You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your flight school. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a flight school?
The startup expenses associated with opening a flight school business are sizable. Major upfront costs include:
- Purchasing an office and classroom space
- Purchasing a hanger
- Purchasing airplanes
- Paying for liability and property insurance
A school will also have to buy fuel and pay instructors’ salaries, but these expenses can often be covered with students’ initial payments.
Altogether, the startup costs listed above easily reach six, and sometimes seven, figures. Most business owners must take out a loan to pay for all of these expenses.
Some business owners decide to minimize the capital (and, therefore, the size of the loan) they need by leasing office, classroom and hangar space, and airplanes. Leasing, however, doesn’t let a business build up equity in its assets.
What are some insider tips for jump starting a flight school business?
Choosing a good location is essential to a flight school business’ success. Most areas can’t support many flight schools, so the ideal location is usually an airport that doesn’t yet have a flight school. The Federal Aviation Administration (FAA) maintains a directory of flight schools that interested entrepreneurs can use to check for schools near them.
Starting out, it can be tempting to offer low prices in order to attract students. Giving students deals on flight lessons, or even individual flights, can devastate a flight school business, though. Even partnering with daily deal sites to provide discounts on “discovery flights” could cost a business $90 per flight. Business owners should have a firm grasp of their operating expenses and required margins, and they ought to set prices accordingly from day one.
Instead of lowering prices to attract students, flight schools can help potential students look for scholarships and grants that may reduce their out-of-pocket. The FAA has a directory of scholarships and grants that students might qualify for.
Another way to lower the entry cost for students without reducing per-hour rates is by offering training for a sport pilot license. A sport pilot license typically takes only 20 hours of training, which is about half of the training required to become a private pilot. Thus, the costs for students can be cut by about 50 percent while still covering the school’s ongoing expenses.
What are the ongoing expenses for a flight school?
The ongoing expenses for a flight school business, like the startup costs, are significant.
Maintenance costs are one of the largest ongoing expenses and can significantly decrease a flight school’s profits. To keep maintenance costs manageable, business owners should look for an airplane mechanic who will offer the school reduced rates in exchange for regular work.
Other significant ongoing expenses include lease or mortgage payments for a building and a hangar, fuel costs, insurance premiums and instructors’ wages.
Who is the target market?
A flight school business’ ideal customer is someone who has interest in flying and is wealthy. Learning to fly isn’t cheap. Usually, only individuals who have a decent amount of discretionary income are able to afford the coursework.
How does a flight school make money?
A flight school business makes money by charging students for training. Training typically consists of classroom instruction and one-on-one flight time with an instructor. Students who need additional training beyond the typical coursework may be charged on an hourly basis for one-on-one lessons with an instructor.
How much can you charge customers?
Training for a private pilot license costs most students between $6,500 and $12,000. These figures include exam and materials (e.g. flight computer, log book and navigation plotter) costs, but these are relatively small expenses. The vast majority of these sums goes to the flight school business and instructor that provides training.
Training costs are sometimes broken down into hourly rates for the instructor and for using a plane. For example, a student might pay $40 per hour for an instructor’s time, and $120 per hour for use of a training plane. (These are just example amounts; hourly rates vary).
How much profit can a flight school make?
Because flight school businesses have sizable ongoing costs, their profit margins aren’t too high. A well-run flight school in an area with many potential students, however, can earn a respectable profit and pay employees’ salaries -- including the business owner’s salary, if they’re involved in the day-to-day operations of the business.
How can you make your business more profitable?
A flight school business might increase its revenue by offering charter flights and flight tours. If a school owns a hangar, it can also rent hangar space to private airplane owners. Some schools also let graduated students rent planes by the hour or day.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your flight school is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
Federal Aviation regulations designate two types of flight training schools:
- Part 61 requires 40 hours of training but is more flexible in that it doesn’t need to be directly approved by the FAA (though all instructors must be FAA approved). Part 61 schools are typically recommended for part-time students pursuing flying as a hobby
- Part 141 requires 35 hours of training but is much stricter, dealing with regular FAA surveillance and having minimum pass rates on practical exams. This type of schooling is recommended for full-time students pursuing flying as a career
State & Local Business Licensing Requirements
In addition to federal regulations, flight schools will typically have to apply for a flight school license from their respective states. An example of a license application can be found here.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Certain local licensing or regulatory requirements may also apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a flight school
A flight school business caters to a particular demographic: customers are generally wealthy, located in the area and interested in flying. Targeted online advertising is an effective way to reach these potential customers, as targeted ads let businesses specific exactly who they want to show ads to. A business may want to complement a targeted online campaign with advertisements in flying-related publications and at local airports to increase visibility.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
A flight school business can distinguish itself from other flight schools by providing the highest level of training possible. Making sure all students pass their exams will give prospective students confidence in a program. Encouraging instructors to obtain advanced training or seek out awards can also help set a school apart from others, although a school may have to pay instructors who have additional accolades higher salaries.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Flight School In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Running a flight school requires knowledge of flying and airplanes. Even if a business owner isn’t the person taking students up in planes or servicing the school’s fleet, they still need to know enough to accurately assess instructors’ abilities and make wise decisions regarding the maintenance of planes.
Because a knowledge of flying is extremely helpful, experienced and former pilots are particularly well qualified to open a flight school business. A flight school business might be a good venture for a pilot in the armed forces who is leaving active duty, or a commercial pilot who would like to retire from the industry and stay home more often.
Business owners don’t technically need experience as a military or commercial pilot to open a flight school business, but the experience can be a great help.
What happens during a typical day at a flight school?
Starting out, a flight school business owner may double as an instructor. Successful business owners, however, spend more of their time running and growing their business than teaching individual students.
A flight school business owner’s daily activities can vary a lot from one day to the next. On any given day, they might:
- Have to address a maintenance or repair issue with a plane
- Manage and schedule instructors
- Promote classes to prospective students
- Bill and collect payment from current students
- Ensure students are satisfied with their training
- Schedule exams and relay scores to students
What are some skills and experiences that will help you build a successful flight school?
Flight school business owners who don’t have previous experience as a pilot may want to get a private pilot license so they have first-hand knowledge of the service their business is offering. Flying isn’t the only aspect of the business that owners should be familiar with.
Business owners will have to make a number of significant decisions, such as what planes to acquire, which instructors to hire and when to schedule classes. Working at another flight school, even if just as an administrative assistant, for several months will give a business owner some experience to draw on when making these decisions.
Business owners may have trouble getting a position at a nearby flight school, as their school could be competition for the nearby school. A flight school in a different region, however, may be willing to hire someone who’s hoping to enter the industry -- as long as their school will draw students from a different area.
What is the growth potential for a flight school?
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
How and when to build a team
A flight school business needs multiple instructors from the outset, in order to cover all of the costs associated with running the business. Just one or two instructors usually can’t teach enough students to cover all ongoing expenses and earn a decent profit.
Most certified flight instructors make between $25 and $50 per hour, receiving less than 50 percent of the billable costs paid by students. They may work as employees of the business or independent contractors.