Advice to Wannabees about paying up front -Stickie

[SDB73]

GtW

Precisely! Hence the context of my original post on this. It's all about judging the individual organisation. You mitigate your risk online by going with reputable sellers, you don't instead just blanket refuse to buy online.

So a way of working out whether flight schools are reputable - or anything that even helps decide this - eg. a rating / feedback system would be a useful tool to students.

[IO540]

The problem, as I keep saying, is that aviation is not like "normal business".

I have run my present business since 1991. Turnover since starting is around very low 8 figures, at a guess. Total bad debts under £2k. Yet I use a very simple formula: trading 10 years plus, and 10 employees plus, and no obnoxious behaviour (telling me that they are entitled to an account, etc) automatic £500 credit. Or any "big" company (e.g. BT) gets a £10k-20k credit. But nobody gets credit unless they confirm 30 day terms in writing. I never get references or credit reports.

It works because most customers are industrial B2B stuff. ~10% is done on CC but CC fraud is zero - under £30 over 20 years (we never used the 3 digit code until forced by our bank). We ship to any address, unlike so many morons who ship only to cardholder address.

Once you go out of this scene, things change.

Retail (public) facing businesses are much worse. Selling to Joe Public is not an easy business (many people are thick or aggressive, etc; a fact not helped by many shops being staffed by thick people) and most retailers are run by fairly "sharp" individuals. 1978-1991 I had another business and we sold a lot to big City computer dealers. Never saw so many shysters - until I got into flying.

Flying (GA) is another level..... I see this as an aircraft owner of nearly 10 years. The % of people who are quite simply dishonourable is definitely above 50%. (In industrial B2B it is probably under 1%). On top of that you get the starry eyed but honest people whose businesses fail simply because they would.

[SDB73]

The problem, as I keep saying, is that aviation is not like "normal business".

I know you keep saying it, but if I keep saying "the sky is pink with yellow stripe"s it won't make it true. You haven't qualified this repeated statement with any facts or evidence. It just appears to be your opinion.

The rest of your post seems to indicate that due to running two businesses, one of which for the last twenty years, you know about all other businesses and what is classed as "normal" in business (a veritable and qualified business expert) and have met and been able to assess the honesty of a significant proportion of people operating in aviation around the world (enough to be able to form meaningful statistics), and that way over half of them - you have been somehow able to detect - are dishonest based on some measurement you haven't described.

This is a pretty big statement, and one you literally cannot, under any circumstances corroborate, so becomes meaningless.

The reason I'm responding passionately and beligerantly about this, is that (with genuine respect) highly opinionated people (which I'm sure you couldn't argue, you are) are often charaterised on forums with spouting cast iron statements with no factual backing whatsoever, sometimes on important topics which the unsuspecting newbie can sometimes take as gospel, leading them to make illinformed decisions.

I'm sure you mean no harm, but that doesn't make it OK.

To clarify, I don't think anyone has an issue with statements like "I firmly believe that over 50% of the people I have dealt with in aviation are shysters." Or "I would never even consider giving money in advance to a flight school, as I've heard too many stories of people losing money". But there is a gaping chasm between these kinds of statments and the cast-iron "facts" you've stated in this thread.

To avoid us going round in circles - as we're not really getting anywhere - I'll butt out now, and so to anyone reading who is actually considering paying in advance, I would simply say :

1) Not all advance payments end in loss
2) Not all companies who ask for advance payments are con-artists
3) You are taking a risk when giving ANYONE money in advance, so do your research and make a decision about whether the reward is worth the risk
4) But at the end of the day - only YOU can decide if you are willing to take the risk, and just because someone else would / wouldn't doesn't mean you're foolish for making up your own mind.

Most of all.. don't listen to ANYONE on a forum who says you're a fool for paying in advance, or one that tries to tell you "do it, it'll be fine". Make up your own mind.

[dublinpilot]

If a company's balance sheet has remained steady for a number of years I wouldn't have any issues with that. Obviously there's still a risk, but my recommendation of viewing a credit report was more designed to spot the obvious hopeless cases.

If all you are saying is that credit reports can help you spot hopeless cases, then I can agree with that.

But I have seen many 'false negatives' in these too, where companys were listed as extremely risky, simply because there was little information available from them. Yet the data that the report was based on was out of date too, and having personal knowledge of the company, I knew that it was quite successful. The credit report was simply wrong.

And in terms of being a good credit report, a stable balance sheet total (a totally meaningless figure if you understand financial statements) which is 12-24 mouths old isn't really much use in indicating today's position. The world is changing fast, and so are businesses. I appreciate that things in the UK might not be as bad as they are here, but things can change very quickly in the space of 12 months.

By way of example, no bank here will make any decision anymore based on last year's audited accounts. They want management accounts which are right up to date, because they know that last year's could tell a very different story.

[Deeday]

Originally Posted by SDB73

1) Not all advance payments end in loss
2) Not all companies who ask for advance payments are con-artists
3) You are taking a risk when giving ANYONE money in advance, so do your research and make a decision about whether the reward is worth the risk
4) But at the end of the day - only YOU can decide if you are willing to take the risk, and just because someone else would / wouldn't doesn't mean you're foolish for making up your own mind.

Most of all.. don't listen to ANYONE on a forum who says you're a fool for paying in advance, or one that tries to tell you "do it, it'll be fine". Make up your own mind.

Hear, hear... After years of

patronising hysteria about advance payments

on the pages of this forum, finally someone says something sensible. That could be made sticky, as far as I'm concerned.

[IO540]

I suspect a few people in this thread are involved in running flying schools

The problem with somebody with (pick a figure) £200k in the bank can go for a 10% discount on an hour block bought for £6k. If he loses the £6k he will hardly notice. He probably lost 2x that on the FTSE100 last week

But the majority of wannabbee PPLs are pretty broke. Most can barely afford the next lesson, and have to save up before they can have it. Some do have the £6k or whatever, but often they got it as a gift, so it is all they have.

It is these people, who were most keen to get a discount precisely because they haven't got much, who are most likely to lose all they had.

There is almost no honourable business model which requires up front payments. The only honourable reason I can think of for them is to raise working capital, and for that the proprietor should go to a BANK.

[SDB73]

To be completely clear, I have absolutely no affiliation or interest in any aviation ventures, companies, business, etc. If you were insinuating I was, then that would be another misjudgement.

And while I'm here!

But the majority of wannabbee PPLs are pretty broke

Here we go again! What percentage is that? Where did you get that figure from?

Just a sliver of evidence would really help back up these sweeping statements.

The only PPLs I know are fairly wealthy - they for instance have enough money to pay for a PPL. I wouldn't however say that the majority of students are wealthy, and I don't have the facts or figures to back that up.

There is almost no honourable business model which requires up front payments. The only honourable reason I can think of for them is to raise working capital, and for that the proprietor should go to a BANK.

You clearly haven't been involved in many different business models then, as I could probably spend four hours listing dozens. I also mentioned some valid reasons in a previous post on here. Business take many forms, and I've run a number of businesses over the years which have offered incentives for upfront payment and/or fast settlement. This has never been in order to raise working capital - certainly not in the way you appear to be insinuating. They're fairly standard practices in a vast array of businesses. And I can assure you that, in business, honour is something in which I am certainly not lacking.

[silverknapper]

Deeday:

Will people here please stop patronising newcomers with that sort of red capitals shouting?

You should listen to your own advice.
Starting to sound like someone with a vested interest in people paying uo front.

[IO540]

PPLs who are some years down the road and who fly all over the place do indeed have more money. They need it...

But the PPL training scene - and we are talking of the earliest stages of one here - has a lot of young people in it.

Most of these people drop out pretty fast after getting their PPL, but that doesn't alter the argument about not risking their money.

[SDB73]

Most? What percentage?

I give up

[Deeday]

silverknapper, I was taking the mick out of the recurrent red capitals-"Never pay upfront"-shouters, but irony is notoriously tricky in the written word (or maybe everybody else got it ).

By the way, I have no vested interests in flying schools. I'm just a PPL who was once called mad on this forum for expressing the intention of paying in advance for my course, which I did and - needless to say - worked out without a glitch.

[Pilot DAR]

Being a pilot, and having excess money, to me, are unrelated. Some do, some don't. Being a young student pilot perhaps raises your chances of being finacially stressed, but still no certainty.

That being said, being a person or organization who has at least custody of an aircraft (if not ownership), and having the financial wherewithall to sustain a business in aviation, are also not always related. It is possible that there are people in the aviation business, who allow the aura of aviation to make them to appear more "sound" than they might otherwise appear. I don't know for certain, I just suspect - from observing some aviators and aviation busnesses for the last 35 years.

So, prospective pilots, what do you want to be? Obviously, you want to be pilots! Welcome to our pastime, our passion, and our industry. Pease expect to pay fairly and promptly, for the services you ask to have provided to you.

Would you also like to be a banker? Please do! Employ all of your skills in the business of finance, and extend credit where you deem it appropriate. If it works out, how nice for everyone. If it does not work out, don't complain here - this really is a pilot forum, not a banking forum!

I can tell you that most well funded pilots and owners I know, happily pay for the services they consume. Getting a deal is nice, though they are unlikely to pay in advance to get it.

What other business have you heard of that wants money up front? You talk to the Maitre'd, and he tells you that if you pay for 20 meals in advance, you get 10% off? The barber offers a discount if you pay for a year's haircuts in advance? Not that I've heard of!

For those of us in the group who are experienced pilots, we can assume some duty of care to newcomers, to mentor them through learning to fly safely. If people here have additional skills in finance (certainly not me!) I suppose that is mentoring too, but this is a piloting forum!

My feeling about using this anonymous forum to identify a troubled business relationship, would be that if this is to be done, the PPRuNe member would really have to publically identify themselves too. To hide behind anonymity while calling someone else out, is just not honourable...

There is no answer to the question posed, just the same unqualifiable observations over and over.....

[The Old Fat One]

IO540

Having read many of your posts...and frequently agreed with them, I find your knowledge of business to be out of kilter with your frequent claim to be businessman.

Credit reports are like everything else..part of the jigsaw. A decent credit report will take great store of the longevity of the company and most businessmen and women recognise this an essential component of company data. Of course there is risk. Such is the nature of commerce. But making sweeping claims about the people who run flying schools is at best founded purely on your personal experiences and at worst nothing more than scuttlebutt...which most true business people avoid like the plague.

I take it you company does not trade in the public sector. If it did you would know that any company which wins a public sector contract has had its finances stress tested ad nauseam before winning the contract. A flying school not 4 miles from where I type has had just such a contract for 18 plus consecutive years. It has traded without loss to any supplier or customer for nearly fifty years. It's credit score is 93 out of 100 and it is part owned by one the region's most reputable businesmen.

No doubt there are shysters in the aviation business...as there are all in all businesses. But tarring them all with the same brush just ensures that the shysters benefit because the punters cannot sort the wood from the trees.

There are good flying schools are there are bad flying schools. Punters needs to be taught how to distiguish the two. Telling them that they are all dishonest shysters is wrong, misleading and ultimately increasing the problem, not solving it.

And for the record, I have no assocation with any flying school or aviation business whatsoever.

I have run businesses however...five of them. I have never flipped a business, gone bust, not paid a bill or short changed a customer. In my experience the people that do such things are quickly found out and nowadays, information about them is quickly disseminated.

Pprune could help the aviation business by making sure this happens...as it has done in the past. But it needs to deal in specifics and facts. Not scuttlebutt.

PS

Just to show that some people will post any old nonsense without rhyme, reaon or research...go back to the post where EBay is mentioned. Does that poster honestly know the first thing about trading on EBay. I doubt it. Yet they will bash away any old nonsense, without stopping to think how completely stupid they look to those that do know something about it.

[Pilot DAR]

It has traded without loss to any supplier or customer for nearly fifty years. It's credit score is 93 out of 100 and it is part owned by one the region's most reputable businesmen.

That sounds very reassuring. Just to keep things in context with this thread (and simply 'cause I'm curious), would this be a flying school which offers discounts for advance payments? I would wonder that probably one of the region's most reputable businessmen, would not need to employ such a business tactic?

[24Carrot]

The summary in post #23 gets my vote.

IO540, one example of reputable businesses offering large discounts for large advance payments are railway companies. I think season tickets are offered pretty much worldwide.

High ticketing costs, high fixed costs, and perhaps seasonal demand make it a natural option.

I don't run a Flying School, and so I can't say how well schools fit that pattern, but I can see that some might a bit.

[A and C]

Deeday

Your attitude to paying up front is totaly correct in your case..............unfortunatly there are a lot of people who have lost a lot of money by paying up front.

Just because you have been fortunate the opposite may be true for the next person that takes your advice on these forums.

[IO540]

I take it you company does not trade in the public sector. If it did you would know that any company which wins a public sector contract has had its finances stress tested ad nauseam before winning the contract.

We do sell to various PS companies but our products are not anything mainstream (specialist datacomms interfaces) and most of the big firms that buy them buy them on an ad hoc basis. I prefer that; I don't like getting too close to any customer, for obvious reasons.

A flying school not 4 miles from where I type has had just such a contract for 18 plus consecutive years. It has traded without loss to any supplier or customer for nearly fifty years. It's credit score is 93 out of 100 and it is part owned by one the region's most reputable businesmen.

That's excellent, and I never said there aren't any.

No doubt there are shysters in the aviation business...as there are all in all businesses. But tarring them all with the same brush just ensures that the shysters benefit because the punters cannot sort the wood from the trees.

I didn't tar them "all" with the same brush. Read again what I wrote. I said more than 50%.

There are good flying schools are there are bad flying schools. Punters needs to be taught how to distiguish the two.

How? If you can summarise it in a useful way for a 17 year old kid who has just been given £7k for xmas, it would be most useful.

Telling them that they are all dishonest shysters is wrong, misleading and ultimately increasing the problem, not solving it.

I didn't say that.

I have run businesses however...five of them. I have never flipped a business, gone bust, not paid a bill or short changed a customer. In my experience the people that do such things are quickly found out and nowadays, information about them is quickly disseminated.

That's more true today than say 30 years ago, and a Director is more likely to be disqualified today, but there are still well known methods for doing a runner and getting away with it. Not owing anybody more than a few k is one component, not owing HMRC anything is vital of course, and not p*ssing off anybody with determination and resources is another one There are some proven geographical methods too which do not apply to this context (e.g. basing a business in Scotland and buying only from firms in the South East ). Another popular method is to have a number of brothers

PPRuNe could help the aviation business by making sure this happens...as it has done in the past. But it needs to deal in specifics and facts. Not scuttlebutt.

Indeed, otherwise it will get sued.

Just to show that some people will post any old nonsense without rhyme, reaon or research...go back to the post where EBay is mentioned. Does that poster honestly know the first thing about trading on EBay. I doubt it. Yet they will bash away any old nonsense, without stopping to think how completely stupid they look to those that do know something about it.

Ebay and Paypal (which I am closely familiar with) are a great resource but they also provide a useful venue for scammers. Ebay's recent policy change which prevents giving bad feedback to a buyer has dramatically increased the number of badly behaving buyers (mostly ones which don't bother to pay so you have to re-list). Paypal is a more complex thing. In complaints, they side with buyers in nearly every case, and this facilitates some obviously easy scams (which I won't detail here). I have had a lot of my time wasted and I know others who have lost quite a lot of money. However, for the right kind of stuff, presented in the right kind of way, and offered to appropriate geographical areas only (unless you insist on a bank transfer, not Paypal, which is then a breach of Ebay's Ts&Cs), Ebay is a great way of getting rid of old stuff.

But funny you mention Ebay. In front of me I have a video card which is going back to the seller. It was advertised with a false photo and false description. The actual one is a cheap version which runs at about 1/3 the clock rate. This is not uncommon.

[thing]

The only PPLs I know are fairly wealthy - they for instance have enough money to pay for a PPL. I wouldn't however say that the majority of students are wealthy, and I don't have the facts or figures to back that up.

I may be missing something here but doesn't that statement contradict itself? How can a PPL be wealthy and be able to afford a PPL and then be a student who isn't wealthy?

I have to disagree with the PPL's being wealthy, I don't know any and I'm willing to concede I don't fly from the 'right' clubs. All of the PPL's apart from two I know give up an awful lot to be able to do their three hours or so a month. I find that perception a little annoying TBH, I've had that comment in the short time I've been flying powered (even get it as a glider pilot which is less expensive than going fishing regularly with good kit which I also do). Joe Public doesn't seem to understand that if he didn't buy a new Beemer every two years and stuck to a cheaper car/insert saving of choice then flying would be well within his/her reach too. You gets your money and you takes your choice.

[stickandrudderman]

Al last, an interesting discussion on pprune!

[SDB73]

may be missing something here but doesn't that statement contradict itself? How can a PPL be wealthy and be able to afford a PPL and then be a student who isn't wealthy?

Yeah, I can see how you read my sentance wrongly.

I said : "The only PPLs I know are fairly wealthy - they for instance have enough money to pay for a PPL. I wouldn't however say that the majority of students are wealthy, and I don't have the facts or figures to back that up."

This means :

1) The only PPLs I know are fairly wealthy.

2) I don't have enough information on the MAJORITY of PPL Students to make a judgement about the MAJORITY of PPL students.

3) Due to the above, I wouldn't therefore make the statement that the MAJORITY of PPL students are wealthy.

Poorly worded on my part. Hope that's clear now though.

I have to disagree with the PPL's being wealthy

I don't think anyone has said that "PPLs are wealthy". I simply said that all the ones I know are relatively wealthy, and stated that I don't have enough information to make a judgement on the majority.