# The Business side of Homebuilt Aircraft

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#### choppergirl

##### Banned

I second the idea of making "parts" for airplanes instead. Make discrete aircraft instruments. You'll make a killing off of them. Even questionable used junk on ebay is through the roof. You could sell some of them into the automotive market as well.

Pound for pound, they probably sell for more than gold or latinum. If I started an aircraft parts cottage industry, that's what I'd do, like Belite. Only not with LED dots. Real numerical output...

Bad product + good marketing = $Good product + lackluster marketing = long road to bankruptcy. Good product + no marketing = instant bankruptcy. Good luck. #### Little Scrapper ##### Well-Known Member HBA Supporter Log Member You're going for cheap? The low price leader? No, build and design the expensive stuff not the cheap stuff. If an instrument is selling for$350 design one that sells for $500, not$100.

When you get older and more experienced you'll grasp this concept even more. The people who want you to design cheap stuff are broke, they have no money. That's not an ideal customer.

As an example, I put in a 1,300 kitchen sink with a $800 faucet. To put in a$100 sink with a $40 faucet takes the same amount of time to install. If I mark up material 22% do the math. I also charge more to install$2,000 in material vs the $200 in material job. Vans could easily design a cheap little airplane that's affordable. Why? What would be the point? There's no money in it. Is there more profit in restoring a Waco UPF or a Taylorcraft? Both need fabric, both need paint, both need upholstery etc. #### Tiger Tim ##### Well-Known Member I always thought if 'cheap' was the game, design the next Affordaplane. Sell a dream of affordable aviation even if it's an impossible one. Set up a website to automatically distribute plans after receiving your comically low charge, then offer no support. I doubt you could make a living but the A-plane guy makes what, seven bucks per plan set times how many sets sold? If you whipped out a supposedly cheap "Part 103" warbird and sold plans for under twenty bucks methinks you'd be laughing all the way to the bank. You know, ethics aside. #### deskpilot ##### Well-Known Member Any fool can design an aeroplane. It takes a genius to design a cheap motor. Fill that gap and you're made. #### BoKu ##### Pundit HBA Supporter ...Should be noted that i have more business experience than i do engineering experience, and although i'm not yet a qualified engineer, i can employ one (or 2) to do the detailed design and production design work rather than waiting till i'm fully qualified to start... Well, there's the key thing. The question that statement raises is, what do you propose to bring to the party? If it's just your business acumen, and you've not run an aeronautics business before, where is your competitive edge? What happens if someone who has been around the block a few times, and has connections within the industry, hires the engineers you were thinking of? Or hires them out from under you? Or hires the engineers you should have hired, but didn't know you needed? It takes a lot more than energy and enthusiasm to stay alive in the aero business. You have to be crazy good at a crazy lot of things, and you have to work every in and connection for all its worth. And even that might not do it. We're talking about a sector of the economy that is in collapse, so in order to grab any chunk of it you have to find one of those tiny rare sectors that is actually expanding, or you have to take some of it away from someone else who won't take kindly to letting go of it. Thanks, Bob K. #### Floydr92 ##### Well-Known Member You're going for cheap? The low price leader? No, build and design the expensive stuff not the cheap stuff. If an instrument is selling for$350 design one that sells for $500, not$100.

When you get older and more experienced you'll grasp this concept even more. The people who want you to design cheap stuff are broke, they have no money. That's not an ideal customer.

As an example, I put in a 1,300 kitchen sink with a $800 faucet. To put in a$100 sink with a $40 faucet takes the same amount of time to install. If I mark up material 22% do the math. I also charge more to install$2,000 in material vs the $200 in material job. Vans could easily design a cheap little airplane that's affordable. Why? What would be the point? There's no money in it. Is there more profit in restoring a Waco UPF or a Taylorcraft? Both need fabric, both need paint, both need upholstery etc. Not cheap, but good value. The E-go SSDR is a canard design, business seems to be doing ok given they've not delivered a plane yet, and they're selling for £70k or approx$100k, which i think is over priced.

The target for mine would be around £25k for factory built base model with no extras, and it will perform better.

Boku: i take the energy and enthusiasm to the table, the ideas and the initial design work. The engineers are needed to help confirm and review the work i've done, and proceed to perform a detailed design. I could do that myself but its a long process and would take me a couple of years.

Comes a point in life where you start appreciating professionals and have no issues paying them.

I'm qualified to diploma level in aircraft engineering, but it would take me 2 hours to do the same job it would take a good experienced engineer to do in an hour.

I'm an experienced joiner, so i'll fit a kitchen in half the time it takes even a really good diy'er, to a better standard.

Also, i'm in the circles, so i know plenty of aero engineers. I could probably give each one an individual task on a consultancy basis and be done fairly quickly...i'd still want one top motch aero engineerbto review everything before building or selling anything.

Another factor is i can build the prototype myself, but something i want to sell, no matter how relaxed the regulations have become, needs to have been properly engineered. (But not over-engineered)

Might be worthwhile getting the powerplant side of things set up first, developing a hybrid powerplant for microlights and UL's, and selling that to fund the development of the aircraft?

#### timberwolf8199

##### Well-Known Member
You seem to be aware of the market as well as your own abilities. Your optimism appears to be tempered sufficiently that your expectations are reasonably realistic. You may very well succeed...I'll root for you.

Regarding the powerplant: Hybrid technologies are all the rage right now and they certainly have some merit. But they're not so far of an improvement that they can be used without sufficient consideration. I don't know how much you've looked at it/them so far but I would make sure I had a good grasp of the what and how before investing in the whole picture. You'll have a hard time selling the powertrain to jaded aircraft owners who've seen engine programs come and go like so many passing storms...you'd need to demonstrate success in several airframes (expense?). IMO it may not be a path to funding the development of the aircraft but it would certainly be a big step completed in the development itself and even bigger towards the credibility of the finished product (for investors and customers alike).

#### cheapracer

##### Well-Known Member
Log Member
Any fool can design an aeroplane. It takes a genius to design a cheap motor. Fill that gap and you're made.
That's just one of the opportunities mentioned. Of recent iterations I've only seen one seems to be doing it smart and they seem to be doing well - by turning a $500 junkyard engine into a$12,000 retail sale.

There's plenty of cheap motors to be had, it's the "Experts" you have to get past.

#### cheapracer

##### Well-Known Member
Log Member
Not cheap, but good value.

The E-go SSDR is a canard design, business seems to be doing ok given they've not delivered a plane yet, and they're selling for £70k or approx \$100k, which i think is over priced.

The target for mine would be around £25k for factory built base model with no extras, and it will perform better.

You have considered insurance in that "Factory" price? That is a partial reason for a chunk of the cash manufacturers want, of course kits is one answer there.

Might be worthwhile getting the powerplant side of things set up first, developing a hybrid powerplant for microlights and UL's, and selling that to fund the development of the aircraft?
Goes hand in hand, people want it but want to see it flying also, both compliment each other.

#### BoKu

##### Pundit
HBA Supporter
...i take the energy and enthusiasm to the table, the ideas and the initial design work...
Reminds me of my favorite Don Lancaster quote:

##### Well-Known Member
Assuming you were to go ahead, I'd hire an engineer to consult on the primary design side, come up with the views and some structural outlines, but then hire a CAD designer for a few months long contract to do the detailed nuts and bolts side of the modeling or drafting. While plenty of engineers are familiar with CAD, and some are quite capable at using it, my experience says the smart money is hire a guy who lives and breathes modeling to actually do the CAD, even if he or she doesn't have a lot of aircraft experience. We don't charge engineering prices usually, and we are quick to boot.

I'm not trying to start any kind of profession war, so lets just not get into it. Obviously many people with various titles and experiences can be quality CAD jockeys and do quality engineering work and so on. But there's a reason at most any firm, the CAD jockeys are a completely separate role from the Engineers.

In my view, an engineering trained individual may start to agonize over details in the CAD stage (I know I do); a draftsman will model exactly what you want without going off and second guessing it, and then you just have to go back and forth with the details and your engineer to find a solution.

That'd be how I budget it anyway.

Might be able to go other ways about it.
Mixed feelings. I'm an engineer by heart and a project manager (in engineering) by profession. People having opinions outside their skillset is a major issue. Engineers who want a ridiculous way to build CAD-models, CAD jockeys who have engineering opinions. Both of those having opinions about manufacturing techniques. Bottomline is that without a solid understanding of both manufacturing and CAD, an engineer won't be terribly productive.

In big companies, it's setup with separate CAD jockeys. Yet, in small companies, it often takes more time to explain how exactly the OML should look like than to do it yourself. Nothing worse than having to argue with a CAD guy because he wants the fuselage or wing simple to model, instead of doing it right.

In a small company, say a few engineers it probably makes most sense to have one CAD-guy that's responsible for all CAD-work, have him do most of it, but have the engineers do some of the more complex parts, with the CAD jockey helping them. YMMV.
Might be a better idea to compare to something like a SD1-minisport, or minimax...similar size and flight envolope
The amount of time and engineering are not that different for a 1- 2 or 4-seater. Tools and parts get bigger and the engine gets more expensive, but the amount andcost of engineering stays virtually identical.

I've said it before on HBA, but I don't think there's any market for single-seaters.

Obviously, that depends on the definition. But apart from specialities like sailplanes and ultimate aerobatic machines, I'm unaware of any company that provides a decent living selling single-seaters. See 2 paragraphs above for the reason.

5000-20000 hrs seems pretty much the agreed number for a conventional design by people with extensive experience. Excluding material etc, but including overhead, that's on the order of .5-2 million. Mind you, that's a conventional design, with a proven engine, conventional construction techniques and airframe layout.
Assuming 5% interest and 20 year payoff plus 10 years before you start making an operational profit, you'd have to make 100K a year in operational profit, just to pay off the investment. How many SSDR's a year would the total market be, 10-20?

Even Van's, that sells a thousand kits a year or so isn't a huge money-maker.

Boku: i take the energy and enthusiasm to the table, the ideas and the initial design work. The engineers are needed to help confirm and review the work i've done, and proceed to perform a detailed design. I could do that myself but its a long process and would take me a couple of years.

Comes a point in life where you start appreciating professionals and have no issues paying them.

I'm qualified to diploma level in aircraft engineering, but it would take me 2 hours to do the same job it would take a good experienced engineer to do in an hour.
Make that 5-10 hours. I was where you are now a while back. Rather impressive how long it takes to achieve seemingly simple things.

I've been where you are now. I finance the development of my own design out of my income. Parts supplying and engineering consultancy is a good way to make a decent living, build up your personal situation (workshop?) and finances such that you have the money, tools, workshop and engineering/CAD and manufacturing skills to pull it off yourself.

The neat thing is that once you have a workshop you can use and tools, the net expenses are laughably low, on the order of tens of thousands of euro's. (Material, engine, instruments etc), with most of the expensive stuff towards the end of the project. It is a huge expense in terms of hours, but as long as you do it for the love of it, with possibly a future shot at a profitable company, it's fairly low-risk.

##### Well-Known Member
Another interesting point, think long and hard about your parts /drawing numbering system. I have seen a lot of wasted time with poor systems where they draw each individual part, in place of using a table drawing (think AN / MS spec's), plus if one is really cleaver all the parts of a family (say shear clips) should end up next to each other in stores.

To make a small pile in aviation start with a large one, best if its someone else's pile.

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#### FWSwe

##### Member
The advantages to starting by selling the motor are:
1. Most inovative part of the project
2. Quickest turn around, limits the initial depth of the project
3. Easiest method to get a long term contract, ie: with other airplane producers
4. Largest market potential, total return on investment is the largest
5. Actually producing and installing a quantity of something tends to show you how to make the next version easier and better

The problem are:
1. The focus will be on the motor and not the plane as a whole (tougher sell even if it's a hotter market)
2. This could keep you from the plane quite a while, and you may never get it done
3. It dilutes the market for your plane, it won't be quite as special
4. Not as high initial return on investment for the motor versus the plane
5. May require a greater financial investment on your part to get the motor to the market, more demos, test versions, adaptions to different planes, etc...

The question is what motivates you. What you _want_ is more likely to happen than what you can sell quickest or which will give you the highest ROI.

Good luck!

#### homebuilderfan

##### Well-Known Member
autoreply did post a good message. Read it carefully. It comes from a professional.
And now my opinion: everyone aviation enthusiastic dream about designing and building his own plane , sooner or later.
So, let's start it, but...do it for yourself only. If the results are good maybe you will be able to sell it to other people. What does it mean? Don't start it as a business, now. Be patient. The idea that looks super today will be be poor tomorrow.
Another tip: are you convinced you can do a very good job?(because it has to be so, if you want to have a chance to have success) So, start analyzing existing items (not necessarly a whole aircraft) and think the way you can get it better. This is a good path, on my mind.
Another tip: you are talking about a product that will have a low price: since you aren't sure to sell a lot, how can you believe to have good earnings? Maybe it is easier to start thinking about an expensive aircraft, just in case you can't sell enough items

#### Floydr92

##### Well-Known Member
Thanks for the comments so far guys.

I've got myself some space in a warehouse from a mate free of charge (in return for some jobs i done for him, like fitting his security system and flooring his office).

My plan for now is to finish the minimax, as i put it on hold thinkong i should be building my own design instead, but now i think it would be a good testbed for a microlight engine, an di can have my design in mind while building, thinking about how things could be improved or produced more efficiently etc.

I'm relaly busy at work justnow and when my current job is complete i'll be heading to spain for the summer and have the in-laws garage kitted out with tools so will start work on the engine there. The prototype will be based on a b&s vanguard as its the hybrid addition to it that needs all the work.

My microlight design can wait for now, like i said, the minimax will be a testbed for various systems including the engine. Airframe can come last, and just go a step at a time.