What about an air taxi service flying Cirrus SR-22GTS aircraft out of Montgomery?
After all, these guys appear to be making it work:
Despite a drop in air travel stemming from the weakened economy, Atlanta-based ImagineAir is seeing a boom in business.
The air taxi service, which flies throughout the Southeast, saw its number of flights climb 117 percent last year — with sales jumping by 90 percent.
While airline industry-analysis firm Boyd Group International Inc. predicts the nation’s airlines will carry 6.6 percent fewer passengers this year than in 2008, ImagineAir President Ben Hamilton sees a prettier picture for his company.
“We basically doubled our business from 2007 to 2008, and we think we can easily double that for the rest of the year,” Hamilton said.
And so do these guys up in the Bay Area.
Would it be worth a pay cut on salary that’s increasingly eaten up by taxes to have my own business doing what I love?
Because a part of me says, yes. Yes it would be.
Yeah. But find a way to get a sampling of the demand in your AO. As they say, gotta go where the demand is. And location, location, location. Go for it.
Risk/ Reward is the captalist way…a sound business plan, finantial backing…parthers ? maybe ( be extremely careful here)… master of your own domain…no better feeling wilist in a vertical position…whats not to like? worth exploring… trust me…the might have beens can eat you up….Best
You could come up here to Oregon and fly Pilatus PC-12′s between Portland and Astoria several times a day:
http://www.seaportair.com/aircraft/
http://statesmanjournal.com/article/20090317/BUSINESS/903170349/1040
That sounds like fun and those are cool planes. Heard a PC-12 pilot talking with Socal Approach on Saturday as we were coming back from Big Bear in the goo.
Depends on what you mean by “worth,” sadly. Get that business up to the point of making $250,000 and you have the same taxes problem (if you set it up as an LLC small business).
Nahhhh. You’re confusing cash-flow with profit. You are taxed on profit, not cashflow. The aim is to have as little profit as possible to avoid those bad ole corporate taxes. This doesn’t mean you DON’T pay taxes, you do. Sales taxes, use taxes, payroll taxes, property taxes, and so on….but those are all expenses…on which the corporation does not pay taxes. So the rent, the lease payments, the equipment purchases, the paper clips and staples, the payroll, the fuel, the phone and light bill, the tools, the repairs, the upgrades…need I go on? Those are all expense items…which mean no corporate income tax. Now the goal is to have just enough MORE income than expenses.
(aside: the above applies to Texas. Other states may figure their tax structure different. For my business, payroll and associated taxes are the biggest expense, followed by health care and rents. Everything else is relatively a nit that has to be tracked.)
The best thing my accountant did was set me up as a full “C” corp, but there are advantages to other types based on the business. As a “C” corp, my corporate and personal taxes are totally separate from each other which is not true for certain other corporate types. If you are serious, find yourself a good TAX ACCOUNTANT, one who specializes in corporations. You’ll be glad you did. (If you come to Texas I’ll introduce you to mine.)
Yes, yes it would. I agree.
Change you can believe in. Wait, you best be careful there.
Lex:
Email me; I can put you in direct touch with who you need to talk to; plus I own and fly an ’06 SR22G2 GTS and know several local (to you) Cirrus pilots.
VR,
Comjam
You asked…and the expcted and well meaning advice comes from the glass half empty set…
…a sound careful analysis of the proposed venture ( don’t talk yourself into it) consultations with people whose judgement you trust and professional, e.g. legal/accounting/tax advice concerning the structure of the venture will go a long way in helping to ensure its success while also helping you to sleep at night ( your going to need your sleep )… as to tax issues, if/WHEN your successful… we should all have such problems…as the Aussies so eloquently and on every occasion immaginable like to say …”no worries Mate” …play it out… Best
In 1976, when we were in Upper Bucks County, PA, there was a local guy who flew 2 passengers (max) plus light luggage down and back to the Philly Airport for not much money per trip (or we couldn’t have done it), but he made a good living at it. I have no idea what kind of plane except it was Small! There was no pavement, just a grassy field/pasture with an extra person on the ground to shoo the pheasants out of the way.
It wasn’t all that comfy & was noisy as all getout, but it really beat driving down through Philly to make a flight at weird hours.
Sounds like this would be right up your alley, Lex, & you wouldn’t have to worry about the pheasants.
What?! There’s no pheasants in California?
Seriously, what Snake said. Cuz he ssssaid it sssso well.
Somehow, I expect Lex would have pavement & not worry about the pasture.
Was always my plan to retire from the Nav and go fly seaplanes to the Bahamas for Chalk’s. . .then they went TU.
I say yorta do something you love, while you still can. That cubicle farm contractor job will be there when and if you want it back.
There are two FBO’s that make it work at our airport since they not only charter flights in King Airs, Stationaires, Caravans and Seminoles but they also rent the aircraft to maintain usage.
It took a few partners with $ to it going though.
(Unfortunately, the name LexAir has already been taken)
I know a guy who’s involved in a Cirrus-based air taxi service (East Coats)…can put you in touch with him if you’d like to get his perspectives.
I don’t understand why this particular aircraft is a good choice, though. Very limited in pax and baggage, not cheap…is the ballistic parachute really that much of a selling point?
I was very much convinced that Eclipse Aviation was going to make a big impact on how people travel. I imagined competitively priced point-to-point alternatives vs. today’s hub and spoke air alternatives. With the benefit of hind-sight I realize the problems with Eclipse – however I think the dream of convenient and competitively priced point-to-point travel is still out there for a lot of travelers like me.
If you can be part of the answer to this dream, sounds like a winning combo to me.
As far as letting you down gently, another operator to review would be BlueSky out of Illinois. Sadly one of their Cirrus aircraft had a fatal accident in Northern Wisconsin last fall.
This is what the Eclipse 500 VLJ was made for, in fact one customer alone that was setting up an similar Air Taxi service in Florida and in the Boston area were there biggest buyer. Something like 12oo aircraft. They even received a certification for a single pilot in the cockpit. They wanted the right seater to backup on checklists and then hand out snacks and drinks once wheels up!!!
They are now going through the bankruptcy thrashing process right now. Not sure what will remain when that is done, rest assured it will be ugly.
BT: Jimmy T sends.
Not surprisngly, a website for everything these days…
“Air Taxi Industry Updates ” – A discussion of air taxi and charter law, operations, news, and insights.
http://www.airtaxilaw.com/
It’s great (at times) owning your own business. Also tougher than most things. When things are good, they’re really good. When things are bad, they’re really bad. A couple of points.
Like above, have a really good CPA
Partners, choose them very carefully, then think about it again. All responsibilities, duties, etc must be on paper.
Don’t start without adequate funding. Do your biz plan, figure out how much money you need, then double it.
Unless you grow your employees, vacation time equals no or little pay.
At times you’ll work 3 times harder for half the pay.
SBA is a great resource, have some plans specifically for vets. Also check out score.org a great resource.
Bottom line, pick the right business, have funds in place, work it like no-one else has, a little luck and it’s the best thing since sliced bread.
Good Luck
Claudio/
As it appears you own your own business, perhaps you can appreciate the fact that the business with which my wife and I made our money in–enough to retire early–was started while we were deep in Chapter 13, having been driven there by an unscrupulous employer. Talk about tough! But we didn’t have any choice but to press on, failure was not an option…
As you might expect, it was very much touch and go–certainly helped that we had the energy of youth–and good health. Not so sure we’d be up to it today….
I should have added that my comments were by no means a recommendation to use our approach as a business model! LOL I can’t think of a better way to start off behind the eight-ball than our way. The old “I’d rather be lucky than good” bit applied, I guess….If we had known then what we know now, etc., might never have happened….just too stupid to not try…
Virgil,
No surprise at all. Adversity is an excellent incubator. I’ve started 4-5 businesses starting about 9 years ago, while still in the Navy. All lessons above from personal experience. Some successfull, some not so, but plenty of lessons learned. Just shut one of them down (used car lot) since the numbers are just dreadfull across the industry. Other car related business down 50% from last year, which was about 20% down from previous year. Just started another one (scooter shop) which is growing. Construction…what can I tell you, it’s hard to make a buck. Most bigger builders are bidding stuff at cost just to keep their crews (or most of them) busy and employed till things improve. For us smaller guys, tough to do that.
But, like you said, sometimes you just have to do it…Or I’ll have to do what I don’t want to do is get a real job. Less work, at home more, steady paycheck…but last resort. Although my wife would prob prefer that.
congrats on your success.
Lex/
You’ve got the knowledge, smarts, and time–but is the family REALLY on board? You’re risking their future, as well. All the advise from the others–good CPAs (vital!) etc., is good–but the capital requirements for your deal are what will eat you alive. Best rule of thumb? Figure ABSOLUTE MINIMUM you need to survive the business for 1 year (NOT six months) then double it–then double it again. THAT resultant number will probably be closest to the realistic one. S**T Happens….
Classic example? Friend of mine left Hallmark as an executive, bought a couple of his own franchise Hallmark stores with non-compete clause and all. Had his own profitable show in two small strip centers with plans to expand off of that. Then forces out of his control hove on the scene. The major anchor in one center (A Krogers) moved out to a new place down the road and was not replaced–Krogers kept paying the lease to keep it vacant as was cheaper than letting a competitor move in old place, and there went his ancillary foot traffic–and his profits.
Things went South in the other Center as well shortly thereafter when Hallmark broke the non-compete clause and installed their generic “American Greetings ” series in THAT mall’s main anchor–and there went THAT ancillary foot traffic. He lost his cash flow and went Chapt 7 quicker than he could get Hallmark into court. Moral? My guy was smart, energetic, experienced, had a good business plan, reasonable amount of cash and a very good couple -three years out of the chute, but the storm clouds eventually arrived. And you know what they say about being able to change the weather. Some risks are not only unforeseeable, but uncontrollable. You really can lose it all no matter how smart, energetic and seemingly farsighted and realistic in you’re planning.
On that happy note, I’ll take my leave….
Just a few quick random thoughts/questions that came to me as I read through these excellent comments:
1. Undercapitalization of an otherwise sound business/ plan (no staying power ) is the single greatest cause of a business failure…you must have the ability to hang in there ?
2. Partnerships are like a marrage without the sex…be very, very carfull about just who you jump into bed with ( e.g. I’m currently in the very messy/nasty process of unwinding a LLC that I created just two years ago… the LLC in happier days was called “The Three Amigos”…don’t ask)
3. Are you prepared/ have the testicular fortitude /mentally wired to accept , without the benefit of an institutional safety net…(the Navy /your current job)….the level uncertainty, responsability, assumption of debt and financial risk inherent in starting up and operating your own business ?
4. And finally and most importantly…are your Bride and kinder part of your plans ?…do they buy into it?… is there a place for them in the business ?
…oh and one final …actually its a seminal question… do you want this as much as you wanted to fly jets for the Navy when you were a kid ?… Best
Umm…guys. The title was “Ease Me Down Gently” not “Hit Me In the Face With the Wet Mop”.
Although good advice. Sometimes you get to do what you love, more often, you get to do what you like.
Lex: Air Taxi in the Varga?
I knew a guy from my childhood neighborhood who has an air taxi business out of Moffat Field here in the Bay Area, the name of the company rhymes with “merry air”. Thing is, he used to be a pilot for a short time in the Navy until he put an F-14 in the drink at the end of the runway at NAS Alameda back aroun ’86ish. Wonder how HIS business is doing! Gots to be good for those that don’t have a pilot with pre-augering experience at the stick I’d imagine. So, you gots that goin’ for you… should be ahead of them in no time I’d imagine!