Why you should think of your business like an airplane
A simple metaphor to understand how a business really works.
Use the Business Made Simple 6-part airplane framework to grow your small business.
Photo by @Chalabala via Twenty20
On any given day, a small business owner can wear multiple hats, whether it is getting the word out (marketing), winning new deals (sales), managing cashflow (finance) or people (leadership).
Different roles, and yet all vital to keep the business alive and thriving.
It’s no wonder then, running a business can feel overwhelming at times.
Add to this, in Australia, over 60 percent* of small businesses fail within the first three years according to the ABS.
Why is that? From our experience, most small business owners don’t have a clear framework in which to understand how a business really works. As a result, they become confused in how each part of the business works together to achieve long-term success.
But that doesn’t have to be you. The secret to growing a healthy, sustainable business is to: think of your business like an airplane.
The 6 important parts of a small business
Using the airplane metaphor and framework, there are six important parts to an airplane in understanding how to grow a business. Think of each part as a key operating system.
If you neglect one of these six parts, your business will miss out on potential revenue and growth. Even worse - the airplane could crash, and everyone onboard with it.
Business leaders who understand and manage each part of their business to work together in the right proportion experience healthy, sustainable growth and profits.
Let’s take a birds eye view of each part:
The cockpit.
The cockpit is your leadership team. Everything rises and falls on leadership.
Leaders deliver vision, create stability and manage talent so that the business runs successfully. When employees have a clear understanding of where the business is heading and their individual responsibilities, they can perform their work with excellence.
A leadership system should include:
A clear Mission Statement
A set of Guiding Principals
A Communication Framework
An Execution System
You wouldn’t board an airplane if the pilot didn’t know the destination, or worse - if there was enough fuel to fly. Similarly, when a leader fails to communicate a clear direction and sense of stability, it creates mental health and morale hazards within the company.
The wings.
Wings are your product. With every sale you get more and more lift. To maintain a high and safe ‘cruising altitude’, your products and services must be:
Strong - they are profitable
Light - they are in-demand
For a business to survive it must have one or more products that solve a customer’s problem, and in doing so generate a sizeable profit. It doesn’t matter if you sell a product for $10,000, if it costs you $9,999 to make and run it.
Create a list of your products/services and assess the following:
Profitability (rank from highest to lowest)
Demand (is there enough customers with a problem?)
Scaleability (is it sustainable with growth?)
Opportunity cost (how much energy is being taken up?)
The right engine.
The right engine is your marketing. Every business needs a marketing engine that works in order to provide thrust to the wings (your products) and create lift.
As it relates to your marketing message, clarity is your fuel efficiency. If customers do not understand what you do, they will not buy.
For your message to be compelling, it must speak directly to your customer. It’s not about you. Customers are only interested in your product because they believe you can solve their problem. And with the deluge of advertising, you only have seconds to get their attention.
Businesses that clarify their message win customers and succeed in the marketplace.
Your marketing engine should include:
A clear brand story (see StoryBrand)
A wireframed website that communicates your story
A clear Call To Action (eg. a Buy Now button)
A lead generator, with it’s own landing page
An email sales funnel to nurture and convert leads
The left engine.
The left engine is your sales team which also adds thrust to the airplane.
Marketing is good air cover for your sales team, that’s why most businesses start with marketing. Your sales team should work closely with marketing team to communicate a consistent message.
The role of a sales team is to convert customers from your marketing leads using a defined sales process. As your business grows, you may invest in an administrative structure to streamline efficiency and keep your sales reps focused on making calls and meeting with customers.
For your sales team to excel, they need:
A clear, step-by-step sales process
A system to qualify and track leads (such as a CRM)
Sales tools to create engagement (pdfs, videos, questionnaires)
A proposal software or template (for service-based businesses)
An administrative support system
The body.
The fuselage, a fancy word for an aircraft body, is your overhead and operations.
Airplanes are designed to take a little excess weight as possible. There’s a reason why you bang your head on the overhead compartment! You need a bit of frugality in business too.
If the airplane body is too big, it will not get off the ground. Reducing overhead is one of the tools a business owner can use to maintain profitability. It’s not the only tool, however, sometimes the problem lies elsewhere. Ensure you do a full audit of your airplane before cutting overhead.
Excess weight could include:
Unused, recurring or lapsing subscriptions
Excessive rent, office space
Underperforming staff (no return on investment)
The fuel tank.
Fuel is the cash. Run out of cash and the plane will crash.
Cash flow is the most important factor to watch in a business because without cash, the business cannot operate. It doesn’t matter how great your airplane is, if you run out of fuel, it’s going down.
It’s interesting when a CEO is criticised for “only caring about money”… This is the equivalent of a pilot being criticised for “only caring about fuel.” Lives have been lost because pilots ran out of fuel.
To manage cash flow, you need a system that allows you to:
Easily check fuel gauge and burn rate (revenue, expenses, profit)
Build an operating expenses buffer to pay wages, bills
Allocate funds to seperate tax and profit account
Extract profit to shareholders
Monitor Profit-Per-Employee (PPE) (divide profit by # of employees)
Businesses that have adequate cash reserves are able to weather storms and maintain altitude when things go wrong (eg. a global pandemic). Watch the gauge daily.
Implement proven systems and succeed
At Leader Guide, we use the airplane metaphor to help our clients understand how a business really works and make real-time ‘course corrections’ so that they fly further and faster.
*Business failure rate source: Australian Bureau of Statistics 2020.
The airplane metaphor and frameworks is from Business Made Simple
