There is nothing quite like the challenge of running your own business. I can never imagine taking a job again as I have come to love the independence and creative drive your business presents you with every day. However owning a business can be a love-hate affair. I love it when things are going well and hate running a business when the business starts to suffer or external circumstances put the your business at risk.
My first business was a flying school. The first year was a fantastic year, the business was growing, I was making decent money and was thinking to myself, wow this is easy, I should have done this years ago.
I remember one of my flying students who was a very wealthy business man asking how my business was going. I replied with a naive optimism that it was going great . He looked at me and said that’s great Damien but you know it’s not going to last; something will happen to put your business under stress, so be prepared. I remember thinking ‘What a pessimistic person, why would he say such a thing?’ I now realise that I had no idea what he was talking about because I had not much experience in running a business (only 12 months) and I had not experienced the highs and lows of the normal business and economic cycles.
The first time I almost lost the business
That second summer in business we experienced the longest period of consecutive rainy days in one hundred years. My flight school experienced almost seven weeks of continuous rain. A flight school cannot conduct flight training when it is raining or if there is low cloud. This effectively closed the business for seven weeks. Imagine telling a successful restaurant owner, ‘I’m sorry we are closing the road and footpath to your restaurant for two months, and no one will be able to get through’.
Two of my competitors went out of business during that time. I burnt through my entire cash reserves (about $25,000) as i still had fixed costs for aircraft and office space, and was a week from letting my staff go and looking for a job when the weather finally cleared. Although I try to put all my faith in God I could not stop the seeds of doubt and worry from invading my mind during this time.
I have a family to support and the thought of not having enough to support them with was terrifying.
The second time I almost lost the business
Now fast forward almost two years into the future. The business is doing well, I have grown the flight school from one to two flight schools and have just opened my third flight school.
I have also appointed a full-time manager to manage my Queensland flight schools while I establish a flight school in New South Wales. Once again I was lulled into the false sense that things were going well and the only way was forward.
In the space of two weeks my manager resigned with little notice and then my other Senior Instructor resigned also without notice and then took five of the our students across to my competitor (an old friend of his apparently).
The business went from being profitable to bleeding money within a four week time frame. At the same time there was a fatal parachuting aircraft accident at one of my flight schools airports. This created a lot of fear in the marketplace and effectively stopped any new fight training enquiries for about two months.
I had to make a very quick decision to save the business. I decided to close the New South Wales Flight School (that was still growing) and return to Queensland to rebuild the two flight schools that were suffering. Once again I burnt through my entire cash reserve (about $20000) and the business started to turn around at the final hour.
I am happy to report that I have rebuilt with the help of many wonderful individuals both businesses again. The last two years have been relatively stress free. That is not to say that it will always be smooth sailing but I feel I am better prepared now to handle the unpredictable events that get thrown my way.
I now understand why most businesses that survive the first five years go onto to survive another five. It is because the owner has learnt what works and what does not work in that business.
The owner has most likely been through at least one down turn in the economy in that five year period to test their business skills. I am now coming up on my fifth year in business so God willing I am looking forward to the next five.
So what exactly have I learnt from almost losing my business twice then rebuilding it and what advice can I impart ?
- Your business is only as good as its last week.
- Put as much cash away in reserves as you can during the busy period for your business so it will survive the lean times.
- Do NOT grow the business to quickly, I made the mistake of using most of my profits on growth. I should have concentrated on larger cash reserves and improving the business model.
- More revenue does not always equate to more profits.
- Do not put too much reliance on one or two staff members. This creates a single point of failure, if they leave with little or no notice they can place your business at risk.
- If you own a service business as the owner you MUST keep in contact with staff and customers regularly to sense how the business is travelling and to build long lasting relationships.
- Keep an eye on your financials (cash flow) daily
- Spend at least a third of your time on marketing.
- Put your trust in God that eventually he will supply your every need providing you work with him.
- If your business is not working change fast and innovate into a new area, for instance I started a DVD learn to fly business after the first time I almost lost the business and this has generated another income stream during adverse weather periods.
- Remember we grow spiritually during adversity, enjoy the process and know that there is a greater plan at play.
- If you’re not sure on how to save your business get advice from a mentor or from someone who has been in a similar position and survived.
- Pray to God and ask for guidance during the good and bad times.
I am grateful for these experiences, spiritually I have learnt to put my faith in God more and not to worry as much. I have discovered that God has always supplied exactly what I require usually at the final hour.
I have also discovered the less I worry the less unpredictable events materialise that would cause the worry in the first place. It is almost like the trials have been placed in our path to force us to put our reliance and trust in God.
The advantages of owning a business far outweigh the disadvantages. I have learnt more about myself, other people and God in one year in business than five years as an employee.
Also remember your business is NOT YOU, it is separate from you and in the end it will all be lost in time, so why stress over what will eventually be lost anyway.
Remember to have fun and keep God near !