After El Nino, Flying Club Sees the Light

Long Beach Flying Club & Flight Academy has just begun to stabilize after hitting severe turbulence last winter when El Nino rains soaked sales and forced owner Candy Robinson to lay off almost half the employees at the 17-year-old company.

Robinson now spends much of her time on clerical duties, even emptying the trash, as she struggles to get by with a tiny staff in an effort to control fixed costs, which had ballooned to $1,000 a day before the rains came.

Tight margins had been a concern when Robinson first appeared in a Business Make-Over a year ago.

“All I need to have happen is a hiccup,” she said in a September 1997 article in the Business section. Before she had a chance to implement the make-over recommendations, El Nino hit.

The effect turned out to be “a major earthquake” for the company, Robinson said recently. By the time Robinson had drained half of her $100,000 business credit line late last year, she was considering closing the doors.

Indirectly, the make-over consultant who had met with Robinson at The Times’ request played a role in saving her company. The consultant, UCLA business professor Alan Carsrud, had asked Robinson and another small-business owner to speak to his entrepreneur class in January. The other entrepreneur would talk about his successes. Robinson’s company was to be an example of a business in distress.

After class, the successful entrepreneur took Robinson aside and told her, “Payroll overhead was what was killing me,” said Robinson, who had seven employees at the time, including an office staff of four and one worker to wash the rental planes.

“He said, ‘Let them go, just let them go. Don’t think about it. They are not your friends. You are a business person first and foremost. Make that decision, then act on it,’ ” she said.

Within two weeks, she had cut the office staff in half and fired the maintenance worker. Soon after, one of the two office workers quit because of the workload.

Monthly fixed expenses sank from $30,000 to just under $20,000, thanks to a much smaller payroll and efficiencies Robinson found once she got hands-on with her bills and records. The company has almost paid back the line of credit and now has a $30,000 to $40,000 cushion in its checking account, Robinson said.

“I found out that day at UCLA that my priorities were wrong,” Robinson said. In her desire to “provide good income to employees” and create jobs, her approach to making decisions had gradually skewed from her core reason for being in business: her customers. It didn’t help that she was uncomfortable challenging requests for raises and had been reluctant to insist that her employees, many who had been there for years, maintain their productivity.

Now that her cash flow has improved, Robinson is finalizing plans long in the works to move into a new facility she is building at the Long Beach Airport with the help of a Small Business Administration loan. She expects to be in the 4,000-square-foot building by spring. The new location should mean an increase in walk-in business, boosting aircraft rentals and retail sales of pilot supplies, she said.

Robinson, who said she has been working at a pace she hasn’t kept since the first years of her business, added a part-time office worker recently and hopes to hire more clerical help once the company moves. That may give her time to dust off the original recommendations made as part of her Business Make-Over.

“I got three or four dozen calls from people who wanted to work with me” right after the article came out, Robinson said.

She met with lots of people interested in mentoring her, but most of that interest eventually fizzled out, she said. She had meetings with accountants interested in helping her implement a recommendation to create cash-flow projections and speed up the flow of information in the company. One installed an accounting system for her last spring, but she hasn’t had time to tackle the huge job of entering the company’s data. Since the layoffs, there has been no one else to do it.

Robinson had a marketing class from Webster University in Irvine come out to look over the company’s plans. A quantitative analysis class from Pepperdine University made a number of suggestions to boost sales.

Robinson’s biggest effort in the past year, though, has simply been to keep her company aloft. The layoffs were a drastic way to cut her stubbornly high overhead, but they eased the company’s tight margins.

“Now I am not operating so close to the bottom of the checkbook all the time,” Robinson said.

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Make-Over Review

Company name: Long Beach Flying Club & Flight Academy

Headquarters: Long Beach

Owner: Candy Robinson

Number of employees:

1997: 7 Now: 5

Revenue: In 1997: $823,000; $572,000 year-to-date 1998

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Main business problem:

With sales approaching $1 million a year but unable to stabilize profit, the 17-year-old company needed help figuring out how to capture a bigger share of the flight training market, improve cash flow and purchase a new building before its lease ran out.

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A year later:

“I learned that my priorities were wrong and that was affecting the way I was approaching business decisions,” Robinson said. When a severe cash crunch almost shut down the company last winter, Robinson realized that the overriding purpose of a business is not to provide jobs for employees but to serve customers.

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