Lilliam Tamm owns Avicor Aviation. She’s the one you call if you need an accurate valuation of aviation-related company. Other business consultants might be able to provide an accurate value of the real estate or planes, but the big picture also includes some pretty specific items like FAA certifications, specialized equipment, skilled and credentialed staff, and contractual relationships.
One of the biggest benefits for our aviation marketing Master Class is the opportunity to network with aviation professionals. Our members, or Insiders, one another to help us get to know one another better, make better referrals to each other, and generally learn more about the smartest people in the industry.
We’re looking forward to learning more about smart aviation professionals!
In this interview, Mark Leeper is interviewing Lillian Tamm.
Mark Leeper: Just to recap here, we’re talking with Lillian Tamm. She’s the president of Avicor Aviation. And it’s a real pleasure to be able to take your time for us to share some things about you and the history of your company. I noticed that going through your LinkedIn, that you’re a UPS grad, is that correct? University of Puget Sound?
Lillian Tamm: No, Seattle Pacific.
Mark Leeper: Seattle Pacific University. Okay. Awesome, are you a Seattle native?
Lillian Tamm: No I’m actually a San Francisco native.
Mark Leeper: Okay.
Lillian Tamm: And I went to high school in Napa before it had the vineyard thing going on in a big way and is as well-known as it is today.
Mark Leeper: Yeah, the old days.
Lillian Tamm: The old days, yeah.
Mark Leeper: Yeah, I’m from Fresno, California. Before wine and vineyards were romantic.
Lillian Tamm: Yeah, right.
Mark Leeper: A long time ago. So you moved up to SPU, Seattle Pacific, and you stuck in the northwest, is that correct?
Lillian Tamm: Yeah, more or less.
I actually worked in Chicago and Washington, D.C., and Florida for a little while in between, and earlier I took a year off and went and traveled around Europe.
Mark Leeper: So when did you start taking your direction into aviation, what made you do that?
Lillian Tamm: My husband, Allan, was actually in to aviation. He was working for some aviation companies, and really enjoy what he was doing, and I was a management consultant, and we literally married the two about 30 years ago.
Mark Leeper: 29 years ago. And did you do that up in the northwest, in the Portland area?
Lillian Tamm: Yes, that’s right.
Mark Leeper: And your husband, what was his background in aviation?
Lillian Tamm: He had worked for some airlines and some private flight departments, primarily in managerial roles.
Mark Leeper: Mm-hm.
Lillian Tamm: One day we were talking about aviation and what he did and what I did. We saw some needs in the aviation industry for business consulting services and just decided that we would join the two and create a management consulting firm focused towards aviation.
And that’s kind of how we got into it. We did a lot of work with people buying aircraft because that was an area Allan knew a lot about. And we also did a lot of market research, feasibility studies and analysis. It sort of evolved over the years. We had a couple of main areas of focus:, one was aircraft acquisitions, not so much sales, we do a little bit of sales, but more acquisitions. And for corporations we do a lot of analyses for companies buying aircraft and trying to make decisions about it, kind of early on in the process. We started helping companies analyze their aircraft needs, identifying suitable aircraft, negotiations, and managing aircraft completions once the aircraft were acquired.
The second area of focus is consulting projects for a lot of different types of aviation businesses. This includes feasibility studies, market research, business plans, strategic planning, and so on. As my background was more financial, I ended up adding the valuation factor to it, and that’s more what we’re focused on these days. Allan was diagnosed with ALS about two-and-a-half years ago and passed away about five months later. In the midst of all that, I transitioned into the role of president of the company.
Mark Leeper: I’m so sorry to hear that.
Lillian Tamm: Thank you. Since then, we have regrouped and we’re focusing more on aviation business valuations, appraisals and related consulting services.
Mark Leeper: I see. So before you were into the aviation, you say you were a management consultant.
Did you work in a specific industry?
Lillian Tamm: No, not in a specific industry. It was more general and I did some things for security firms; due diligence, market research, writing business plans and things along those lines.
Mark Leeper: All right, I was noticing on your website, you’ve got a tremendous menu here.
Feasibility studies, strategic planning, market research and assessment. Talk a little bit more about your specialty, the aspects of what you do.
Lillian Tamm: Well my main specialty right now is more focusing towards valuations of aviation businesses. I’m a certified valuator.
Mark Leeper: Mm-hm.
Lillian Tamm: So I take on the education in that area, and understand how to value businesses.
What makes us different is that very few valuators really understand the aviation industry and its ins and outs, the regulatory aspects and just the way that aviation works, especially business aviation. So that’s the market niche that we’ve been working in.
We work with a lot of companies that where, let’s say it’s a family owned business and someone is looking to retire, so they need to have a valuation because they want to sell the business. Or they are passing it to their children and so there’s gifting involved. And those things have to meet certain IRS standards and you can’t have a valuation done by somebody who’s not certified if it has to be filed with or be a supporting document for an IRS filing.
Mark Leeper: Right.
Lillian Tamm: We’ve valued aviation partnerships like, for example, there’s five guys that own a company and one of them decided they wanted to go a different direction and divest their interest in the company, so they came to us for a valuation because they needed to know how to make the deal work.
There are some companies that we do valuations for that basically want to know where they’re going with their business. They want to build it to a certain level. And so they have us do updates, say once a year or so, just to see if they’re on the right track and what they might need to change or do or build up or get a sense of where they really are with their corporate value.
So there are a lot of different reasons for having an aviation business valued.
Mark Leeper: Sure. Do you have a certain niche in the aviation industry, business wise, that you do more of?
Lillian Tamm: You know, it really varies. We have done companies that operate helicopters. We do companies that operate flight schools, that have little Cessna 172s, for example.
Mark Leeper: Mm-hm.
Lillian Tamm: We value air charter companies with large corporate jets. We do FBOs, MROs. We’ve valued MROs that serve everything from the small guy who fixes and maintains pistons mostly in his local area, to some MROs that service airlines. We’ve even valued aircraft manufacturers. For example, we did Mooney a number of years ago when they were just starting to get back on their feet.
It’s a real variety, but it tends to mostly be businesses in general and business aviation primarily, not exclusively but primarily.
Mark Leeper: Right, well in your discipline, there can’t be a lot of you, I’ve been in aviation for many, many, many years, and it’s not something that comes up a lot, somebody with your specialty.
Not a lot of competition?
Lillian Tamm: Not a lot of direct competition. There are some companies that do business brokering and then they will help a company come up with a value just for selling it. And there’s definitely a niche in that regard. Or some owners will have an accountant or CPA work on determining the value.
We’re like the CPA, if you will. To be certified as a CVA, we have to take a 6-hour exam, and then there are pretty heavy continuing education and recertification requirements every three years.
Mark Leeper: Right. So, your business got to be tremendously referral based, isn’t it?
Lillian Tamm: Quite a bit of it is, yes, quite a bit of it is.
Mark Leeper: Have you done specific marketing in the past or targeted a certain industry that you felt that is more right, low hanging fruit, so to speak?
Lillian Tamm: Not really. And that’s partially true, just because of all of the other types of consulting that we’ve done in the industry, which has definitely given us the expertise and understanding of the aviation industry. We’ve done a lot of feasibility studies for startups and even some aircraft manufacturers that have looked at adding different products or changing features on existing products and services.
A lot of what we do is fairly confidential stuff, so I can’t really mention who they’re for. So far we really haven’t focused on a particular segment within aviation, but recently, I’ve started changing the direction of the company more towards valuation, appraisals.
Mark Leeper: So you’re moving away from the aircraft acquisition?
Lillian Tamm: We still have a few clients that we do aircraft acquisitions for because they’ve been clients for a really long time and we’ve got that background.
But we are moving more towards valuations and consulting related to strategic planning with a company and things along those lines within the aviation industry.
Mark Leeper: Great, so does one major project that you can discuss stand out in your mind that would be kind of a benchmark or something that you’re real proud of, that you’ve accomplished with the company?
And it’s okay if you don’t have that because it’s a hard question, but especially when you’ve been in business as long as you have-
Lillian Tamm: It is a hard question. We do have some clients that we do regular business for but the nature of valuations is that most people don’t want anybody else really knowing that they’re doing a valuation.
Mark Leeper: Sure.
Lillian Tamm: Confidentiality tends to be a big thing when it comes to valuations.
Mark Leeper: Right.
Lillian Tamm: Lots of companies don’t want their employees being aware that some stuff is going on because they might think that something’s changing when it’s really not. The owners might just be trying to get a read on the company. Sometimes a company is having a valuation done as part of an application for a loan or line of credit to expand the business.
And it’s sometimes that there is a sales situation then they don’t want the market being aware of it.Clients or staff can leave if they think there are changes in the wind.
Mark Leeper: Right.
Lillian Tamm: As a result, our business does tend to be a little bit of an “under the radar” sort of a business.
Mark Leeper: Well that can, correct me if I’m wrong, but that can prohibit referrals too, that makes it more difficult if someone doesn’t want to know that you’re working with them, it’s harder for you to get referrals from people, isn’t it?
Lillian Tamm: It is true, although when somebody comes to us and we’re talking with them about doing a valuation, we can send them a list of people we’ve done business for and put them in touch with other people that we’ve done valuations for.
We don’t post it up on our website just because of privacy issues.
Mark Leeper: Right. So are you in a business development mode right now as you’re refocusing your company, are you also going out to find new customers at a high level? I guess we’re always in a business development mode but sometimes you’re not.
Lillian Tamm: Yes, more so than we have been for some time, and that’s primarily because of the refocusing, because I mean frankly when your husband passes away you kind of have to regroup and figure out exactly where things are and what you’re doing and where you’re going. And that’s definitely been something that’s happened over the last couple of years.
And now that I’ve made decisions about direction for the company, we are definitely in a business development mode.
Mark Leeper: Right. So could you describe a perfect referral or a perfect customer for you, so that the insider group and the rest of us can maybe help direct traffic or customers your way? Can you tell us what we might be looking for to help?
Lillian Tamm: Well, a perfect customer is somebody who is ready to have their business valued. Ideally, the best customers I think are the ones that have a bit of a plan or idea of what they want to do with their business, where they want to go, but don’t either quite know how to get there or are saying I don’t really know what my company’s worth and I’d like to get a read on it and then build it to a certain level.
We have had several companies that we did a valuations for, let’s say seven or eight years ago, and then they come back every year or two and have us do another valuation and see where they’re at. Some of them have used it with their local bank, because banks don’t always understand the aviation industry really well, and we’ll give them a complete, thorough report that talks about the industry and the company and what the regulatory environment is and where the industry is going because it’s not always exactly the same as the general economy.
It’s also not, if you’re dealing with a local bank, the local economy may be very different from what aviation business operates in because maybe they draw customers from a larger audience. And so there’s a lot that we can add for a client in that area. So the ideal one is one that will want to build the business or bring it to a certain level.
But if someone is looking at retiring, gifting their business to family, or other ownership changes, that’s an ideal time to also do it.
Mark Leeper: Mm-hm.
Lillian Tamm: You’re thinking, you’re planning, yeah, I’d like to retire or sell my company in a couple of years, I need to know what the value of my company is, so I can start thinking this through and what it might do to my tax situation and future plans.
We can definitely give them a really good starting point so that they can sit down with their accountant and work through, okay, how do we make this happen in a really good, viable way so that I can be in a good position financially at the end of the day?
It’s a very good tool for that. Yeah, there’s a lot of different situations where valuations are useful.
Mark Leeper: Sure, so financing sources, banks, maybe CPA firms, or financial planning sources, or services that cater to high net worth people, those are probably all good markets or good places to have them aware of your services.
Lillian Tamm: This is true, yes. And I’ve run into a couple of situations where, for example, there was one company that called me last year and had me do a valuation and they had had somebody else start on a valuation that was sort of in their local area. And after about a month the guy came back and said, I don’t understand aviation well enough, I have to give you this back and I can’t do it.
You’re going to have to find somebody who understands your company and the aviation business.
Mark Leeper: Do you network with any people that specialize in aviation accounting or aviation law, for instance?
Lillian Tamm: A little bit, I’m kind of building that area right now. I do network with some of those people, yes.
Mark Leeper: Right, and so your services you’re providing right now, are you actually being involved in aircraft transactions from an acquisition or sales side? Is that something that’s, that you’re doing currently? Or is it that’s its past service?
Lillian Tamm: Acquisitions? A little bit currently, not a big amount.
Mark Leeper: Right. I was wondering about your one aspect of your business and that was helping to consult and help corporations evaluate their needs for transportation.
Lillian Tamm: We do pretty thorough analyses in that area and we’ve done some for some larger corporations that have been in a situation where they’ve been not exactly sure what their next aircraft should be, or if they should get one at all.
And we do a very user friendly type of report. We present to boards of directors or senior management and a lot of people that don’t necessarily understand aviation, even the value of it sometimes.
Mark Leeper: Sure. Do you have any type of information that you put out to people that will respond for information?
Off your website? Do you have any type of form that they can fill out, or questionnaire in your evaluation process or marketing process?
Lillian Tamm: We have forms on the website that people can fill out to give us an idea as to what their area of interest is. And then we usually follow up with a phone call, have a discussion with them, and then follow up with something more tailored to what they really need.
We’ll send out client lists and comments from clients, and if we need to send out references we can do that.
Mark Leeper: But if you were to put a goal out there for yourself in the next quarter for instance, do you have anything in mind that comes right to the tip of your tongue for advancing your business?
Are you wanting to grow this specific business by a certain percentage?
Lillian Tamm: Yes, to a degree, I mean, the real thing is we’ve just come to the point of deciding that we’re going to focus on the valuation more than anything within the last month of two.
Mark Leeper: Mm-hm.
Lillian Tamm: So, I would say yeah. Building, as a percentage, I’d like to double or triple it.
Mark Leeper: Okay.
Lillian Tamm: And what the timeframe is of that, I’d say six to twelve months. I mean, one thing is, the services we provide are not the sort of thing where somebody says, okay, I want it and they buy it and you are done.
These projects tend to be six to eight, even sometimes 12 weeks, depending on how ready a client is. For instance, what state their financials are in. Everybody’s information is different. No two sets of books are identical to each other, even if they are using the same accounting program. There are so many differences in the way that companies do things. And then we always go out and make a site visit to see the business and talk to the people.
Coordinating all those things to have all the right players in place at the right time sometimes can take a little while. Especially if you’re dealing with a smaller business where maybe the main guy is also the guy who’s flying a lot of the flights or is generally quite busy, and then you have to wait until his schedule has a break in it.
Mark Leeper: Do you carry people on staff part, full-time or do you draw off of a conduit of experts to gain help?
Lillian Tamm: Primarily I’ve got a couple people that work for us regularly, but we also have a group built up over the years that we regularly call on for specialty information analysis, technical data, technical analysis to do with specific types of aircraft, all kinds of things like that.
So yes, we’ve got a pretty good network that we’ve built up over 29 years of business, people that we use regularly definitely.
Mark Leeper: Sure. I know one nice thing about aviation, it’s a small close group of people. I’m sure everybody’s going to do everything they can to help and pitch business your way, that’s for sure. I know I certainly will. I have a chance to communicate with 70, 80 different corporate flight departments all the time that know lots of people.
So, I’ll certainly pitch in and refer as many people as I can to you, too. So- Yeah. Yeah, that’s great. Are there any questions that I should have asked that I didn’t that you’d like to?
Mark Leeper: Any topic you’d like to talk about your business or something that I’ve missed that will help you discuss?
Lillian Tamm: Yeah, I’ve just been trying to think about that. We have done, and definitely still do like feasibility studies and business plans and provide related advisory services. We regularly advise investors looking at projects in the aviation industry who want to understand it better. But we are currently focused on targeting aviation business valuations and appraisals as the “meat and potatoes of the business” going forward.
Mark Leeper: One question I’d like to ask you is what’s your impression right now of the aviation economy, so to speak? Where would you put your finger on the pulse of our business?
Lillian Tamm: I feel a sense of a little bit of a wait and see right now. And maybe it’s because of the elections coming.
Mark Leeper: Mm-hm.
Lillian Tamm: And kind of where things are going to politically fall. And this I think tends to happen before every major election, like every four years, there tends to be a bit of that pause.
And part of that is just looking at the aircraft resale market because we also do aircraft appraisals.
Mark Leeper: Mm-hm.
Lillian Tamm: And we do some regular fleet analyses for certain companies. Some rather large companies actually. And so I follow that segment of the industry quite closely, and yeah, I would say there’s a lot of wait and see.
I think there’s a lot of potential right now for valuations though in part because the aging of the population in general. So I think there are a lot of people that are getting to the point where they’re thinking, I should be retiring soon. But how do I get from here to there?
Mark Leeper: Yeah, and the other ones that are tired.
Mark Leeper: [LAUGH] Yeah, the used aircraft market has certainly been interesting to watch, hasn’t it?
Lillian Tamm: It certainly has.. One interesting thing that I discovered in doing an analysis for an investment house recently when I looked at the aircraft resale market and how GDP went and how the economy was going and stuff and all, I noticed that they used to be pretty closely aligned as far as direction is concerned and then they split up a few years ago.
And I noticed that for some reason, and I haven’t looked at this in about the last three months let’s say, but up to that point, it looked like the resale market and the Dow Jones average were following the same trend.
Lillian Tamm: Which is interesting.
Mark Leeper: Yeah, that is.
Lillian Tamm: Yeah, and nobody that I’ve ever seen has noted that before. Actually if you go on our website and look under the consulting. It says articles. I just did a little article on it. Kind of starting to do a little bit of marketing.
I posted it, I think it was back in May or so. It was just kind of an interesting kind of, “Gee I never noticed that before.” And I am not 100% certain if that still holds true over the last three months or not but I am thinking it does. I should probably look at that again!
Mark Leeper: Yeah, that is interesting.
Well I certainly appreciate your time. And I hope I’ve asked the right questions. Again our goal’s to find out more about you and help you grow your business. So I’m sure this will come in handy to help us all do that.
Lillian Tamm: Well, I definitely appreciate it Mark.
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