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what you’re doing and will be shown
the door. When running an airline,
you will find that major travel
agencies can take up to 6 months (or
more) to pay their bills, if they pay at
all, which will cause major cashflow
problems. Once the fuel companies
don't give you any more credit, you
don't have long to go, because
people who owe you money
definitely won't pay if they can get
away with it.
Also, things only work out cheaper if
you can afford to fork out the
money from the start. Buying your
own bowser, for instance, instead of
positioning your helicopter to the
local airfield for fuel, will probably
cover all that empty flying and
unnecessary landing fees inside three
months, but you have to have the
money in the first place—paying as
you go along should be avoided as
much as possible, as it will usually
kill any project stone dead.
Don't depend purely on loans. In
fact, you probably won't get one till
the lender sees some input from
another source (preferably yours), so
you may need to find a Venture
Capitalist who would be willing to
invest in your project. These sort of
Setting Up A Company 291
people supply money in return for
stock (shares in the Company),
typically expecting to be free of their
obligation in about four years or so
with a handsome profit (although
they could make a loss). The major
benefit to you is that they provide
ready cash and a bit of stability
without your spending power being
drained continually by interest
payments. Although a business plan
is important, you will find that your
personality, or those of others in the
plot, will account for at least half of
the decision.
Use accountants, by all means (you
will need one on board for the
business plan), but never, ever let
them run your business, unless
they’ve either been there themselves
or have gone to business school. The
problem is, their training makes
them very narrowly focussed, and
they often fail to see the big picture.
Mind you, pilots running businesses
have limitations, too, since they’re
programmed to fly and don’t always
realise you can make more money by
not flying sometimes.
Business Plan
This is needed to raise capital—it is a
brief sketch of your proposals,
detailing how you mean to repay the
money, together with how things
will be run (this includes details of
the management team). Like a cv, it
should be short and to the point,
somewhere between a quarter and a
half inch thick, and, provided it is
well thought-out, need not be too
polished, though it should still look
neat, tidy and professional. Here are
some suggested headings for a start:
· Introductory letter. Why are you
writing the plan (to raise money
for expansion? An aircraft?).
· Title Page. Name phone, date
completed.
· Table Of Contents.
· Summary of proposed venture.
Description of business.
· How much needed, and how it
will be used.
· Amount already invested;
equipment, market testing , etc.
· Security—property, stock and
other assets.
· Background info—Limited
company? plc? Sole
Proprietorship?
· Mission Statement. Key
activities.
· The industry. Niche available.
Competition.
· Management—organisation, cvs,
proposed benefits.
· Target markets—individuals or
corporate.
· Advertising
· Land, buildings and equipment.
· Operations—work flow,
personnel.
· References
· Financial Plan—capital
requirements and sources to
data, profit/Loss—cash flow for
at least one year; projected
income for at least one year;
proforma balance sheet, showing
292 Operational Flying
projected current and fixed
assets, and liabilities. Break-even
calculations.
· Risks and problems; worst case -
what if demand falls, or you get
more competitors, or overheads.
What's left if you don't succeed?
Avoidance of risks. Impact of
risks you can't avoid.
The magic figure to survive in the
small charter world is 500 hours per
aircraft per year—that's revenue
hours, ten a week, which doesn’t
include training, etc. Remember, the
object of the company is not to fly,
but to make a profit so that you can
live, or to provide the investor with a
　
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