tinlizzy73 0 #1 May 13, 2008 My home DZ is experiencing financial difficulties. Recent annual on Cessna resulted in a total bill of $22,000, which the DZ cannot afford to pay. The options are to close the DZ, sell it, or convert it into a club. Does anyone have experience in starting or operating a skydiving club? I'd also like to entertain the idea of fundraising somehow to pay that bill and keep everything as-is. Suggestions?Jeanne Blue Skies, better days, more beer - Oh the humanity - Peace be with you my friend DON'T TASE ME BRO Quote Share this post Link to post Share on other sites
freestyle7457 0 #2 May 13, 2008 well advertised and promoted Boogie might give you some money and at least some fun... Quote Share this post Link to post Share on other sites
JohnDeere 0 #4 May 13, 2008 Quit holding back and tell us how you really feel!. Nothing opens like a Deere! You ignorant fool! Checks are for workers! Quote Share this post Link to post Share on other sites
-Scatter- 0 #5 May 13, 2008 QuoteMy home DZ is experiencing financial difficulties. Recent annual on Cessna resulted in a total bill of $22,000, which the DZ cannot afford to pay. The options are to close the DZ, sell it, or convert it into a club. Does anyone have experience in starting or operating a skydiving club? I'd also like to entertain the idea of fundraising somehow to pay that bill and keep everything as-is. Suggestions? I'm not a DZO or a club member, but I do own and run a business. A few thoughts: First, realize that "sell it" and "turn it into a club" are the same thing. The club members would be purchasing the DZ from the current DZO. Therefore the questions are: What assets are being sold? The airplane? The equipment? Is the space the DZ is on leased or owned? What were the total DZ revenues for the past three years? If you don't get to see the balance sheets, then run away screaming now. If you buy this business, then you have to have enough income coming in to run it, PLUS enough extra income coming in to cover unexpected costs like $22,000 to fix the plane. What were the total DZ expenses for the past three years? If the DZO was buying titanium vibrating golf dildos, then maybe the money's there. If money's just not there, why buy a failed business? The BIG one: What liabilities are you also purchasing? Not having $22,000 set aside for an expense that should have been forseen is just poor management, plain and simple. I wouldn't be suprised to find that the DZ is in debt for significantly more than $22,000. If you buy the business, you buy the DZ's debt. The other big one: Who runs the place once the club members own it? Someone has to be there to answer the phones, pay the bills, schedule things and generally run the place. Saying "the club members will share the work" is as naive as "we'll take care of the puppy, mom, we promise!" If the money isn't there to hire a competent manager, the DZ will fail again. Who flies the plane? If its the DZO, then you absolutely can not count on him to stick around once he doesn't own it anymore. Whatever you do, don't buy 1/3rd of it, leaving the current DZO with control. That's just pissing money away. Quote Share this post Link to post Share on other sites
banditgrrr 0 #6 May 13, 2008 If you're interested in owning the DZ, just wait for the foreclosure. Then you can negotiate with the bank for the business and pay 10 cents on the dollar for the plane. Quote Share this post Link to post Share on other sites
itllclear 1 #7 May 13, 2008 I was the treasurer of the Perris Valley Skydiving Society which ran the operation @ Perris 1985 - 1987. I guess that gives me some knowledge of what's involved. Although you are using the word "club," are you sure you want that form of management/woenership? There are a lot of different business entities that can exist, all with different ways of controlling the business and limiting the risks of the owner/members. We had a board of governors that included lawyers, riggers, instructors, pilots, bankers. Unless you and your prospective other "members" have that kind of expertise, or some $ to spend on a professional business consultant, you probably won't get the answers you need. Good luck. Harry"Harry, why did you land all the way out there? Nobody else landed out there." "Your statement answered your question." Quote Share this post Link to post Share on other sites
skydived19006 4 #8 May 13, 2008 One suggestion I'd make is to not buy the business! Start your own LLC (or whatever model you choose), and purchase whatever assets you think you need. It's a lot easier for the current DZO to sell everything to one entity than trying to sell the aircraft, and all the gear to 20 different people. The DZ may be profitable, but still go under. Maybe the DZO was paying himself so he and his family could eat indoors? Somewhat off topic, but something to consider regarding a club. I had recently wondered what happens when a club liquidates. Where does the debt, or money go? Does joining a club also obligate one to a share of the debt, or is that carried by those who signed up for it in the beginning? For a club that's been around for 40 years, the founding fathers are more than likely no longer around, if it liquidates, and has assets does the money go back to the guys who started the club? Maybe it's all in the language of the club charter? Sounds like you need a lawyer! MartinExperience is what you get when you thought you were going to get something else. AC DZ Quote Share this post Link to post Share on other sites
Jeff.Donohue 0 #9 May 13, 2008 Quote"I had recently wondered what happens when a club liquidates. Where does the debt, or money go?" This is a state by state thing, but generally clubs are not-for-profit corporations (which are different than a charity or a tax-deductible non-profit). Generally, the members are treated as "shareholders", although the by-laws my include provisions that change their treatment (and there may be different classes of members, etc.). Anyway, on liquidation, the debts of the club must be paid first, and anything that is left over would be distributed to the members (usually, that's pretty much nothing). If the corporation was run properly, the liability of the corporation doesn't pass on to the members (in the same way that if you run a for profit corporation properly, the individual shareholders aren't liable for the debts of the corporation - with a few exceptions). Quote Share this post Link to post Share on other sites
itllclear 1 #10 May 13, 2008 QuoteSounds like you need a lawyer! Sad, but really good advice! Harry"Harry, why did you land all the way out there? Nobody else landed out there." "Your statement answered your question." Quote Share this post Link to post Share on other sites
Fast 0 #11 May 13, 2008 QuoteMy home DZ is experiencing financial difficulties. Recent annual on Cessna resulted in a total bill of $22,000, which the DZ cannot afford to pay. The options are to close the DZ, sell it, or convert it into a club. Does anyone have experience in starting or operating a skydiving club? I'd also like to entertain the idea of fundraising somehow to pay that bill and keep everything as-is. Suggestions? You couldn't pay me to get into the DZ thing right now with any of my personal money. I am currently sitting on the board of a pretty large skydiving club. It's a lot of work. You have no idea.....~D Where troubles melt like lemon drops Away above the chimney tops That's where you'll find me. Swooping is taking one last poke at the bear before escaping it's cave - davelepka Quote Share this post Link to post Share on other sites
skydived19006 4 #12 May 14, 2008 Quote If the corporation was run properly, the liability of the corporation doesn't pass on to the members (in the same way that if you run a for profit corporation properly, the individual shareholders aren't liable for the debts of the corporation - with a few exceptions). My business (DZ) is a S-Cooperation. I don't really think that I could get a bank to loan my cooperation (I'm the only shareholder) anything without also cosigning and being personally liable. Although now, the cooperation may have enough collateral to cover a loan. I still doubt that any/many bankers would be lining up to loan my business money without me guaranteeing it. In an S-cooperation all profit/loss passes directly through to the shareholder/s anyway, basically the same thing as an LLC. Did I hear someone say that you need a lawyer? Running a DZ is a lot of work regardless of structure. Every structure has it's advantages/problems. With a club you have more people (theoretically) to help out, but every decision becomes political. Club structure is a little idealistic, with the expectation that the members will all step up and carry their share of the load, but there are a few clubs out there who've made it work for a long time. With sole ownership, everything falls to the owner, unless he can afford to hire employees, or garner free assistance from friends. Those friendships are guaranteed to change as the relationship changes. Somewhat like when a coworker becomes the boss. When the new boss makes a unpopular decision, it's because the power had went to his head, and he's now an ass hole. Running a DZ, and working a "real job" is even more fun! Can you say 60 to 80 hour work week? Good thing my day job isn't all consuming, and that my family likes to spend their weekend at the DZ. That's my take anyway, but I'll freely admit to being an ass hole. It's just simpler that way. MartinExperience is what you get when you thought you were going to get something else. AC DZ Quote Share this post Link to post Share on other sites
SpeedPhreak 0 #13 May 15, 2008 Sorry to hear about the drop zone situation down there, it's always sad when "your" drop zone has to shut down. I've got several people from Goshen that come up and jump with us so I'm aware of the situation. We're going to be jumping and having two Cessnas flying in Benton Harbor (BEH) this upcoming Wednesday, May 21st starting at 4:00p if you or anybody else wants to road trip up and get a couple of jumps in by the lakeshore, it's an hour and a half from Goshen. I can run you through some of the trials and tribulations of owning a DZ. You can check out our Forums for current info. SkydiveAllegan.com Quote Share this post Link to post Share on other sites
tinlizzy73 0 #14 May 15, 2008 QuoteSorry to hear about the drop zone situation down there, it's always sad when "your" drop zone has to shut down. I've got several people from Goshen that come up and jump with us so I'm aware of the situation. We're going to be jumping and having two Cessnas flying in Benton Harbor (BEH) this upcoming Wednesday, May 21st starting at 4:00p if you or anybody else wants to road trip up and get a couple of jumps in by the lakeshore, it's an hour and a half from Goshen. I can run you through some of the trials and tribulations of owning a DZ. You can check out our Forums for current info. Thanks so much for the information about BEH and your offer to impart much needed knowledge. Our DZ is having a brainstorming meeting on Saturday May 17. I'll keep my fingers crossed that we come up with a solution, and will tell everyone about your DZ jumping on the 21st.Jeanne Blue Skies, better days, more beer - Oh the humanity - Peace be with you my friend DON'T TASE ME BRO Quote Share this post Link to post Share on other sites
ZigZagMarquis 8 #15 May 15, 2008 Currious... why do you think converting your DZ to a Club will "save" it?? Quote Share this post Link to post Share on other sites
tinlizzy73 0 #16 May 15, 2008 QuoteCurrious... why do you think converting your DZ to a Club will "save" it?? I don't know if it will or not. It was one of a short list of options.Jeanne Blue Skies, better days, more beer - Oh the humanity - Peace be with you my friend DON'T TASE ME BRO Quote Share this post Link to post Share on other sites
