I just finished attending two state shows, Arkansas and Texas, with the Mississippi convention coming late this week. If attendance at Mississippi is anything like Arkansas and Texas shows, it will be a good one. Graham has and will make more state shows than me this year, something that has been coming for the last 35+ years. I kind of regret slowing down, but there is a time for everything.
I had an ag operator ask me this month for advice on selling his business. I’m not sure why he asked me, other than I did “sell” my flying service 37 years ago to my competitor. I clarified to him that maybe I was not the one to be advising on this matter, but I would anyway.
To start, there is no set formula for selling a flying service that I know of. Sure, it’s worth the wholesale value of the hard assets, but how do you calculate any blue sky value? To be brutally honest, blue sky is worth whatever you can get for it. If nothing else, remember what an Arkansas operator told me after he had sold his very successful flying service; “You can’t sell a broke business.”
At the time, I hadn’t thought of selling a business in this context. I had sold mine for the grateful pay off of my loans. Of course, my flying service, by no stretch of the imagination was profitable. It was a great opportunity for my competitor to consolidate my customers into his business. My customers amounted to about half the number of his. He quickly sold off my junk airplane and support equipment, rolled my customer base into his, and gave me a flying seat to work with and everyone was happy. Being happy is a crucial element for both parties and should be strived for in the transaction.
Another element to consider is how long you are willing to stay with the flying service after the sale. Considering all the years you worked to build the business, watching the new owner call the shots can be painful. I advise minimizing the time you hang around after the sale, which brings on another component: will you be financing the deal?
I have only touched the surface of many aspects of selling a flying service. Several factors affect selling a flying service, with the ones above being some of the more critical ones. It would be best if you took a quiet moment to list all the parameters, don’t hesitate to list as many as possible. Some things you list will not matter, but the others will determine the outcome.
In parting, try to ask for blue sky in a reasonable amount, reflected by how the buyer can sustain the debt. If there is any way possible, part ways as soon as possible with what was once your flying service. I know I haven’t imparted a spectacular formula for selling a flying service. It is like I told the operator asking me about it, he has to make a hard evaluation of what he wants with a fair outcome.
Until next time, Keep Turning…