My Biggest Mistake and How I Fixed It
The Company Castle Aviation is a 25-year-old charter air business that transports both packages and passengers, primarily business travelers. The Akron-based courier service operates eight aircraft and employs 19 people.
The Mistake I’ve always wanted to build a charter aircraft business. But I got caught up with growth and lost my balance with debt.
It all started after 13 years in business when I had several small planes, all worth about $125,000. One day, a salesman sold me on his ability to help me secure financing for my first $1.2 million Cessna Caravan. It changed everything. Once you start growing, it’s hard to stop.
My biggest mistake was allowing myself and my business to get into heavy debt. Until I bought my first $1 million plane, everything I owned cost less than that plane. In 1999, just two years after I bought my first large plane, I bought a second one. That was my best year ever in business. The big push then was just-in-time deliveries right onto auto assembly lines.
In 2000, I bought two more planes. But that was also around the time the freight world started changing. For starters, the auto industry announced a huge surplus of cars, so there was no need to move a lot of parts. But we picked up a major customer, Purolator Courier USA. And I bought another plane just to handle that line of business — moving small packages.
Markets change and businesses change, but one thing remains constant: Banks look at debt. It was getting to the point where I couldn’t get financing. And my credit lines were all disappearing because of all of this debt.
Two years ago I faced a terrible fact. My business was $8 million in debt and I personally had acquired more than $2 million in debt.
The Fix I got a wake-up call in 2007. I was talking to my preacher one day and I disclosed my debt problems. He was curious about how I was able to function during the day and how I was able to sleep at night. He told me the burden of debt is second only to the burden of sin.
I didn’t have a plan, but I knew I needed one. I had eight airplanes and too much debt. I was 54, and I set a goal to be debt-free by the time I reached 60.
The first thing I did was sell four of those Caravans to a leasing company. The planes never left my hangar. I just pay the leasing company instead. That move took $3.6 million off my books.
Next, I decided to sell my hangar at the Akron-Canton Airport. It wasn’t an easy decision. I owned the old BF Goodrich corporate hangar, probably one of the nicest ones out there. It also meant I had to get rid of a small secondary business I was running from that location, a full-service gas station for airplanes.
We moved to the Akron Fulton [International] Airport, where I now lease a space. That move shaved off another $2 million in debt. I was brought up to believe that it’s best to own. I used to be the proud owner of all these planes, but the problem was the bank held the paper, not me. Leasing is better for me. My company debt is now $1.8 million, and that includes a $1 million Caravan I still own.
I worry less now. I can remember times when I felt like my main function was taking calls from bill collectors. When you’re not dealing with phone calls from bill collectors, you can focus on sales and taking care of your customers. In some cases we got more business from existing customers as a result. We’re growing again, very slowly. It’s a great feeling to add more business without more overhead.