Since then, Van’s Aircraft have designed a complete range of highly sought-after models from the original RV3 to the latest RV15 prototype.  Over 11,200 kits have been completed and are flying so far with thousands more under construction.

Today Van’s Aircraft employ about 150 people. 

During COVID the business experienced a surge of orders from people who decided to take advantage of having to work from home to build their own aircraft. 

To cope with the high demand Van’s Aircraft hired and trained more staff.  At the same time the cost of shipping kits to customers increased by more than five-fold. 

Adding the effects of rising inflation, in the words of the founder “without realizing it, we were selling kits below our cost.”

Falling behind on the delivery of kits, the company decided to increase its output by outsourcing some of the manufactured parts, using a different process to speed up production.  This further increased the cost of the parts outsourced. 

On receipt of the outsourced parts, customers started to notice cracks appearing during assembly.  After investigation Van’s Aircraft agreed to replace and ship free of charge many of the parts already supplied.  This doubled the company’s inventory and affected around 1800 customers. 

Van’s Aircraft acquired an enviable reputation in the market and has been the most successful supplier of aircraft kits for many years.  However, since COVID the company has struggled to cope with a rapidly growing order book and supplier issues. 

It focussed on increasing production output and resolving unforeseen technical issues, while trying to keep customers satisfied. 

However, it seems to have lost sight of its costs and the effects of supplier issues on cash flow. A medium-sized company owned by its employees with no external source of finance, Van’s Aircraft seems to have been affected by some of the issues often encountered by fast growing SMEs: -

• Rapid increase in order book leading to substantial increase in staff costs.
• High business complexity stretching existing internal systems (many different aircraft types and variants, different forms of kits produced, increased inventory).
• Increase in the amount of business sub-contracted without adequate systems to manage and control suppliers.
• Focus on technical excellence and customer satisfaction without monitoring closely its impact on cash flow and profit margins, possibly due a false sense of security based on many years of successful trading and a great reputation.
• Lack of finances.

In his recent announcement, Richard VanGrunsven has been very open and upfront about his company’s serious cash difficulties.  Everyone hopes that measures will be put in place to allow the company to continue to operate and support thousands of RV aircraft flying and being built around the world. 

Like the CEOs of other successful SME experiencing rapid growth, I believe the leaders of Van’s Aircraft could have greatly benefited from the help of an independent third party to review the options, identify the best solutions and implement them.

Please send a message to herve@jardon.co.uk if you would like to have a conversation about how I help CEOs of SMEs to introduce the changes required to grow their business to the next level.