When you pick up a magazine and a snack as you make your way to your flight, you may be supporting a local small business! The airport concession industry is a vibrant small business community full of opportunities for entrepreneurs. Because of their unique environment, airport contractors have high potential for revenue, if they’re up for the specific challenges airport concessions present.
Opening a Small Business in an Airport
Whether they’re kiosks or storefronts, airport businesses have a built-in high volume of customers who have nothing to do but sit around waiting or wander the shops and restaurants in the terminal. Often hungry or bored, travelers are a captive audience. Thousands of people visit an airport concession on a given day.
The revenue from such heavy foot traffic is exponentially higher than a business on a main street, but you and your employees have to be willing to put in the hours. After all, airports are open all day, and often all night, 365 days a year.
Similar to government contracting, setting up shop in an airport comes with extensive standards and requirements, which vary with each airport depending on its state and its ownership structure. But if you’re up to the task, the returns are well worth the prep work. Airports also offer a non-traditional but very lucrative franchise opportunity.
Financing and Resources for Airport Concession Businesses
Because airport concession businesses are operational unicorns in the small business space, not many lenders understand the business model well enough to consider them viable for loans. Everything about them is atypical, from cash flow to business structure, which triggers traditional lending algorithms to consider them too risky.
In the Spring 2022 issue of Airport Experience Magazine, Lendistry CEO, Everett K. Sands, says that to make an impact in the airport concessions industry, small business lenders have to be willing to dedicate time and resources to understanding their structure, redefining eligibility requirements and payment schedules, navigating state-by-state funding programs, and using technology to help small business owners complete the necessary documents. “We’re trying to fill that abyss,” he says.
The U.S. Department of Transportation’s Federal Aviation Administration makes it easier for underserved small business owners to become airport concession contractors and access capital. The Airport Concessions Disadvantaged Business Enterprise (ACDBE) program, in which Lendistry is a participating lender, helps ACDBE-certified entrepreneurs who own all or part of an airport concession business gain contracting opportunities and access capital.
The Airport Minority Advisory Council (AMAC) is a nonprofit with a mission to prepare minority-owned, women-owned, and disadvantaged businesses for contracting opportunities in the aviation and aerospace industries. Their Annual AMAC Airport Business Diversity Conference brings current and potential airport concession business owners together with resource providers so they can build knowledge and support networks.
Do you think your business is the perfect fit for an airport? Check out the ACDBE certification requirements.