Accounting for Turbulence By Brittney Falls
No one looks forward to taking a flight on a stormy day, as it can be worse than the scariest roller coaster ride. The aviation industry is literally experiencing turbulence as we weather the storm of Covid-19. Traveling on a flight that is experiencing turbulence can be scary and very unpredictable. As passengers, we know to immediately buckle our seatbelts while the pilots seek solutions such as changing the altitude or going around the storm. Businesses prefer a predictable environment as it is easier to make long-term decisions. Thus, abrupt changes in the marketplace are turbulent as it disrupts operations. These turbulent periods are unpredictable, and immediate actions are required to protect successful mid and long-term results.
There are warning signals to recognize. When business trends start to change, it is critical to recognize these warning signs as early as possible. Some early warning signs could be industry and macroeconomic trends. Once identified, you can take preventative measures, as pilots do, to avoid the storm.
GA Telesis took a proactive approach by acting and planning for the unknown to mitigate the most recent turbulence. Some organizations, for example, aggressively cut spending on salespeople and advertising to obtain short-term profit gains, but these gains may come at the expense of long-term revenue decreases. Similarly, payroll-cutting methods (lay-offs, reduced work hours) and increased usage of temporary workers may weaken employee loyalty and productivity. Instead, our first step was to look inside our organization to reduce costs other than payroll. SG&A is one of the first places to look to minimize redundancies during times of turbulence. SG&A includes nearly everything that is not included in the cost of goods sold (COGS). We took significant initiatives to identify and implement all cost-saving opportunities (not even the water coolers were safe!).
We understand that assisting our customers in times of need is critical to our success. Being proactive entails anticipating problems and developing solutions for our customers. For example, many businesses were in panic mode, revoking terms and requiring payment upfront. GA Telesis took the opposite approach with extended payment terms, offered payment plans and hardship discounts for our customers that were negatively impacted, and offered repair & hold agreements. Providing flexible solutions when dealing with financial challenges is how we separate GA Telesis from other MROs and has been a trusted driver for our customers.
All businesses face turbulence from time to time. Recognizing the warning signals early on and taking action to protect the business while serving the best interest of your customers and employees will help leave turbulence behind.