Is the General Aviation Industry Finally on an Upswing?

Over the past three decades, there’s been a steady decline in the number of U.S. pilots. According to the Aircraft Owners and Pilots Association (AOPA), there were 827,000 active, certificated pilots in 1980. By 2011, that number had dropped to just 617,000. During that same 30-year period, production of single-engine planes dropped from 14,000 per year to fewer than 700.

But for the past three years, AOPA has made understanding this declining trend and reversing it a top priority. AOPA actions include developing a network of flying clubs, and speaking out in Washington to help keep the rising cost and complexity of aviation under control.

Thankfully, 2013 numbers are indicating a positive upswing, based on data from the General Aviation Manufacturers Association’s (GAMA) 2013 General Aviation Statistical Databook & 2014 Industry Outlook.

Here’s a look at what’s been causing the pilot and production decline, and good news from GAMA’s 2013/2014 aviation industry report.

What’s been causing the decline?

According to a Washington Post article posted February 9 titled, “Small aviation businesses say pilot shortage could drive industry into the ground,” there are a variety of factors that have contributed to the decline in pilots and production over the past decades, including rising fuel prices and heightened flying restrictions following the Sept. 11, 2001, attacks.

One reason is that the recent economic downturn has left fewer people with discretionary income. Others place much of the blame on federal regulators, whom they accuse of making it too difficult for pilots to obtain and renew their licenses, which in turn hurts small aviation businesses and the aviation industry as a whole.

Many commercial pilots come from the GA pilot pool, and the global airline industry will need almost a half million new commercial airline pilots over the next 20 years, according to the Boeing Pilot and Technical Market Outlook for 2013-2032.

Good news from GAMA’s 2013/2014 industry report

Here are some positive numbers from GAMA’s annual statistical databook.

Airplane shipments and billings – In 2013, airplane shipments increased by 4.3 percent to 2,256 airplane deliveries, and billings increased 24 percent to $23.4 billion across all airplane types. This is the second-highest industry billing number ever recorded-the industry’s peak billings occurred in 2008 at $24.8 billion.

Business jets – After slowing the past four years, the business jet market stabilized in 2013. There were 678 business jets delivered in 2013, up from 672 in 2012. Several new models and increasing demand helped stabilize the market and increase deliveries.

North American market share rose to 52.4 percent from 49.7 percent in 2012. Europe’s market share declined, however, from 20.8 percent in 2012 to 15.6 percent in 2013. Customer deliveries included 11.9 percent to customers in the Asia-Pacific region, 11.1 percent to Latin America, and 9.0 percent to the Middle East and Africa.

Turboprops – Turbo-propeller plane shipments also grew in 2013, increasing to 645 shipments from 584 shipments in 2012, a 10.4 percent increase. Shipments of agricultural turboprops, which GAMA began tracking in 2011, remained strong. Traditional single- and twin-engine turboprop shipments provided year-over-year increases in unit deliveries. North American customers took 57.1 percent of turboprop airplane deliveries in 2013, up from 48.6 percent in 2012. The Asia Pacific region took the second-largest market share at 14 percent, followed by Latin American at 13.2 percent. European customers took delivery of 10.5 percent, and the Middle East and Africa accounted for 5.3 percent.

Turbine helicopters – The turbine helicopter segment provided positive delivery performance in 2013 based on analysis of equivalent companies from 2012. GAMA identified 782 turbine helicopter shipments in 2013, which is an increase of 9.2 percent compared to the prior year for the same reporting companies. In this year’s databook, GAMA has expanded the available historical data about helicopter shipments with select information from 1999 through 2013.

Piston airplane and helicopter deliveries – Feedback from airplane and helicopter manufacturers indicates that global demand from flight schools is contributing to year-over-year growth. Piston airplane deliveries totaled 933 shipments in 2013, up from 908 shipments in 2012, a 2.8 percent increase. North America ordered 52.8 percent of piston engine airplanes, Europe 17.2 percent, followed by the Asia-Pacific region at 15.1 percent, Latin America at 10 percent, and the Middle East and Africa at 5 percent of shipments. In 2013, the general aviation industry delivered 335 piston-powered helicopters, which was a slight increase from the 328 units delivered in 2012.

Turbine operators – According to JETNET, LLC, the fractional fleet of turbine operators fell to 869 aircraft in 2013, decreasing each year since 2008, the year it peaked at 1,094 aircraft. There were 4,365 fractional owners in 2013, which is also down compared to five years ago, when there were 5,179 owners. The worldwide turbine airplane fleet included 33,861 airplanes in 2013 and an additional 19,509 turbine helicopters.

Pilot population falling – The active U.S. pilot population continues to fall. The private pilot population has declined since the early 1980s, when it peaked at 357,479 pilots, and in recent years has lost between 5,000 and 10,000 active pilots each year. There were only 180,214 private pilots at the end of 2013, and a total of 599,086 total active pilots in the U.S. in 2013. One bright spot: 40,621, or 6.78 percent, were female-the highest ratio of female aviators on record.

Signs safety is improving – A welcome decrease: The FAA’s preliminary data about general aviation safety shows there were approximately 216 fatal accidents during the year, a double-digit decline in the number of fatal general aviation accidents during 2013. While data is preliminary, the FAA’s goal of reducing the GA fatal accident rate to one fatal accident per 100,000 hours flown may be possible to achieve by 2018.

GAMA also includes GA safety data developed by the European Aviation Safety Agency (EASA) for 2006 through 2012. EASA statistics from 2012 also show a decline in the total number of accidents and the number of fatal accidents.

References:

http://www.aopa.org/Community-and-Events/Center-to-Advance-the-Pilot-Community

http://www.washingtonpost.com/business/on-small-business/small-aviation-businesses-say-pilot-shortage-could-drive-industry-into-the-ground/2014/02/08/2422cadc-8f5c-11e3-b46a-5a3d0d2130da_story.html

Video Production Business Tips – Surviving Economic Downturns and Thriving in the Upswings

When business is slow, people often blame it on “the economy.” When I was younger, I used to think this was a load of crap. How can “the economy” be directly responsible for why my clients aren’t hiring us for more video projects?

How can “the economy” be responsible for ME losing contract opportunities? Well, after years of fighting tooth and nail to have a successful video production business, I can tell you that even though I still don’t understand exactly how it works, the state of “the economy” definitely impacts my business.

In this article, I’ll attempt to give you a quick lesson on how, why, and what you can do to weather the storms.

I had an interesting conversation with a client about how the high price of oil impacts his business. He owns a multi-million dollar plastics manufacturing company (I mean MULTI-MILLION dollar business!)

This guy is big time and I’m doing everything I can to quickly learn how to replicate his success. The odds are good that I won’t reach that level with my video production business, but perhaps the collective efforts of all my business endeavors will resemble an inkling of what he has accomplished some day.

In a moment of ignorance, I asked him why the price of oil was making such a difference to his profit margins and he proceeded to instruct me in Business Economics 101. He mass produces products like medical waste trash bags, bags designed to keep frozen foods fresh for so many weeks/months, the liners of helium balloons, etc. which are made from plastic raw materials. These plastic raw materials are derived from oil.

Since oil is a lot more expensive these days, his raw materials cost a lot more which means that in order to maintain profit margins, he has to raise prices. Well, this isn’t fairing well because he has been successful due to his reputation of being the best quality at the lowest price.

Now that he is having to raise his prices, he is merely the best quality at an average price. Part of his frustration is that his competitors aren’t raising their prices to protect their margins. Instead, they are consciously losing money by keeping their prices the same.

So, as of right now, he can either join his competitors by not raising his prices and lose money or he can raise his prices to protect his profit margins but get less volume.

At this point in the conversation, I realized that I was running late for another meeting so we broke it off and I hauled tail out of there. Regardless of what he decides, I’m sure it will be a decision that continues to make him wealthier down the road. He didn’t get where he is by not understanding how to maneuver through good and bad economies.

So, how does the example I gave above regarding economic downturn impact us as videographers?

It’s pretty simple. Let’s say that this plastics manufacturer was a client of yours. If the high price of oil is leading him to raise prices which results in less sales volume, then it’s safe to assume that he will tighten up the purse strings when it comes to the “nice to have” services (videos, websites, breakfast in the middle of the Serengeti with 50 armed guards to keep the animals away… true story) and will only spend money on the “must have” services (raw materials, paper, pens, maintenance on his machines, etc.)

If he is a customer that does repeat business with you but hasn’t called in a while, this is most likely the reason. Or, if you submitted a proposal a few weeks/months ago and he hasn’t responded, this again could be the problem.

You have to keep in mind that when a business owner (or decision maker) is in survival mode, they aren’t thinking about anything else but how to get through this economic downturn. They know that if they can just get through the storm, great things will be on the other side when the economy bounces back.

As a service provider, YOU MUST RESPECT THIS! To not will result in extreme frustration for both you and the client/prospect. Plus, your client/prospect is giving you signs that the economic downturn is coming your way as well. If high oil prices impacts your clients’ profit, they won’t have extra money to spend on your services, which, you guessed it, means that you too will soon face a crisis.

So now that you’ve “seen on the news that the hurricane is coming,” what do you do?

You start boarding up your house and potentially think about leaving town.

I’m not suggesting you leave town but you should definitely start thinking about how you will weather the economic storm that will soon hit you like a ton of bricks.

What are your options?

My experience has been that when a client/prospect is facing a cash shortage due to an economic downturn, there isn’t any type of incentive that will result in them signing a video production contract.

They “freeze” their spending on anything that isn’t directly related to the operations of their business. So, you will feel like a hamster spinning the wheel without getting anywhere if you attempt to find a way to get your client/prospect to move forward with a project during this time. Embrace this fact and start collecting nuts… it’s going to be a long winter!

When your clients/prospects stop purchasing the “nice to haves” and only focus on the “must haves,” YOU MUST FOLLOW SUIT IMMEDIATELY! Put off the software upgrade or the expensive trip to the big industry conference you love to attend each year.

This is also the time to put off personal vacations and the kitchen renovation. If you don’t preserve your cash, you will be caught in the worst part of the storm without a lot of options for survival.

When the economy is bad, banks don’t like to lend money to people who actually need it and since you will be going to them because you are out of cash, they won’t consider you a good risk. It’s a messed up system but learning to embrace it will result in a healthier life and a more successful video production business.

It will be difficult to do this in the middle of a bad economy but a few ways you can help to off-set some of the impact include:

1. Focus your marketing efforts on industries that aren’t impacted as heavily when the economy is experiencing a downturn.

Some of these industries include health care (people are going to be sick no matter what the economy is doing), higher education (people go to college no matter what the economy is doing), local/state/federal government (the only entities that seem to not be impacted at all by the economy), and church ministries (the larger churches I work with seem to always have cash tucked away no matter what’s going on the business world).

These industries won’t necessarily thrive in a bad economy but they fare better than most which means you won’t be bone dry when the usual corporate clients close their checkbooks.

2. Find ways to improve your cash flow when the economy is good.

This is when banks will loan money or refinance loans for ANYONE! Use this to your advantage to reduce your monthly payments on equipment, vehicles, etc. And remember not to take on any unnecessary expenses that will either eat a large portion of your cash or will tie you in to monthly payments. You’ll need the cash when the economy gets bad and you won’t want extra monthly payments when your revenue drops.

3. Make hay while the sun is shining!

I know this is a cliche and one I’ve used in other articles, but, it’s true in this case as well. When the economy is great and people are buying things left and right, you MUST SELL LIKE THERE IS NO TOMORROW!

I’m serious. Spend all day marketing/selling and produce the videos at night or on weekends. Or, relax your client’s delivery expectations when possible so you can spend more time selling when everyone is buying.

4. Then, when you have a stack of cash and are trying to figure out how you want to spend it… REMEMBER… another storm will be coming soon!

Always has and always will. You can’t deny it. To do so will spell disaster for your video production business.

In conclusion, the economy is a force that is much stronger than you, me and even the largest businesses in the world. In order to make it through the downturns, you must do everything you can to prepare for them when the economy is strong.

Sell more, spend less and make smart financial decisions when it comes to refinancing your long-term and short-term loans. Eventually, the positive things you do in great economies will outrun the worst that bad economies can dish out. This is when your video production business gets stronger and you start to experience true wealth.

As for my client, his personal wealth is already far greater than the value of his multi-million dollar business. So, in reality, it doesn’t matter what happens during this particular economic downturn.

In the worst possible case, his business shuts down for a few months (with all employees continuing to receive paychecks) while he goes on a few lavish vacations. Then, when the economy bounces back, he turns the lights back on and they go back to being the best-quality/lowest price provider of plastics products that will continue to make him millions of dollars each year.

Wouldn’t we all like a piece of that action?

How to Sell Products Online

Working in the e-commerce business I’m always the person people come to for tech questions. Everything from hooking up their DVD player to installing software to reformatting their hard drive; but one question I’ve been getting a lot lately is people asking me how to make money on the internet; or more specifically, how to sell products online. The answer isn’t necessarily simple as you must consider everything from what products you’d like to sell online to SEO to accepting payments, but with a few easy steps hopefully I can help anyone trying to figure this process out.

1. Figure out what you want to sell. If you want to sell products online the first step is to figure out what you want to sell. Whether you make the products yourself, resell something, or use a drop shipper this is the first step. I’ve found the most successful way to sell products online is to find something that is not only unique but has a niche market. There are many people reselling items or using a drop shipper but if you have something unique or handmade to offer the world there is a better chance for you to sell those products online.

2. Figure out what method you’d like to use. There are many different ways to sell products online. Most people have heard of eBay or a similar auction site which is one way to sell products online; however they usually have extra fees and occasionally take a % of each sale. Another alternative is to sell products online is to create a website listing the products and take orders via e-mail or phone. I don’t generally recommend this method as there is a lot of trust on both the buyer and sellers part that the money and item will get shipped. The third option is to find a shopping cart provider. This is a company that has created software that allows you to enter your products to sell online, set-up a payment gateway, and handles all the security of the website; this is my preferred way to sell products online.

3. Find a provider. Finding an e-commerce solution to sell products online can be a tricky business, as there are many out there that have either terrible software or terrible support. The first step is to take a look at their website; does it look professional? If it doesn’t look well put together than chances are that will reflect on what your website will look like. If it does look professional see if it passes the next test; is there contact information? A business that doesn’t have easily attainable contact information is probably trying to run a scam. They want you to buy their product but not be held accountable when it doesn’t work; don’t fall for this. If there is contact information, call it! Get a feel for the people you will be working with as it’ll be your money on the line. If you don’t like their attitude or don’t like getting sent to a call center in India, then just end the conversation and move on to the next one. When you sell products online you have to make sure your provider is easy to work with and has a good product as the upkeep of your store is vital to its survival and to your profit.

4. Set-up a payment method. Now that you’re ready to sell products online you have to be ready to accept the money. Now most solutions will be able to work with a variety of payment options ranging from PayPal to money orders. Now with things like money orders you won’t need to set-up much. Just make that the only payment option and then ship the product when you receive the money order or check. If you’d like to keep everything digital and moving fast you can do so with PayPal or credit card processor. Both of these options can work and it will all depend on your store to figure out the best option for you but I generally tell all starting out stores to stick with PayPal as you won’t pay anything unless you make a transaction whereas most credit card options require monthly fees regardless of whether you sell anything or not. When looking for a payment option to sell products online the key is to make sure you compare rates. There are so many different ways for a processor to apply fees that you always need to know exactly what they are going to charge you and what they are charging you for.

5. Prepare to work for it. I know a lot of people who ask me how to sell products online think it is a quick way to make money. They assume they can just put some junk on the internet and someone out there will buy it. The truth is that just like everything else in live if you want to make money doing something you have to work for it. In order to sell products online you have to make sure your site gets traffic which means a lot of SEO (Search Engine Optimization); submitting it to directories, getting backlinks, posting meta-tags and anchor text for your products. This all takes time but if you have unique products to sell online and put the time in to make your website sparkle and shine there is no reason why you can’t succeed in an area where many have failed.

I hope this has been an informative article on how to sell products online and with any luck maybe you will be able to make some money out of the tips I’ve listed.

Keeping Your Video Production Business on Track Despite the Economic Situation

During the down times of the economy, you’ll find it difficult to get a loan from banks when you need it to fund your video production business. That’s because they believe that you won’t have enough resources to pay for the loan. That’s just how things work and unless you learn how to go with the flow, you won’t be productive on your video business.

It is challenging to have this mindset once you are experiencing the effects of a bad economy. However, here are some things you can do to alleviate its impact.

1. Target industries that are not influenced by the effects of the economy.

These industries may be health organizations (people are in constant need of medical attention), high-level education (education is always in demand), government (they never get affected by the economy), religious organizations (they always have funds).

It doesn’t mean that these industries become successful during a bad economic situation. However, they do better than any other industry which indicates that you won’t lose business when everyone else in the corporate world declines your projects.

2. Think about ways to get more money when everything is doing well.

It’s the time of the year when banks are ready to lend money to anyone who goes to them. This is the perfect time to decrease the money you spend every month on certain things. Remind yourself not to get additional expenses that will pull a bigger part of your savings. You will need to have cash reserves once the economy turns and you wouldn’t like to spend any more than what you usually do when your video production profit gets low.

3. Save when there’s a chance to.

People just have the inclination to buy a lot of things when things are doing well. During the times when people splurge at a shopping spree, you should seriously focus on selling. Do everything you can to sell and market during the day and produce that at night or when the weekend arrives. Get the chance to spend more time on your sales while everyone is busy spending their money on purchases.

4. When you’ve earned so much and would like to spend it on something, remember that business tragedy is inevitable.

It’s undeniable that problems with the business are something that happens to any entrepreneur. To ignore this fact will lead to unfortunate circumstances for your production company.

The economy is greater than you or any video production business out there. To keep up with it, you should be ready with what it can give you that’s why it’s important to work hard and earn while the economy is at its peak. Focus on selling and disregard spending. Make clever decisions about your finances. Soon, the good things you do during this height will conquer the negativity that the bad economy has brought.