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1.0 Executive Summary
The purpose of this business plan is to showcase the continued development and expansion of an air charter service based in Bevely Hills, California. Air Charter Service, LLC (“the Company”) was founded by Patrick Morrison. The business, through its extensive relationships with numerous private pilots and fleet operators, will be able to arrange both domestic and international flights. At this time, the Company is seeking $275,000, via a private investment, in order to commence operations.
1.1 The Services
Air Charter Service will generate fees equal to 15% of the total cost of the arranged flight. The Company, through Patrick Morrison’s extensive contacts in the aviation industry, can access numerous types of aircraft depending on the client’s needs. Over the next three years, the Company will expand its relationships in order to provide a greater degree of services.
The Company, in order to ensure substantial brand name awareness for Air Charter Service, will implement a wide range of marketing strategies that will create a premium brand name for the business. The Company will also have several retained sales agents that will foster ongoing relationships with corporate travel planners.
Chapter three of this document will further discuss the aviation services that can be sourced through the Company.
1.2 Financing
Management is seeking a $275,000 private investment in order to establish the operations of the business. The terms of this investment can be found in the accompanying private placement memorandum. Primarily the funds will be used for the following:
• Office development in Beverly Hills, California
• Working capital (including for initial marketing operations)
• Furniture, fixtures, and equipment
• Payroll
Once the business establishes a substantial client base, the Company may seek expansion financing either in the form of a loan or as a working capital line of credit. The business will generate highly predictable streams of revenue from its operations. As the business will primarily cater to wealthy people, the business’ revenues will be relatively immune from negative changes in the economy.
1.3 Mission Statement
Air Charter Service’s mission is to become a complete end-to-end solution for both people and companies that need cost effective private air travel arrangement.
1.4 Management Team
Patrick Morrison has over nine years of experience in the field of aviation arrangement. He will be able to properly establish the operations of Air Charter Service while concurrently creating a highly recognized brand name for the business.
1.5 Sales Forecasts
1.6 Expansion Plan
As discussed earlier, the Company will continue to expand it relationships with aircraft fleet operators so that Air Charter Service can provide an immense degree of travel options to its clients. The business will focus heavily on fostering ongoing relationships with large corporations that frequently have executives that need private travel arrangements.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Air Charter Service, LLC. The business is to be registered as a limited liability company in the State of California.
2.2 Required Funds
A total capital investment of $275,000 is needed to establish the operations of Air Charter Service. The funds are to be used in the following segments of development:
2.3 Investor Equity
This matter will be further discussed during negotiation. A preliminary terms sheet and private placement are available.
2.4 Management Equity
This will be determined at a later time and date.
2.5 Exit Strategy
Based on the anticipated profitability of the business, the Company could be sold for up to four times earnings by the third year of operation. However, Patrick Morrison has no intention of divesting the business for at least ten years. In this event, a formal valuation would be completed in tandem with an investment bank that would manage the sale.
3.0 Operations
As stated in the executive summary, Air Charter Service will be principally involved with the arrangement of both domestic and international flights on behalf of its clients. The anticipated revenue per flight will range from $20,000 to $200,000 depending on the aircraft and the distance traveled. The Company will coordinate these efforts with numerous fleet operators and private pilots that will provide the chartered flights.
The Company will produce revenues that are generally equal to 10% to 15% of the entire cost of the charter. More expensive flights will typically carry lower fees.
Moving forward, the Company intends to integrate numerous programs specifically for clients that conduct a substantial amount of business with Air Charter Service. These programs will include monthly retainer fees that will drastically reduce or eliminate the per flight fees charged by the business. These operations will produce highly recurring income for the Company.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the business plan will showcase the current economic climate, the client profile of Air Charter Service, the air charter service industry, and the ongoing competition that the business will face.
At this time, the economy is doing remarkably well. Interest rates, while still somewhat high, are stabilizing. Inflation rates have declined dramatically. The economy is poised for continued growth over the next five years.
It should be noted that that any potential issues with the economy will only have a modest impact on the Company’s ability to genera revenue. The Company is targeted large corporations as well as wealthy individuals as its primary customer base. These entities are far less swayed by negative changes in the economy.
4.2 Industry Analysis
There are approximately 12,000 companies that actively provide arrangements for private flight charters. Each year, these entities collectively generate more than $25 billion a year. The industry employs 48,000 people.
This industry has undergone significant changes over the past ten years. The ability for air charter services to market their services to a broad range of prospective clients throughout the internet has allowed for immense streamlining as it relates to new client acquisition. Additionally, air charter services can better coordinate their flight arrangements through the use of state-of-the-art technology. The Company will use the latest technology in all facets of operation.
4.3 Customer Profile
Among individuals that will source private flights through Air Charter Service, LLC – the following profile is noted:
• Household income exceeding $1.5 million
• Will spend $20,000 to $50,000 per engagement with the business
• Lives within 25 miles of a regional airport
• Will travel with three or more people
For corporate clients, the Company will use the following profile through the course of its marketing operations:
• Annual revenues exceeding $100 million
• Will spend $100,000 per month on private flight arrangements
• Primarily operates in the field of financials services or technology
In this section, you can further refine the demographic profiles that you will target when conducting your marketing campaigns.
4.4 Competition
One of the principal issues that Air Charter Service will face moving forward is that flight brokering is a very competitive business. Given that these businesses enjoy economic stability and high barriers to entry, it is difficult to establish a well-known brand name in this industry. To that end, Management will take a concierge approach to customer services when working with wealthy clients and corporations for their private flight travel needs. The business, to create a differentiating factor, will provide post-flight support including vehicle arrangement as a value-added benefit.
5.0 Marketing Plan
Air Charter Service, LLC will use numerous marketing strategies that will drive substantial interest in the wide range of private flight chartering services offered by the Company. Most importantly, the Company’s internal sales network and direct outreach programs will ensure that the business establishes a well-regarded brand name over the first three years of operation.
5.1 Marketing Objectives
• Target corporate travel specialists in order to develop ongoing relationships with large corporations.
• Maintain a state-of-the-art online platform that showcases all facets of operation.
• Develop an internal sales network with foster ongoing relationships with Air Charter Service, LLC’s targeted demographics.
5.2 Marketing Strategies
As mentioned above, the Company will hire highly qualified sales personnel that will directly approach both large corporations and wealthy people for their private flight needs. These individuals will be provided with competitive base sales as well as ongoing commissions as they expand Air Charter Service’s book of business. The Company will have numerous training programs available so that sales agents understand all facets of the business’ operations and the flight arrangement services that it provides.
The Company’s website will showcase all available aircraft and flights that can be sourced through the business. Over the next three years, the Company will continue to add content-rich information about aircraft and the flight arrangement capabilities offered. This website will undergo substantial search engine optimization in order to ensure that when queries for private flights are conducted, the platform will frequently appear in the body of the search.
As it further relates to direct outreach, the Company will target corporate travel specialists that provide arrangements for executive travel. These individuals often call upon numerous companies to provide flight services. The Company will strive to enter the service roster among numerous large-scale entities throughout the country. To further these operations, the Company will use targeted advertisements on LinkedIn in order to create brand name awareness.
Air Charter Service will also advertise the Company’s services among financial publications, technology publications, and other periodicals that are frequently read by the targeted demographics (both print and online).
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Air Charter Service, LLC will acquire a $275,000 investment.
• The business will achieve a 17% annual growth rate over the next three years.
7.2 Sensitivity Analysis
Air Charter Service, LLC’s revenues are somewhat negative changes to the overall economic climate. As has been one of the central themes of this document, the Company is targeting wealthy individuals and corporations that are far less swayed by negative economic changes. The very controllable fixed operating costs of the Company will further contribute to its stability and profitability.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
