HATTIE: Hi. I'm HATTIE BRYANT, and this is Small Business School. Every week here, you can learn from the pros how to start and grow a company. The pros are the small-business owners themselves who share their secrets. Annually, Entrepreneur magazine publishes Dun & Bradstreet's research on the best locations in the US for a small business. When Ft. Worth, Texas, topped the list, we decided to take a look for ourselves.

(Voiceover) There are many ways to get to Ft. Worth, Texas, and this may be the best way: a ride via private aircraft at Meacham Field just five miles north of downtown.

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Unidentified Woman #1: How's it going? Good to see you.

HATTIE: (Voiceover) Let the team at Texas Jet throw out the red carpet and bring your ground transportation right to the door of your airplane. No lines, no crowds, no delays, red carpet treatment all the way.

NetJets Pilot: (Voiceover) When we pull up on the ramp, they come out and, you know, roll out the red carpet for us, literally.

HATTIE: (Voiceover) Reed Pigman developed Texas Jet out of Piper Southwest, an aircraft sales company he purchased in 1978. Today, he operates 13 hangars totaling more than 225,000 square feet and supplies two-thirds of the fuel at Meacham.

REED: I have a filling station for airplanes. That's basically what it is. (Voiceover) The difference between our operation and a gas station you drive your car to: we have to bring a fuel truck up to each aircraft.

Unidentified Man #2: OK.

REED: Well, let me show you around. This is the front door our customers come in. During the holiday season, we have spicy apple cider and cookies, and right now we're out because we had a rush on them.

HATTIE: You sell fuel.

REED: Right.

HATTIE: But that's not what they're buying from you.

REED: No. They're buying fuel, but what they really want is not the fuel. Obviously, they need the fuel to make the airplane fly. But they want the other amenities that we offer. So right down the hall here, we have our Snooze Room. This is a place where they can come and sleep for a half an hour, an hour. And they come back to our front desk, and they say, `Oh, I feel so much better. I'm totally refreshed. I'm ready to go.'

They want to know, when they pull up on our ramp that the boss in the back of the airplane will be taken care of. We have the Courtesy Office here, set up with Internet access. Then for larger groups, down the hall we have our Conference Room. That if they called ahead and want a rent car, or if they call us 10 minutes out and say they want a rent car, they want to know that we'll pull it right up to the airplane door for them; that if they need a limousine, we'll call up for them and it'll be there.

They need to know if they need catering, we'll get it for them. It'll be good catering, it'll be there on time. One of our most recent additions is a workout room, the Recreation & Fitness Center. Here, we have a treadmill, a exercise bike. We have showers down there.

HATTIE: (Voiceover) Texas Jet was voted by readers of Professional Pilot magazine as one of the top 10 independent, fix-based operators in the United States. And in 2000, Texas Jet, Inc. became the only independent FBO to receive the Phillips 66 Aviation Wings of Excellence Award. Prior winners have been big chains with multiple locations. Reed, when did you fall in love with airplanes?

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REED: I grew up in the airplane business, around airplanes. My dad had a company that he started on Meacham Field here in the late '30s called American Flyers. It was a pilot-training school. During the Second World War, he trained a lot of American Airlines pilots because American lost a lot of their pilots into the draft. After the war, he bought some surplus DC-3s and started an airline charter business. Both those companies moved to Ardmore, Oklahoma, in the '60s. He died in '66.

My mother sold the airline portion of the operation in the late '60s. I ran the flight school part of the business in Ardmore when I got out of college in the '70s. And by 1978, I had decided that I wasn't wild about the flight school business. I really wanted to come back to my hometown here in Ft. Worth, so I sold the company.

It was a tough decision to make because--gosh, it'd been in my family for nearly 40 years. But, you know, the flight school was not doing well. It was losing money. And I had to make that decision, and that's, I guess, one of the decisions that I've had to make when I felt that, you know, `My back's up against the wall.' I'd look at the cash flow. The cash flow wasn't there. And I said, `I've got to change businesses.'

HATTIE: When did you think there's an opportunity in servicing the pilot rather than flying airplanes yourself or teaching people?

REED: Sure.

HATTIE: I mean, when did you get the light bulb, `There's really an opportunity here'?

REED: When I made the decision to come back to Ft. Worth, I looked around. I looked around the Ft. Worth, the Dallas area, what the airport situation was. And when I came to Meacham, it was the perfect place because there were two other operators on the airport at the time that sold fuel--and that's what my main business is.

I talked to a lot of the pilots around, and they'd say, `Well, we're just not wild about the service we're getting.' And so I said, `Wow, that's a great opportunity.' So there was a small, struggling aircraft sales company that had an option to lease the land where my first two hangars went. So I purchased that company.

I stayed in the aircraft sales business for a couple of years.

HATTIE: So you were selling airplanes.

REED: I was.

HATTIE: Was that your first idea, to sell airplanes?

REED: Well, I thought it would be fun. I grew up being in the flight school business and flying in small airplanes. And I said, `Oh, my lifetime goal would be to have a Learjet, to fly a Learjet.' I thought that would--`Boy, I'd be happy if I had a Learjet.'

HATTIE: You could just die and go to heaven in your own Learjet.

REED: And I'll be darned, that Learjet almost put me out of business.

HATTIE: What do you mean?

REED: Because I got in the sales business during the same time that I'd built these first two hangars, as an executive terminal, to sell fuel. The city of Ft. Worth would not let me sell fuel for the first year...

HATTIE: Why?

REED: It was due to political pressure from competitors on the airport. So I had two big hangars, basically, empty. You could throw Frisbees in the hangars because there weren't any airplanes to get in the way.

HATTIE: So we weren't succeeding right away.

REED: No, no, no. I had a lot of airplanes in our sales inventory that were floor planned at the bank. In 1980, interest rates were 21 percent. Values of the airplanes were dropping, and it almost put me out of business. But I sold the airplanes. I focused on fuel. I decided that my niche was going to be the executive terminal, selling fuel, taking care of pilots and hangaring airplanes.

HATTIE: When you were looking at your numbers, how did you figure that this was the best profit or revenue stream?

REED: Because I figured out that I was not cut out to sell airplanes.

HATTIE: What does that mean?

REED: Well, I lost a ton of money, number one. And I'm not a real hard-sell person. If somebody comes to look at Texas Jet and to see whether or not they want to base an airplane with me, I can do a darned good job of selling them on Texas Jet. But as far as selling this airplane, it's like, `Let me make you a deal on this beauty right here.' That's not me.

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HATTIE: Where'd you get the money to start?

REED: I mortgaged the family farm.

HATTIE: You literally have a farm?

REED: Well, not anymore. I sold it. I had a ranch. The bank that I dealt with there for a long time--it's a great bank, but they didn't want to loan the full value of what it would take to build these hangars. So I went to the Federal Land Bank and actually mortgaged the family farm that had been in my family for many years.

HATTIE: OK. So when your dad's business sold, there wasn't enough cash to really do anything with next.

REED: No, it was a losing business. And when you sell a losing business--I felt I was lucky just to stop the bleeding.

HATTIE: OK. So first lesson: Just because you have a business and you sell it doesn't mean you walk away with anything.

REED: No. No, no. That's correct, yeah.

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REED: Airplanes always need fuel if they're flying. Pilot training changes from year to year, whether or not the airlines are hiring and what the perception is of what jobs are available. I've also been in the aircraft charter business, and that is very--not seasonal, but it fluctuates from good economies to poor economies. But in the fuel business, even during the rocky years in Texas with the oil bust in the '80s and the banking bust and the real estate bust, we never really had a real bad year.

HATTIE: Give me an idea of what it costs to have a plane if I want to get from point A to point B whenever I want to, instead of going on the commercial airlines.

REED: It depends on how fast you want to get there and in what kind of style you want to go.

HATTIE: OK. Well, give me sort of the spectrum.

REED: You can buy a Cessna 150, probably, for $10,000, $15,000, $20,000. It burns five gallon an hour. Or you can go all the way up to a Gulfstream 5 or a Global Express, which are in the $40 millions.

HATTIE: But cost is not their concern. It's more time, right?

REED: Oh, exactly. It's time. It's difficult to make a corporate airplane justify itself on paper; to say, `Oh, yes, it's saving us money.' It's not going to save you any money. But what it will do is save a lot of time. I've got a company based with me that has a Lear 31, and they fly that almost every Tuesday, Wednesday, Thursday, Friday, Saturday, five days a week out and back the same day. They take a group of people, go to one of their locations, and sometimes they'll cover two locations in the same day, and they're back. There's no way they could do that on the airlines. On the airlines, it would take two days, maybe three days to accomplish what they do in one.

HATTIE: (Voiceover) Not just for the Fortune 500, not just for the rich and famous, small-business owners have an alternative to the crowded, commercial airports.

REED: (Voiceover) We've seen a growth in the fractional aircraft-ownership market, selling a share of an airplane, 1/16th, 1/8th, 1/4.

HATTIE: (Voiceover) Pilots for Flight Options explain.

Unidentified Man #3: What normally we have is so many hours to show up. So if you call up and say, `I want to leave Texas Jet at 3:00 in the afternoon on Saturday,' at 2:00 in the afternoon on Saturday, we'll have an aircraft here ready to take you to the destination of your choice.

Unidentified Man #4: Battery switch.

Unidentified Man #3: Battery switch, yes.

HATTIE: So the way you-all make that work is you own a bunch of planes. And how many does flight options have?

Unidentified Man #3: Well, right now we have over 80 aircraft.

HATTIE: Eighty?

Unidentified Man #3: Yes, ma'am.

HATTIE: So, that way, all your customers, all your owners, can have what they want when they want it.

Unidentified Man #3: Yes, ma'am. And if, for some reason, your particular aircraft that you own isn't available, then we upgrade you up to the next-size aircraft.

HATTIE: Did you put your ideas, back then, in writing, in a business plan format of any sort, so that when you went to the bank, you could tell your story?

REED: Oh, sure. Yeah. And I ran the numbers. I said, `This is how much fuel I think I can sell. These are my costs. This is how much I think my margin's going to be.'

HATTIE: How did you keep your eye on the goal? Did you imagine what you have today 20 years ago? Did you have it in your head--a picture of it in your head?

REED: I did. I remember driving by Meacham Airport and looking at the space, and I said, `This is the place where I want to build some hangars.'

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HATTIE: How did you keep dealing with the no's?

REED: I guess I'm very stubborn. I just don't like to take no for an answer. When the city told me initially that they wouldn't let me sell fuel, I said, `Well, I'm still going to build the facility, and I know eventually I'm going to be able to sell fuel.' I waited a year to be able to sell fuel. Cash flow was almost non-existent during that time. I had two big, empty hangars because nobody wanted to base their airplanes with me because they were afraid that the other people selling fuel would not come and sell them fuel if they were based in my hangars.

So I had virtually nothing. Then it opened up. I got to sell fuel.

And, slowly, I started building the business. But at the same time, interest rates hit 21 percent. I had these aircraft in my sales inventory that I couldn't get rid of because the values were dropping monthly. I was making these horrendous payments on the two buildings because those rates floated up to 21 percent, as well as the notes on the airplanes. And for a while there, I thought I was going to go out of business. And I'll tell you what, it was that time, I think, that made me a better business person than any other time in the world because my back was against the wall.

I said, `Hey, I've got to do something. I've got to collect money from anybody that owes me money. I've got to sell more fuel to bring more money in.'

And, also at that time, one of my competitors on the airport said, `Well, Reed'--he told me he had just made the last note payment on his hangars, and he was dropping his fuel price 20 cents a gallon. And, you know, I said, `Oh, my goodness, I can't drop my fuel price 20 cents a gallon. I'll go out of business.'

HATTIE: Right. Right.

REED: So I said, `The only thing I can do is try to give excellent service so that people that fly on this airport and fly into the airport are willing to come to me and pay 20 cents a gallon more for better service.'

HATTIE: All right. You went to bed at night thinking, `How do I do this? How do I do this? How do I do this?'

REED: Right.

HATTIE: So that's when all your creative juice started flowing and you said, `I have to be different.'

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REED: I have to be excellent. I have to be excellent at what I do. I can't just be OK, because a pilot--if the service is OK, they're probably going to go where it's cheaper. It took me a while to realize that I've got to charge a fair price for the fuel I sell. (Voiceover) I've got to make a margin on that that I can--I try to pay our people here at least $1 an hour to $2 an hour more than average

REED: (Voiceover) ...because I want to keep the best people here. And to do that, I've got to be able to sell my fuel, not gouging people, but I've got to sell it at a decent price. I stopped letting myself get beat up by people that would say, `Boy, I got fuel just the other day that's 30 cents cheaper than what you're selling it.' And, you know, I say that, `I have provided services for our pilots--for you, sir, or ma'am such as crew cars that you can use to go to your hotel overnight so you don't have to rent a car and charge that to your company, or you can go to lunch and, the same thing, you don't have to rent a car and charge that to your company.' I offer air-conditioning units to cool the airplanes in the summer. We have covered parking, so that when their cars are parked there, they're not out in the Texas sun or in the weather. And those things cost money.

And for me to offer those services, I have to charge a fair price for the fuel. Generally, people will pay more for higher quality because--you know, I'm a big stickler on quality. We try to train our people, our new employees, that when a customer comes to our front desk and has an experience at Texas Jet, they're not only comparing us with the last place they left and the next place they're going to, they're comparing us--they're rating us against, `Where did I go that I had the absolute best service ever? Was it at a hotel? Was it at a fine restaurant? Was it at Disney World? Where was it? This is where I had that absolute best service.' Then, where does Texas Jet stack up? Are we almost the same, or are we way down here? And it transfers over from business to business.

HATTIE: So you see your competitors, or the folks that are setting the standards--service standards around here are other providers of upscale service.

REED: Subconsciously, they are comparing us to that best.

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HATTIE:

HATTIE: There are 4,000 fix-based operators in the US, and Texas Jet has been in the top 10 two years in a row. Reed is too humble to say that he can't learn from others who run FBOs, but when you are the best, where do you go for inspiration? Reed now looks to the hospitality industry for service-improvement ideas. How does a five-star hotel treat people? How does a white-tablecloth restaurant take care of customers? If you are good enough, as Reed is, to be at the top of your own industry, don't rest. Find your inspiration outside your inner circle. (Voiceover) You can learn more at SmallBusinessSchool.org. There's streaming video, transcripts and interactive study guides.

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(Voiceover) Downtown Ft. Worth is buzzing, and with much thanks to the billionaire Bass brothers.

In the '80s, they created the legendary Sundance Square. Existing structures were renovated and new construction was done to bring residents to the core of the city. The family's newest project, the $60 million Bass Hall, is the home of the Ft. Worth Symphony and Opera.

REED: (Voiceover) I was talking to one of their employees one day, who, I guess, was a mentor to me.

And I said, `Bill, this is just wonderful what the Bass family's doing downtown. It's just spectacular. I'm so glad they're doing that.' And then my friend says, `Well, Reed, what are you going to do for the community?' I said, `Hey, Bill, you're crazy. I don't have that kind of money. What are you talking about?'

HATTIE: You don't have millions of dollars.

REED: No. `What are you talking about, Bill?' He said, `Well, if you don't have the money, then donate your time.'

HATTIE: (Voiceover) Just part of Reed's volunteer work involves serving on the Small Business Committee of the Ft. Worth Chamber of Commerce.

Unidentified Man #5: We've sort of got out of that game and...

Unidentified Man #6: I give him grief all the time, but that's because I have so much respect for him and what he truly does in giving back to this community.

HATTIE: (Voiceover) He presided over the annual awards event that recognized the accomplishments of seven small businesses.

REED: Wow, what a great turnout. Thank you so much for coming.

HATTIE: Recently Dun & Bradstreet did some research that was published in Entrepreneur magazine. And they said that Ft. Worth, Texas, is the best city in America for a small business. Now you've been here 20-something years doing business. Why did they come up with that conclusion?

REED: Well, HATTIE, there's probably several reasons. I think that the atmosphere in Ft. Worth is very pro-business. The city supports small businesses, so does--the business assistance center was set up to help people get started in business. The Chamber of Commerce supports small businesses. And, also, I think there's a good--I guess you'd call it a brain pool or a talent pool here.

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HATTIE: (Voiceover) Meacham Field is an ecosystem of small businesses. We visited the 60-year-old flight school, American Flyers. And in its 13,500-square-foot hangar, Jet Works does everything from heavy maintenance on turbine engines and air frames to complete avionics installation packages. Like Reed, each company does only what it does best. How do you keep the folks that interact face to face with the customers excited about what they're doing and concerned about that customer? Because I think that's hard. You must have some secrets.

REED: It is hard. I think that the most important thing that we do is let them feel that what they're doing is important. (Voiceover) They're dealing with airplanes that cost upwards of $30 million and $40 million. And they're able to take care of those airplanes, to get them fueled, to tow them, to, you know, put the catering on them. And that is very rewarding for these folks.

HATTIE: What is the new employee process?

REED: Well, we require, first of all, that anybody that fills out an application to be a line service technician has had six months' experience towing and fueling aircraft; a lot of it ex-military, which is real good experience. We would prefer general aviation experience, but a lot of times we have to get military. Then we send them for a drug test. We have a drug program. We do background checks, criminal checks, honesty tests and things like that to see if they're going to fit in. And, probably, we weed out at least half of the job applicants. Job applicants are hard to find now. It's very difficult to find anybody to come in and fill out an application. And of those, half of them we wash out, at least, in the interview process, application process. And then, when they come to work, we put them through some pretty rigorous training.

MILDRED WHITED: How far out are you?

HATTIE: (Voiceover) Mildred Whited has been with Reed from the beginning.

MILDRED: Thank you. And it's service. Everyone has fuel, but some of them don't have the service we have. In fact, none of them do.

HATTIE: Why do you think MILDRED's been with you from the beginning?

REED: I think MILDRED has a love of this business. She actually worked for my father when he had his company here at Meacham back in the late '50s. She's been with me from the start. She's great at dealing with people. She's taught me a lot. She's a very good judge of character. She can say, `Well, that person, I don't know. I'm not sure about that person.' Or, `Oh, there's nothing wrong with him.' And, sure enough, couple weeks later, something happens or whatever where she was right. Aviation appears very glamorous and very profitable. There are a lot of people that see those $40 million jets and say, `Whoa, man, if I just do anything in aviation, I'll just make a bundle of money.' It's very competitive. In fact, there's a saying that says, `How do you make $1 million in aviation? Start out with $5 million.'

HATTIE: Yeah. Well, then why did you keep doing it?

REED: I guess I could either say because I just love the business, but it probably had to do with I had two notes to pay off, and I didn't want to declare bankruptcy. And I said, `I've got to do whatever it takes to turn the company around to make a profit so I can be a success.' Because I didn't want to go out of business and not be a success.

HATTIE: OK. Pride.

REED: Oh, pride, yeah. HATTIE: Pride.

REED: Pride. I've got two daughters; they're five and eight. I'm sort of a late breeder.

HATTIE: Only a Texan would say `late breeder.' Come on. OK, you had your children late.

REED: Cutest thing happened a couple of months ago. The oldest one, Macy, and I came out here on a weekend and I was doing something in the office. And she saw one of my business cards, and she said, `Oh, you're the president of Texas Jet.' And she thought that was just really pretty cool. And then she thought for a while and she said, `Daddy, when you die, who's going to run Texas Jet?' And I said, `Whoa, Macy.' I said, `Well, I hope that's not for a while, but I don't know. Maybe Mommy or--would you like to run Texas Jet, Macy?' And she said, `Yes, I would.' And, man, I almost cried. That was so sweet. And, you know, maybe someday they'll like to do that and maybe not. That's going to be their choice.

HATTIE: What will she need to learn in order to be the leader of this kind of company?

REED: I think she's going to have to learn how to be a good person. I think she's going to have to learn how to make decisions and to take responsibility for her actions and everybody else's that work here. She's going to have to learn when it's time to tell somebody they're not doing their job correctly and to please do it correctly. And she's going to have to be sensitive enough to the customers to get the feedback from them that says whether or not we're doing our job right.

REED: (Voiceover) Treating people with respect and integrity and dignity.

HATTIE: If you're the best in your industry, don't rest. Find your inspiration outside your inner circle. We'll see you next time.