Learning the Lessons of Drought

After one of the busiest seasons on record in eastern Australia over the last 12 months, there are a range of initiatives astute aerial application companies are now pursuing.

Debt control is a key indicator of survivability of a company along with cash availability. Fortunately, the extended drought only claimed a few outright victims over an eight year period, buts its financial impacts were felt by everyone.

To rebuild an industry overnight is a big ask, but that is what farming clients expected once the rains started and the various plagues and crop diseases started to stack up. The challenge for aerial application was to respond safely while taking on as much work as possible to replenish sorely diminished reserves.

Finding pilots who had left the industry because of a lack of work, securing more aircraft (including importing both new and used) and identifying critical support staff such as operations managers and loader/mixers placed enormous stress on companies that only a few months previous had been contemplating another season without income.

A key challenge is how to ensure we always have the right number of people and aircraft to service our clients, without endangering the whole company with uncontrolled debt. Many companies have failed through poor control of significant growth which eventually outstrips the management capabilities of the business owners. The challenge now is to establish a growth rate that is manageable while keeping an eye on debt levels. It is easy to convince yourself that the new aircraft on the pad is sustainable with current work levels, but how about in a few years when we are back in drought?

Sound business planning may not be the most exciting agenda item, but it beats closing down your business every time. Establishing a sound charging structure is also important, ensuring that safety, reliability and quality are appropriately budgeted for and money actually spent on supporting these critical business outcomes. Some years ago an aviation conference was led through a comprehensive aircraft budgeting schedule, using agreed inputs from the audience. When the button was pushed on the calculation and a dollar figure per hour appeared there were howls of “we can’t charge that – we’ll go broke”. The irony was that they probably already were – they just didn’t know it!

Understanding your finances is a critical drought-proofing measure and one for which there is plenty of good advice available. There is also plenty of bad advice and the challenge is to ignore one and implement the other. That’s where self education can certainly help. Michael Gerber has written a number of books on business and a key mantra is to ‘work on your business, not just in your business’. With the return of resources into the industry, operators should be looking to invest in their own future by getting up to speed with good management and planning. In Gerber’s terms, the challenge is to grow from being a technician to manager and entrepreneur.

Equipment can play a significant role in increasing productivity. Modern application aircraft are incredibly efficient as well as safer and so investment can deliver a double bottom line result. Understanding when and what to invest in can make a big difference in the next drought – keeping in mind the need to juggle debt at a digestible level. All operators had plenty of time to think while pursuing the drought ‘lifestyle’ and they should now be considering how to implement all those good ideas they had – from the better mixing equipment to the ideal vehicle to more efficient work management systems – as well as acquiring new aircraft.

A critical component of drought survival is structuring a business to be flexible in the number of people employed. The agricultural sector is faced with awful decisions during drought – forcibly winding down to match deteriorating conditions. While ‘overheads’ – often people – simply have to be cut when there is no prospect of income during a drought, in a recovery, people bring capability and performance to the company. It is critical to ensure you have the right mix of skills, potential for growth and positive attitudes in the people you bring on board when rehiring. Have you ever written down the qualities of your model employee?

Operators now have a great chance to ensure that new starts commence on the right foot. Clear duty statements, sound induction and a systems approach to running the business may fix a lot of the problems you identified in the drought and during the recent scramble to rebuild. Managing people is the greatest challenge facing any business, but without good systems in place, the job just gets harder.

In considering the future of the industry, now is the time that operators can take decisive action to survive the next seasonal challenge that will undoubtedly come. Better planning and management, better systems and people, better equipment and aircraft are all going to make your business more resilient.

This is a great time to be in aerial application. Don’t be the one looking backwards and saying we should have done something to prepare for the next drought. The time to prepare is now.