Why does a DZ's boom or bust?

[Deisel 35]

It seems that there are always plenty of DZs opening and closing all over the place. Now that I've been around this sport for more than a couple of weeks, I've seen and heard of quite a few DZs that have failed terribly and some that have done great.

Of course there's a story behind each case so please spare me the drop zone drama. So what are the main causes of DZs that are forced to close up shop? What have been the reasons for the ones that have done well?

Opinions & facts are solicited and welcomed. The "I got screwed" stories, not so much. Thanks in advance.

Oh yeah, I already know that to make a million dollars skydiving that you have to start with two million!

The brave may not live forever, but the timid never live at all.

[npgraphicdesign 2]

I think it's because some DZs attract a lot of people...and some don't.

[Andy9o8 0]

In Catch-22, Milo Minderbinder buys eggs at 7 cents, sells them for 5 cents, and always turns a profit. I know of only one DZ that manages to do that; it happens to be in California. The rest of them go out of business when they do that.

[JohnDeere 0]

You answered your own question.......the good ones started with two million!

Nothing opens like a Deere!

You ignorant fool! Checks are for workers!

[captain1976 0]

Though both are started and run by skydivers, this doesn't mean they know how to run a business.

Running a business is hard work and many don't follow simple rules like having both long and short term business plans.

You see it all the time in other occupations as well. Like a mechanic who decides to open a car clinic. The guy may be a great mechanic but unless he's educated in business management its usually doomed to failure.

Additionally, there are few people who can effectively operate and run a business year after year without eventually getting tired of it. This trend results in a formerly great business to go down the tubes.

You live more in the few minutes of skydiving than many people live in their lifetime

[rhys 0]

Marketing and market research.

No point in opening a DZ between 2 struggling ones, and no point in opening a dz next to a booming one unless you have a strategic plan to gain your market share. the boomer is going to crush you unless you have an edge.

Marketing should be about 10% of a business and those that do set a budget similar to that in an adequate market should do well with reasonable business sence.

Under selling your product is a problem also, sometimes if you arent selling enough, putting the price up and increasing quality and value instead of taking these thngs down may create more interest.

Inexpensive is great but cheap is not! especially in skydiving.

"When the power of love overcomes the love of power, then the world will see peace." - 'Jimi' Hendrix

[cocheese 0]

A great drop zone does what it does so well that you want to return and tell your friends about it.

A bad drop zone does what it does so bad that you don't want to return and you also tell your friends about it.


In the early days, I went to the dz that was open the most. I still go there today.

[jimmytavino 16]

the aircraft !!!!

It makes a huge difference

and can tip the scales the first way
or the second

people willlll drive for the right plane(s) and a DZ can attract fun jumpers of many experience levels ( who can also be considered for staff,, as the place grows ) which helps with student and novice retention..with the proper plane .

A DZO.. with some savvy, and some brains
and a great support staff really helps.
And key people on the dropzone , who by nature ,,,know how to treat treat others in a courteous and respectful way.... never hurts.




jmy
A 3914

[Hvance 0]

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Though both are started and run by skydivers, this doesn't mean they know how to run a business.

This makes perfect sense. To borrow a parallel from another sport I'm involved in (martial arts), I know perhaps half a dozen very talented practitioners. Most of them are also gifted instructors. So they assume that they too can open a studio and it will succeed. They quickly learn the lesson that business experience (or savvy) is non-negotiable.

Regardless of what service you offer, the basic elements of entrepreneurship stay the same. If you can't manage revenue cycles, market efficiently, retain good people, etc. all the talent in world in your particular service isn't going to keep your business afloat.

In specific to dzs, I did a fair bit of research recently looking for where to do my AFF. (Evidently, I'm still new, so correct me if I'm wrong.) The two constantly recurring themes in customers' reviews concerned staff and "vibe."

It's hard to concretize how to improve the vibe of anyplace, but staff selection seems fairly straightforward. There is a distinct difference between an experienced skydiver who happens to coach/tandem and a professional. And it's obvious to customers. Everything from general courtesy to how you explain the procedures is in play.

A quick example: In one of the reviews I read, the reviewer had gone on a tandem and experienced a partial malfunction which required a cutaway. He observed that the TM was calm and in control; he felt comfortable. Some of this is probably the man himself, but undeniably a portion of it is due to how the instructor handled the situation.

Anyway, to cut off my rambling, good people are magnets for business in any service industry. Even factors like price and distance are on the table when staff is considered.

Just what I've seen so far.

I wish Google Maps had an "Avoid Ghetto" routing option.

[billvon 2,396]

>A great drop zone does what it does so well that you want to return and tell your
>friends about it.

>A bad drop zone does what it does so bad that you don't want to return and you
>also tell your friends about it.

Honestly I think that has almost nothing to do with it. DZ's that are marketed well do well; DZ's that aren't marketed well don't. I've been to some really nice small DZ's that will probably always be small because they don't do much marketing. I've been to some student-only DZ's that are making a pretty good amount of money because of their marketing efforts, even though they are missing such basics as other jumpers.

We like to think that the friendliest DZ's with the best up-jumpers and the biggest planes will do best, but in the end the DZ's that can draw the most tandems do the best (and are the least likely to go out of business.) The key is to balance those two things.

[Thanatos340 1]

One of the most successful DZ`s around broke almost every rule you spelled out.

They opened up in an already saturated Market. At the time they opened there were already 4 DZ`s servicing that Market. They opened up the 5th one.

Marketing?? They used primarily word or mouth the fist couple years and the DZ across the street was the Home of the biggest marketing machine this sport has ever seen.

Underselling?? The fist year they were in business they had $14 Jumps for men and $10 jumps for women.

How did they do it? I think it really all came down to the atmosphere they created. A DZ that from day one was all about the Jumpers. they created a Place that people wanted to come to and stay at. Competitive prices and above all, A great Vibe where everyone was welcome.

They went from Porter to a Caravan to a Grand Caravan to an Otter in just a few years and are usually the top rated DZ around.

It is all about the Vibe and atmosphere the DZO and staff creates.

[Andrewwhyte 1]

Another factor that dooms DZs is problems with the neighbours. Many dzs have been shut down because the fun jumpers and/or the dzo are insensitive to the community wrt aircraft noise, property damage (real or imagined) and late night parties.

[AndyMan 7]

Good marketing will help a tandem dropzone make lots of money.

But a good dropzone is so much more than a lot of tandems. Of course good aircraft are required, but to me - the most important focus for maintaining a good dropzone is making sure your student program is producing enough skydivers to replace those who move on.

Jumpers will always be leaving your dropzone. They'll be retiring from jumping, getting pissed off and moving to the competition, or moving physically away for whatever reason. Ensuring that the normal ebb-and-flow of students who leave get replaced is the single biggest challenge for a big DZ that does a lot of tandems.

There is nothing more disappointing than to see a dropzone that is not replacing its departing jumpers with new blood. When this happens, the writing is on the wall that unless the situation is fixed, only tandems will remain.

_Am

__

You put the fun in "funnel" - craichead.

[Hvance 0]

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Of course good aircraft are required, but to me - the most important focus for maintaining a good dropzone is making sure your student program is producing enough skydivers to replace those who move on.

One thing you can be sure of: eventually every student quits.

I wish Google Maps had an "Avoid Ghetto" routing option.

[cocheese 0]

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>A great drop zone does what it does so well that you want to return and tell your
>friends about it.

>A bad drop zone does what it does so bad that you don't want to return and you
>also tell your friends about it.

Honestly I think that has almost nothing to do with it. DZ's that are marketed well do well; DZ's that aren't marketed well don't. I've been to some really nice small DZ's that will probably always be small because they don't do much marketing. I've been to some student-only DZ's that are making a pretty good amount of money because of their marketing efforts, even though they are missing such basics as other jumpers.

We like to think that the friendliest DZ's with the best up-jumpers and the biggest planes will do best, but in the end the DZ's that can draw the most tandems do the best (and are the least likely to go out of business.) The key is to balance those two things.

............................
So you're saying word of mouth advertising or bad mouthing has almost nothing to do with a dropzone's success or failure? Tandems talk too ya know.

Not every tandem comes in because they saw a flyer or billboard or heard a commercial on the radio. Many come in because someone else who jumped there either brought them there or told them to go there. Hell, even Point Break can make the phone ring. Yea that's marketing.

[rehmwa 2]

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Why does a DZ's boom or bust?

wells, a DZ's statused to successfulnesses bein's do too advershin' from buster or booms'ing as well as' experienced leaderstuff - ya know?

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[gemini 0]

A general rule of thumb is that a happy, satisfied customer will result in one positive word of mouth recommendation, but a angry or unsatisfied customer will cost you 5 - 10 negative recommendations.

Marketing is essential however and requires a constant, long-term committment to work. People must hear an ad often enough to remember it so that when the conversation turns to "let's go skydiving" one person will say "let's go to [insert name of dz or tagline].

Blue skies,

Jim

[billvon 2,396]

>So you're saying word of mouth advertising or bad mouthing has
>almost nothing to do with a dropzone's success or failure?

?? Not at all. That becomes part of the overall marketing plan as well.

The issue is that DZ's are a business. They make money. That's how they remain in business. If a DZ supports up-jumpers, has free beer, has an open class 4 way team that does coaching, gets the -27's for their Otter - that's great. But if they don't have a marketing plan that makes them money, it doesn't matter one bit - they'll be bankrupt in short order.

This isn't just a problem in skydiving. I know a few brewers who have opened their own microbreweries (nanobrewery would be more like it.) In general they were super nice people. Once you got to know them they'd give you free beer, let you help them brew, stay open late drinking with you etc etc. Basically bend over backwards to help the 'beer geeks' who, they figured, were a really important part of their brewery.

But making really good beer and supporting the local beer geeks wasn't always enough, even in a market (San Diego) where there's a beer culture that gets the word out. You have to sell lots of IPA to Safeway to be a success - and two of them didn't do that, so they went out of business.

Take a third company which DID make it - Firehouse. They opened as a "microbrewery" but from day one they were all about quantity. They made one beer (now two) in massive quantities, and had a high capacity bottling line within a few months of opening. When you stopped by during the one hour a week they were open for tastings, you would find a pretty woman who knew nothing about making beer. She'd give you a taste of the one (now two) beers they had, then shoo you out.

They're doing great.

As a final example, there's a brewery (Lost Abbey) that does both. They got very good startup money and immediately started making a lot of "bread and butter" beer (like Wipeout, Shark Attack and High Tide.) These paid the bills and let the head brewer start doing the more inventive and interesting stuff for the beer geeks. They're also doing well.

And that's probably the model you'd want to use for a DZ. A steady income stream from tandems/AFF/SL/IAD (or whatever your student model is) with some of that money going to making the DZ attractive to upjumpers as well.

>Hell, even Point Break can make the phone ring. Yea that's marketing.

Yes, it is - which is why some companies push so hard for product placement (or even depiction of a similar product) in movies.

[DigitalDave 0]

I read something like this in a management book once ..

Just because you're an expert in your field, does not mean you're an expert at running a business in your field.

[Deisel 35]

C'mon, man!!! I was about 4 rum & cokes deep when I posted this!

This is interesting stuff - I wonder how many B-schoolers have done no shit studies on good and bad DZ models. I'd be quite interested in reading the data.

The brave may not live forever, but the timid never live at all.

[Hvance 0]

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C'mon, man!!! I was about 4 rum & cokes deep when I posted this!

This is interesting stuff - I wonder how many B-schoolers have done no shit studies on good and bad DZ models. I'd be quite interested in reading the data.

Haha, it's not the most popular topic I guess.

I wish Google Maps had an "Avoid Ghetto" routing option.

[davelepka 4]

The majority of the Dzs money comes from tandems and students, so in order to 'boom', you have to bring in a volume of those customers. They bring in $100+/slot, and that's what it takes to pay for any kind of airplane. $400 a load for a 182 or $4000 a load for an Otter, either way, those are the bucks that keep the ball rolling.

Fun jumpers are another story. Yes, you need them for the 'vibe' and it's nice to grow your own instructors, but tandems and students don't know what the 'vibe' should be, and you can always attract instructors if you have enough work.

Think about how much revenue a fun jumper brings to the DZ (not including referrals). If you make 10 jumps per weekend, the profit to the DZ is going to be under $100, probably closer to $60/$70. If they offer free beer or pizza, knock 10% off of that to cover those costs. So you're there most of the day Sat and Sun, and you bring in less than one tandem and take up 5 times as many slots.

If a DZ is flush with AC capacity, and they only half fill an otter with tandems and students, you're an asset by taking up previously unused slots. If the DZ is short of AC capacity, you're $60 has become a liability by possibly interfering with the tandem and student business.

The 'success' of a DZ is a matter of perspective. There are a bunch of tandem factories that fun jumpers dislike, but they have been in business for years, and probably will continue to be. There have also been a bunch of 'fun' DZs, where they promoted themselves as 'fun jumper first', that couldn't stay in business for more than a few years.

I think the key is to focus on the tandem/student business, and try to keep your aircraft capacity far enough ahead of your student/tandem needs to leave room for the fun jumeprs. The fact is, if people know your plane will be flying all day, and there will be open slots for fun jumpers on every load, fun jumpers will take care of themselves. They show up, they'll organize skydives, they'll buy beer, and they'll make a vibe.

[JohnMitchell 14]

I think you have a pretty good read on the situation. Our DZ swims in tandems somedays, and that really pays their bills (and mine.) I think our number of sport jumpers is down slightly with the economy, but we still have enough left to fill the rest of the plane, have packers for the tandems, and grow some new instructors and video people.

Am I happy with the way it is? Sure, if the DZ has the lift capacity to let me fun jump, and the student load to let me pay my way. We have 8-9 people at our DZ that are pro jumpers; skydiving is their main source of income. Who would've have ever thought 30 years ago it would come to be like this, that you could pay your bills by jumping?

[rehmwa 2]

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C'mon, man!!! I was about 4 rum & cokes deep when I posted this!

I'll join you this weekend

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[gemini 0]

Another important aspect to the fun jumper/tandem topic is that it is critical to keep the aircraft running to minimize start cycles on the engines. So the real problem even with tandem factories is that you only have so many instructors and tandems. If your tandems build up to the point where they are having to wait all day for their jump they start causing problems for the manifest staff, the instructors are running to planes and cutting instruction short, the packing crews are unable to keep up, and the planes have to wait with engines running or shut down until the next group of tandems is ready.

The solution is to fill the aircraft slots with tandems and fun jumpers so that the aircraft continues to be in the air where it is earning for the DZ.

If the dz prices the fun jump accurately, the dz should earn the same % profit margin per jump as the tandem and contribute to the dz's success. Of course it takes at least 10 fun jumpers to equal one tandem's slot, but when the plane flies with empty slots the dz loses.

So the solution is to consider the number of tandem rigs and instructors available, the number of packers required to turn the rigs, and the number of slots available to fun jumpers as a result.

You can always hire more instructors and buy more rigs, but that usually trails the tandem demand by several months.

Blue skies,

Jim