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Is Selling Your FBO A Perilous Process?

By John Enticknap, President, Aviation Business Strategies Group

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” - Niccolo Machiavelli

According to Machiavelli, selling your FBO can be a perilous process. But in my experience, you can even out the bumps and curves by developing a logical plan, well enough in advance, that will lead you to a successful transaction.

Let’s start at the beginning

There are many reasons why, after numerous years of dedicated work, you have decided it’s time to sell your FBO:

  • Retirement is the number one reason.
  • Harvesting your business for the next investment.    
  • Partnerships Issues.
  • Illness or death.
  • Becoming overworked.
  • Boredom—looking for a new change.
  • An uncertain future.

Before we move forward and discuss the sale process, we need to make some basic business management decisions. We need to review the business as a buyer would, i.e.: Will my investment be worthwhile--short term and long term?

Here’s a buyers view:

  • What is the ROI?
  • Will the value of the deal enhance my existing business?
  • Is this a new business venture and add value?
  • What alternatives do I have to invest elsewhere for better returns?
  • Does the deal satisfy my business, financial & emotional ideals?

In addition, we need to review the business and make necessary adjustments to enhance the profitability and make the business more attractive to potential buyers. We do this by increasing the term of the lease, removing excess debt or amounts due to the owner/partners and removing excess owner expenses.

In addition, we need to pay attention to:

  • Increasing profits.
  • Maintaining consistent income figures.
  • Retaining a strong customer base.
  • Major contract(s) that span several years.
  • Meeting with your tax folks and discussing capital gains and a sale structure that will minimize your tax consequences.

Although we’re asking you to put in a lot of up-front time and preparation, these concepts and business practices will benefit you and your business and position it for a sale to maximize the value, not only for you, but the buyer.

Before we look at valuation, we should examine the timing of the sale. To effectively complete the items we discussed previously, the decision to sell should be planned well in advance, at least a year or two out. The preparation will improve your business and make the business records appear to be in order in addition to the basic structure of the FBO.

These improvements also will allow you, as the owner, to transition out of the business. Like many small businesses, the FBO owner is intrinsically invested in the business, not only financially, but emotionally as well. The business has become your life. By separating yourself slowly from the business, you will be in a better position to sell and view the transaction as a business deal.


As an FBO owner, you have seen what has been going on in the industry with the continued consolidation of the FBO business over the last 15 to 20 years. You’ve also undoubtedly been exposed to the term ‘multiples’ when it comes to evaluating the sales price of an FBO.

I’ve written in a previous blog about valuations as a multiple of your earnings before depreciation (EBIDTA). Say your FBO has earned $850,000 on average the last couple of years (before depreciation). If you were to value the business at a 7.5 multiple, then your FBO would be worth $6,375,000. Or to look at it another way, if a buyer bought your business it would take 7.5 years to make the investment back, assuming all business aspects stay the same!

Now, we need to look at the value of your lease. Generally, the longer the term of the lease, the better the value. If you only have 5 years to go, the above scenario would not work!

Here, in general, are the various line items that add value:

  • The length of your lease term must be at least 10 years. Twenty plus years is ideal.
  • Physical assets: hangars, real estate, option years, terms in your lease, minimum standards--all these items affect value.

Get an expert to help you. We would not recommend hiring the local commercial real estate appraiser as they usually do not understand how to correctly appraise an airport property.

Airport leases are unique and the major value in your business. It outlines what you can and can’t do; establishes fees and charges; the rules of competition; capital investment requirements, and in many cases, determine whether or not your business is going to be successful.

Preparing Your Documents

Once you have determined what your selling price will be, you’ll need to put together a list of the documents a buyer will want to review prior to making an offer. In today’s electronic environment, you can establish an electronic document “room” where you have put several years worth of profit and loss statements, balance sheets, listing of assets, lease documents, etc. These should all be easily accessible and ready for review.

A Non-Disclosure Agreement should be prepared by your attorney or broker. Once a prospective buyer signs the agreement he can have access to your financial data. Remember to give a specific time frame to review and make an offer and don’t let the sale process drag out too long. If a buyer reviews the data and is not interested, you need to move on.

Finding a Buyer

Whether you use a broker, or you find prospective buyers yourself, the process can be challenging. Selling your business is like any other business deal; if you’re lucky it can be done in months. However, in most cases, a deal will take anywhere from six months to a couple of years.

In today’s business environment, deals are tending to take longer. Buyers are being more diligent and making sure their investment will be the correct decision. Once you have prospective buyers, keep the process moving along:

  • Line up two to three potential buyers, just in case the initial deal falters.
  • Stay in contact with potential buyers throughout the process.
  • Find out if potential buyers prequalify for financing. Don’t do a deal and then find out the buyer can’t close!
  • Allow for negotiations, but keep in mind your end goal both financially and emotionally.
  • Put agreements in writing. Get a professional attorney to assist with the development of a Purchase and Sale Agreement.
  • Be very cognizant of the terms of the assignment clause in your airport lease.

Closing the Deal

Note: Keep the sale process moving along! We’ve seen many a deal come apart due to the negotiating parties getting tied-up in the deal process. They want to do a deal for the deals sake! Your goal is to sell your FBO on reasonable terms and conditions. If your buyer gets too demanding and bogs down the negotiations, end the discussion and move on to another buyer.

Keep your Goal in Mind

Selling your business is time consuming, difficult and can be as stressful as running your business. Keep in mind some of the concepts we have discussed in this article.

You have planned for change throughout all stages of the ownership of your business. Finding the right professionals to facilitate the process is essential. It will ensure you’ll get the most from your business and secure the retirement you’ve worked for all your life.

Please give me your comments on this article or other subjects you would like to discuss. Contact me at Please note: Many of these topics are discussed in our NATA FBO Success Seminar. The next seminar is scheduled for March 11 and 12 in Las Vegas. Please go to

About the authors:

Ron Jackson
Ron Jackson is Co-Founder of Aviation Business Strategies Group and President of The Jackson Group, a PR agency specializing in FBO marketing and CSR training. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of “Mission Marketing: Creating Brand Value” and co-author of “Don’t Forget the Cheese!” the ultimate FBO Customer Service Experience. Ron co-developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for titled: The FBO Connection. 

John Enticknap
John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including President of Mercury Air Centers network of 21 FBO locations. He is an ATP and CFI rated pilot with more than 7,800 flight hours and is the author of “10 Steps to Building a Profitable FBO”. John developed NATA’s acclaimed FBO Success Seminar Series and writes an industry blog for titled: The FBO Connection.

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things

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