|Company||Tundra Airborne Surveys|
|Industry:||Professional, Scientific and Technical Services|
|Amounts:||various Find what funding programs you qualify for|
Toronto's Ruth Palmer and John Charlton are piloting a small company into a unique niche in the airborne geophysical survey industry. With business plan funding, Palmer and Charlton are trying to pay off their aircraft.
Back in the late 1990s and the early part of the last decade, the airborne survey field was in a slump. Then Fugro, a major Dutch geophysical company, went on a buying spree and snapped up most of the large companies. Charlton lost his job as a geophysicist in the amalgamation fallout, and he did contract work for a while. Then he met Palmer, an experienced operator of the high-tech equipment used in the surveys, and they were able to get some work together. They soon decided they made a great team, and they began to seek out contracts as Tundra Airborne Surveys.
Mining and natural resource companies use the surveys to remotely sense the makeup of the ground below and provide what are essentially geological maps. Three different specialized technologies aboard the aircraft measure magnetic fields, gamma radiation, and low-frequency electro magnetics. Magnetic fields suggest what rocks make up the earth; gamma radiation identifies uranium deposits; and very low frequency electro magnetics help identify base metals and other materials. A survey plane flies low in a grid pattern, recording the information, which is collected and synchronized with a GPS.
When Charlton and Palmer launched Tundra in 2004, they were in an enviable competitive position. "Most of the companies that sold off to Fugro signed off on five-year non-compete clauses, so they weren't allowed to do any airborne survey work," says Charlton. "The industry had come back, things got busy again, metal prices went up, diamonds were good, so it was a good time to start. And we had limited competition." On top of that, they could offer a highly qualified, dedicated team – the two principals actually do the work.
Until now, Tundra had leased one aircraft. Ruth accompanies a hired pilot for the survey, sitting in front of the three computers on board, which gather the raw data Charlton uses to produce a detailed geophysical map for the client to analyze. But recently, they took a major step for a small firm. They bought the Diamond, a small four-seater plane equipped with twin diesel engines. And now they needed to outfit it for surveys.
It was time to put together a business plan. "This industry is always cyclical, with five-year highs and lows, and we're in a low now," says Charlton. "The aircraft is financed and we have two more years of payments, and we're in a Catch-22. We had a plane we needed to modify in order to get that work, but if we use retained earnings to modify it we might have trouble with the plane payments. So we need to find financing." They turned to the Centre for Business Plan Development for a professionally prepared plan. "Our plan writer was an excellent communicator," says Palmer. "Although he had no knowledge of our industry, the final plan was exactly what we wanted and hopefully what lenders will be looking for."
Tundra is exploring funding through the Business Development Bank of Canada, among other options, and they're optimistic about the future. Metal prices are starting to come back, and while there's pressure on survey prices with bigger companies taking contracts at cost or at a loss in order to keep cash flow – and their employees – Tundra has maintained very low overhead. They have no employees, and the Diamond delivers exceptional fuel economy, sipping a mere 40 litres of fuel an hour. "The King Air we used to lease burned 245 litres per hour," says Charlton. "It's a huge cost saving."
Ruth's advice for other entrepreneurs is to persevere. "Look for the competitive edge. We know this is a cyclical industry and things will pick up. We've come through the worst." "And don't spend all your money in the good years," adds Charlton. "Upgrade and maintain the equipment as new stuff comes along.
Imagine how a professionally prepared business plan could help grow your business. For a free consultation, call 1-855-892-2506.Please note our Centre is not affiliated to programs profiled in the above article and no claim is made that funding is due to our Centre unless stated.