There are some "dos" and "don'ts" to know if you decide to start a sideline.
The riskiest kind of business to begin is the one based on a technological innovation. The second-riskiest is the business built on a perceived consumer "need" rather than on perceived consumer "wants." The best advice that you could follow would be to avoid high-risk ventures.
Related to the high risk-avoidance caveat is, first, the need to avoid putting your home on the line and, secondly, the need to set definite limits, not to be trespassed under any circumstances, on the amount of your airline income you will commit to your own business. The reason is obvious: No one functions well under chronic financial stress, and raiding your airline flying income or mortgaging your home for operating capital can be the start of such stress. Your sideline then could become your main line, distracting you from your airline career and from the safe performance of your flying duties.
Another important caution: Do not go into a sideline business without considerable preparation for it. After all, you put a tremendous amount of your time, energy and money into becoming a good airline pilot. You prepared for the job of major airline pilot by getting a college degree, taking lots of aviation schooling, and building many hundreds of hours of flying time. You were able to become a successful major airline pilot because you had prepared well to do so. The same front loading is necessary before you commit financial resources and your ego and time to a sideline business.
- Know the fundamentals of running a business.
- Do not enter a business for which you lack sufficient financial resources.
- Once up and operating, don't let the business run out of cash. The business must be able to meet its obligations.
- Avoid having negative leverage applied to your business by those to whom the business owes money (e.g., a bank may apply heavy pressure for you to pay its note even ahead of paying for the absolute necessities - goods, services - of running the business).
- Do not make yourself too dependent on one or two clients. Be careful where you locate your business (are you in a place which, either demographically or distributionally, is a liability for you?).
- Because credibility is important, never compromise quality for price.
- For the same reason, make only those promises that you can keep.
- Do not stake too much on computers as a competitive edge.
- Make sure you know what the competition is doing; stay on top of this kind of "snooping" as long as you are in the business.
- Learn fast and keep learning.
- And know when to get out - e.g., if your business has succeeded beyond your ability to manage it or to devote sufficient time to it, sell it.
Among some of the pilots, the financial effects of furlough included the strain of giving up an elegant home for a less expensive one (even, in the case of those who re-enlisted, for military base housing); relocation to another area of the country where there was a job offer; renegotiation of previous divorce agreements; establishment of special agreements with creditors; and loss of self-esteem.
One pilot pointed out that lopping $10,000 to $30,000 from a senior pilot's salary would be uncomfortable but that such a loss from a junior pilot's salary is devastating since he has put little money into savings and is completely losing his salary.
The classic furlough consists of 10 percent of a company's most junior pilots; this industry track record enables a pilot to plot his place in an approaching furlough. The bottom 10 percent of the seniority list will be the top 10 percent of the furlough list. A furlough still is possible, however, for up to 25 percent of the bottom of the seniority list.
If an airline furloughs more than 25 percent of its pilot force, this deep cut can be an indication of financial instability, and all of the pilots should evaluate their company's financial status and prepare for the possibility of an operational shutdown.
Some pilots view airline furloughs with distaste and choose to fly only corporate aircraft to avoid such an occurrence. What they may not realize is that corporate pilots also get furloughed. Little is heard about corporate furloughs because of the small size of most company flight departments and the small number of pilots being let go. But if a company begins to see red ink in its ledgers, the first "luxury" to be eliminated may be the flight department. XYZ Ball Bearing Company's flight department is helpful, but is it essential to keeping XYZ in the ball bearing business?
Airline pilots, because of union contracts, usually have recall rights for as long as seven to 10 years after a furlough. Corporate pilots may not be so lucky since the company may not feel obligated to recall laid-off employees.
