“Hire the best. Pay them fairly. Communicate frequently. Provide challenges and rewards. Believe in them. Get out of their way and they'll knock your socks off.”
-- Mary Ann Allison,
American scholar and futurist
By "optimizing," I’m talking about the decisions you make as an FBO owner or manager that can have a positive effect on your physical operations as well as your bottom line.
Often, when FBOs, and other businesses for that matter, are faced with an economic downturn, one of the first places they look to make cuts is their payroll. That might work if you are operating a clothing or grocery store, but take a moment and think about the time that has been invested in training your employees, especially the ones who are out there on what I call The Front Line, marshalling, fueling, and, most importantly, meeting and greeting customers.
These are the employees who have built a relationship with your customers. There is a certain amount of trust and comfort that a flight crew feels when someone familiar is handling the company’s most prized possession, the corporate jet. And if you are looking to increase your fuel sales at the point of transaction, who is in a better position to positively influence the sale: you or the line service technician or CSR?
If we are relying on them to be our front line sales force, why do we, as a group, pay them the least? In retrospect, we should be thinking about paying them more, not cutting back their hours, pay grade or even laying them off.
Ouch! We know this sounds counterintuitive, but let’s step back and look at your business.
Analyze Your Business
For the past several years, we have all seen the significant reductions in fuel sales, lower operations and the serious advent of contract fuel suppliers. These events, much out of our control, have reduced operations, margins and the number of hangar and based tenants. As good managers, we have been trained to analyze our business models, reduced expenses, cut capital improvements and prudently operate our business to maximize revenues and minimize our expenses.
From personal experience, I have seen owners of top-rated FBOs out on their ramps parking airplanes; owners doing what they need to do to continue in business. Yes, fuel sales have dropped on the average of 25 percent to more than 50 percent and more in some cases. No doubt some FBOs will not survive this downturn. So what can we do?
Invest in Your Employees
The key ingredient to your service business is to give the best service. This is not rocket science! We should invest in our employees; not only with a reasonable living wage and benefits, but also to provide a good foundation, training and support to be successful.
When you invest in people, they respond and perform well. In the book Profit at the Bottom of the Ladder, author Jody Heymann presents a “well documented lineup of businesses that have flourished in large part because their management practices include respecting and empowering their lowest paid workers.” For example, Jenkins Brick, a major U.S. brick manufacturer in Alabama, credits higher wages and profit-sharing with increased productivity and quality, as well as reduced turnover and fewer accidents.
Along with paying your front line team a livable wage, train them, and respect them. They will pay you and your business back by taking care of your customers. Ultimately, the customers will welcome the attention.
We know what you’re thinking: “This is a simplistic magic formula.” Of course not! It takes a constant balance of monitoring your business, your team and your customers. But the evidence is clear, pay your employees a living wage, train them, challenge them, and respect them.
And then get out of their way, for they just might knock your socks off!
Next blog post on Optimizing Your FBO, Part 2: Cross-Train and Outsource
John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series.