Response to Whirlygig
Thank you again for your interest.
In response to your post.
Let me explain:
Citing your hypathetical company that is "making a modest profit", your focus is solely at your own profit as you state "why I should want to sell you a 20% stake in my business (which I value at £200,000) and give you training at cost?"
The philosophy is that after expenses the profits go to the students that are partners this has several side effects.
Firsly it is in their interest to dedicate their passion to the Flight training school and increase business during their Instructor aprenticeship as the company value will increase.
Secondly, this will increase the overall profits of the company.
Thirdly, In addition to the Flight Training School making a healthy profit from its non partnered students, it is also re investing in lets say 20% of its students ensuring that they gain employment and maintain currency. Giving the FTO a 20% increased success rate by "Investing in people".
Its not a question of "a shortage of Instructors" more a case of filling the Instructor requirement with your own students, after all they have invested in you, why shouldnt you reciprocate.
Do you not think that this would have a possitive impact on the number of students applying for entry to your FTO.
Have you considered expansion?
You mention that it "does not make business sense": does it make business sense to have a sole interest in profit without consideration to increasing the employment prospects of your students by 20% over night, by marginaly reducing profits?
There is a clear distinction between GREED and business sense.
Many FTO's have commited the same financial suicide through GREED.
If you reduce your profits by 20% only to increase your student population by 35% and employment stats by 20%, and more importantly your reputation by 200%. Where is the failure in business sense?
With respect to tax/stamp duty and company law, please try not to be overly concerned, it is dealt with by the accountants and law firm.
Thank you again for your interest.