" route for individual partners.

Where are you located?

Jose
--
for Email, make the obvious change in the address
Note - Since the OP is crossposted to r.a.misc and r.a.owning (which I don't follow) as well as r.a.piloting (which I do), I posted the reply to all three groups. For me to see replies, include r.a.piloting in the list.

[Matt Whiting]

Bill wrote:

> (Looking for serious replies please...)
>
> I am a ATP pilot with a general aviation background, and am growing
> tired of the insecurity of the (no matter where you work) "pro pilot
> job." Pagers, on call, no real vacations, etc, etc.
>
> Another friend of mine, also an ATP, feels the same way. However we
> both want to remain connected to aviation and are thinking of opening
> a small aircraft sales/brokerage business, focusing on basic airplanes
> such as Cessna 172/182, Piper Warrior, Beech Bonanza, etc.
>
> Basically planes that already sell themselves....
>
> No, we are not going to put Van Bortel or Jack Prewitt out of
> business, I realize that.
>
> Nor was Rome built in a day. We would like to get started slow, then
> maybe over a 5 year time frame, have an established business running.
>
> Not that it matters, but we both sold used cars in college and are
> both BA's in Business.
>
> This is a serious question, no flamers please. Van Bortel, Jack
> Prewitt, Clay Lacy (all respected brokers) got started SOMEHOW, and I
> refuse to believe that with the right mindset, business practices, and
> a good plan, the playing field cannot let another newbie come into the
> business.
>
> Comments, input, etc wanted

What will you offer that they don't? That is the key determinant of
your likely success or failure. It is hard for "just another" business
to join a market. You need an angle such as Wal-Mart with their low
prices spurred to a large degree by their business model of vendor owned
inventory, for example.


Matt

[Newps]

Jose wrote:
>> we both want to remain connected to aviation and are thinking of opening
>> a small aircraft sales/brokerage business, focusing on basic airplanes
>> such as Cessna 172/182, Piper Warrior, Beech Bonanza, etc.
>> [...]
>> I refuse to believe that with the right mindset, business practices, and
>> a good plan, the playing field cannot let another newbie come into the
>> business.
>
>
> Find a niche.




Exactly. Piper Cubs, Cessna 180/182/185/205/206. Stick with these and
people will beat down your door. They are also recession proof. Take
in the occasional cherokee on trade but only when the economy is good.
These things have a knack of sticking around the lot. I bought my plane
from Stancil in Placerville, CA. I have been watching his site for the
last 6+ years. The turnover is fantastic, although he doesn't deal in
Cubs. He's got a 1976 Warrior that he can't get rid of, now the price
is lowered to $38.5. Same for a cherokee 6, although that one has 8.50
mains, and a 73 Arrow. http://www.skywagons.com/shop-mall.html

[aluckyguess]

"Matt Whiting" > wrote in message
...
> Bill wrote:
>
>> (Looking for serious replies please...)
>>
>> I am a ATP pilot with a general aviation background, and am growing
>> tired of the insecurity of the (no matter where you work) "pro pilot
>> job." Pagers, on call, no real vacations, etc, etc.
>>
>> Another friend of mine, also an ATP, feels the same way. However we
>> both want to remain connected to aviation and are thinking of opening
>> a small aircraft sales/brokerage business, focusing on basic airplanes
>> such as Cessna 172/182, Piper Warrior, Beech Bonanza, etc.
>>
>> Basically planes that already sell themselves....
>>
>> No, we are not going to put Van Bortel or Jack Prewitt out of
>> business, I realize that.
>>
>> Nor was Rome built in a day. We would like to get started slow, then
>> maybe over a 5 year time frame, have an established business running.
>>
>> Not that it matters, but we both sold used cars in college and are
>> both BA's in Business.
>>
>> This is a serious question, no flamers please. Van Bortel, Jack
>> Prewitt, Clay Lacy (all respected brokers) got started SOMEHOW, and I
>> refuse to believe that with the right mindset, business practices, and
>> a good plan, the playing field cannot let another newbie come into the
>> business.
>>
>> Comments, input, etc wanted
>
> What will you offer that they don't? That is the key determinant of your
> likely success or failure. It is hard for "just another" business to join
> a market. You need an angle such as Wal-Mart with their low prices
> spurred to a large degree by their business model of vendor owned
> inventory, for example.
>
>
> Matt
>
Not true. If you work hard and take care of your customers any company can
do good. I would say the other most important thing is being properly
funded.
If you have to keep running to the bank the bank will make all the money.
JMHO

[Matt Whiting]

aluckyguess wrote:

> "Matt Whiting" > wrote in message
> ...
>
>>Bill wrote:
>>
>>
>>>(Looking for serious replies please...)
>>>
>>>I am a ATP pilot with a general aviation background, and am growing
>>>tired of the insecurity of the (no matter where you work) "pro pilot
>>>job." Pagers, on call, no real vacations, etc, etc.
>>>
>>>Another friend of mine, also an ATP, feels the same way. However we
>>>both want to remain connected to aviation and are thinking of opening
>>>a small aircraft sales/brokerage business, focusing on basic airplanes
>>>such as Cessna 172/182, Piper Warrior, Beech Bonanza, etc.
>>>
>>>Basically planes that already sell themselves....
>>>
>>>No, we are not going to put Van Bortel or Jack Prewitt out of
>>>business, I realize that.
>>>
>>>Nor was Rome built in a day. We would like to get started slow, then
>>>maybe over a 5 year time frame, have an established business running.
>>>
>>>Not that it matters, but we both sold used cars in college and are
>>>both BA's in Business.
>>>
>>>This is a serious question, no flamers please. Van Bortel, Jack
>>>Prewitt, Clay Lacy (all respected brokers) got started SOMEHOW, and I
>>>refuse to believe that with the right mindset, business practices, and
>>>a good plan, the playing field cannot let another newbie come into the
>>>business.
>>>
>>>Comments, input, etc wanted
>>
>>What will you offer that they don't? That is the key determinant of your
>>likely success or failure. It is hard for "just another" business to join
>>a market. You need an angle such as Wal-Mart with their low prices
>>spurred to a large degree by their business model of vendor owned
>>inventory, for example.
>>
>>
>>Matt
>>
>
> Not true. If you work hard and take care of your customers any company can
> do good. I would say the other most important thing is being properly
> funded.
> If you have to keep running to the bank the bank will make all the money.
> JMHO

Suit yourself, but if all of the other companies are working hard and
taking care of their customers, then you doing the same as them won't
likely make you a big success as folks will always go with the company
with a long track record all else being equal.


Matt

[Doug]

Buy an airplane and then sell it. Simple as that.
Oh, try and sell it for more than you paid for it. Not so simple after
all.
But really, that's all you have to do. Call the expired TAP ads and
see if they are still interested in selling. Offer them 20K less than
you think you can sell it for. Remember, airplanes are easy to buy,
and hard to sell.

(Bill) wrote in message >...
> (Looking for serious replies please...)
>
> I am a ATP pilot with a general aviation background, and am growing
> tired of the insecurity of the (no matter where you work) "pro pilot
> job." Pagers, on call, no real vacations, etc, etc.
>
> Another friend of mine, also an ATP, feels the same way. However we
> both want to remain connected to aviation and are thinking of opening
> a small aircraft sales/brokerage business, focusing on basic airplanes
> such as Cessna 172/182, Piper Warrior, Beech Bonanza, etc.
>
> Basically planes that already sell themselves....
>
> No, we are not going to put Van Bortel or Jack Prewitt out of
> business, I realize that.
>
> Nor was Rome built in a day. We would like to get started slow, then
> maybe over a 5 year time frame, have an established business running.
>
> Not that it matters, but we both sold used cars in college and are
> both BA's in Business.
>
> This is a serious question, no flamers please. Van Bortel, Jack
> Prewitt, Clay Lacy (all respected brokers) got started SOMEHOW, and I
> refuse to believe that with the right mindset, business practices, and
> a good plan, the playing field cannot let another newbie come into the
> business.
>
> Comments, input, etc wanted
>
> Fly Safe

[Darrel Toepfer]

Doug wrote:
> Remember, airplanes are easy to buy, and hard to sell.

We've been just the opposite...

Guess we're those pesky picky tire kickers...

Drove over 10k rental car miles in 1.5 years looking at planes in just 2
states (Florida & Ohio). Bought 3 planes in that span of time, 2 within
40 miles of home...

[Jose]

> Buy an airplane and then sell it. Simple as that.

Nope. Sell the airplane and then buy it. That way you're never stuck holding the bag.

Jose
--
for Email, make the obvious change in the address

[Dude]

Are you insane?

If you make 10% on each plane, and then have to eat a loss because of a bad
buy or something, it can wipe out a lot of other deals. Seriously, buy a
172 for 45. Spend 2 on it, and sell it for 53. Now, find out you need 10k
in repairs to get your money out of the fourth one - and it starts to look
lame. Now, try to make 15%, and listen to both sides squeel like pigs.

Also, Van Bortel distributes/sells a lot of new Cessna's, so he has
relationships with lots of FBO's and schools that way. Those relationships
multiply.

Add in the fact that you are now despised and mistrusted by most of the
population because you are now a salesman. You can look in the archives here
about how most folks think about brokers and sales people. If you want to
know real frustration, go try to buy a plane from someone who is NOT a sales
person. I have heard sales people tell a few whoppers, but plane owners
take the cake by far. Still, its the sales people that get hated.

If you are not sufficiently discouraged, then know that the world does not
need more brokers that are not full service. Have a maintenance crew and an
interior crew that can fix your planes before and AFTER you sell them.
Standing behind your planes with a warranty can't happen if you can't fix
them.

The only other thing I can think of is opening a consignment lot may be the
way to go. Start an FBO where the ramp and hangars are dirt cheap, and let
people put the planes there for sale for a fee.

[OtisWinslow]

"Newps" > wrote in message
...
>
> He's got a 1976 Warrior that he can't get rid of, now the price is lowered
> to $38.5. . http://www.skywagons.com/shop-mall.html
>

What's wrong with it? When I was looking for my Warrior a few months back
every
time I'd find a good prospect it would be sold in a day or two.

[C Kingsbury]

"Dude" > wrote in message
...
> Are you insane?

My thoughts exactly. Most brokers deal in 150-200K+ planes because that's
wher you start to have a little room to build in a margin for yourself.

IMHO the biggest opportunity out there right now is in LSA (light-sport
aircraft). But all the money there is going to be in service, just like car
dealers now that grandma knows how to look invoice prices up on the
Internet.

Can you afford to put any money down on anything? Or were you just hoping to
spend your off days by a telephone trying to make deals?

-cwk.

[Capt.Doug]

>"Bill" wrote in message > Comments, input, etc wanted

Learn the business from a mentor.

Anyone can make a good hit, maybe several hits. However, to sell aircraft
full-time without losing everything to the lawyers of a disgruntled
customer, you need to know the intricacies of the business. For example,
where would you find out if there is a state income tax lien against an
airplane you represent? The FAA doesn't record tax liens. The new owner will
be hit up for the lien. The new owner will hit you up for reimbursement. The
end result is that you lose money. Another example is if you broker an
airplane and the DEA confiscates it for alleged illegal practices of a
previous owner. The DEA can do that, and the new owner can seek
reimbursement from you. The end result is that you lose money.

D.

[Newps]

OtisWinslow wrote:

> "Newps" > wrote in message
> ...
>
>>He's got a 1976 Warrior that he can't get rid of, now the price is lowered
>>to $38.5. . http://www.skywagons.com/shop-mall.html
>>
>
>
> What's wrong with it?

Must be something, it's been on the lot for at least 6 months.

[Robert M. Gary]

(Bill) wrote in message >...
> (Looking for serious replies please...)
>
> I am a ATP pilot with a general aviation background, and am growing
> tired of the insecurity of the (no matter where you work) "pro pilot
> job." Pagers, on call, no real vacations, etc, etc.

I think the biggest problem is that there is a much higher expectation
for brokers than private sellers. If someone buys a plane and then 30
days later realizes that there is some expensive problem, they will
expect you to take some ownership of the problem. You may decide not
to but you will get a rep for selling crappy planes. Also, when
someone comes to buy a plane they expect it to have less issues at the
door from a broker than a private party. There is an outfit out of San
Antonio that is a Mooney broker. They frequently write in the Mooney
rags about the increased costs of a broker. Sometimes they can eat a
deal just on unexpected delivery expenses.

-Robert

[Cherokee6]

Bill,

I looked into this a while back. Here were my conclusions.

My going in assumptions were that all businesses that succeed tend to do it
in one of three ways..

1. Add compelling value vs competition.
2. Assume equivalent risk at a lower cost than competition.
3. Do something for which there is no competition.

As a sell side broker without inventory:
It is hard to add value by increasing exposure, simply because anyone
can put an ad on controller, aso, etc themselves.
It is hard to add value by taking the phone calls, simply because at the
low end someone isn't going to be willing to pay you enough to cover your
fixed expenses.

It is hard to add value by specializing in a particular set of planes
(thus becoming the "go to" place to buy one), simply because the volume of
turbo bugsmasher XYZ's sold in a given geography typically isn't very
high.

OK, so if it is hard to add value to the seller, how can you add value to
the buyer?
Providing a warranty (taking risk) was the obvious answer.
Unfortunately, all my A&P friends tell me it is impossible to estimate with
any certainty whatsoever what the claim profile for a given plane
will be, even if an annual has just been done. Apparently, failures in
mechanical parts and avionics are just too random to predict. This
means that you cannot insure against these losses.

This leaves one alternative:

Assume risk by trying to "buy low, sell higher". Very, very challenging
because it requires you to accurately forecast not only the direction of the
market, but also your carrying and most importantly repair costs while
holding the inventory.

My conclusion from all of this was that becoming broker wasn't such a hot
idea vs other opportunities. Not that you can't make money at it, it just
didn't seem that attractive to me.












"Bill" > wrote in message
m...
> (Looking for serious replies please...)
>
> I am a ATP pilot with a general aviation background, and am growing
> tired of the insecurity of the (no matter where you work) "pro pilot
> job." Pagers, on call, no real vacations, etc, etc.
>
> Another friend of mine, also an ATP, feels the same way. However we
> both want to remain connected to aviation and are thinking of opening
> a small aircraft sales/brokerage business, focusing on basic airplanes
> such as Cessna 172/182, Piper Warrior, Beech Bonanza, etc.
>
> Basically planes that already sell themselves....
>
> No, we are not going to put Van Bortel or Jack Prewitt out of
> business, I realize that.
>
> Nor was Rome built in a day. We would like to get started slow, then
> maybe over a 5 year time frame, have an established business running.
>
> Not that it matters, but we both sold used cars in college and are
> both BA's in Business.
>
> This is a serious question, no flamers please. Van Bortel, Jack
> Prewitt, Clay Lacy (all respected brokers) got started SOMEHOW, and I
> refuse to believe that with the right mindset, business practices, and
> a good plan, the playing field cannot let another newbie come into the
> business.
>
> Comments, input, etc wanted
>
> Fly Safe