Stable flight in business depends on the existence of sustaining financial resources. These resources are diverse and include revenues from the sale of goods or services, capital reserves from prior periods of profitability, bank financing, equity financing, or the sale of fixed assets. Unlimited financial resources will always result in survival. Because this is rarely the case, however, we must consider the situation in which financial resources are limited, and we must control the forces that will either relieve or increase pressure on those resources. The most obvious force is cost.

Management knows all too well that costs take on many forms. They include the cost of capital, the variable cost of material resources, labor, insurance, transportation, research and development, the depreciation cost of fixed assets, etc. Some of these may be influenced independently of the others, but in general they are linked. For example, one cannot reduce labor costs without affecting production, which influences revenue, which influences profitability, which increases the cost of capital, and so on. When the market turns south we can get squeezed from a number of different directions. The compelling question is what can we do to avoid going into a flat spin.

It is crucial to identify the important factors that affect flight, evaluate the range of control pressure any one of them can exert, and make the adjustments rapidly before the business aircraft control surfaces no longer can affect a meaningful change and the business goes into a flat spin. Often the correct measures are counter-intuitive. Just as in a spinning aircraft when the pilot often responds in a way that exacerbates the problem, the business manager can unknowingly miss the tactics that will result in the resumption of stable flight. We are talking tactics here.