IN TOUCH : A flying start in business

Mike McDonald is good at spotting opportunities. It’s an ability that’s helped take the company he co-founded from backyard business to leading player in New Zealand’s aviation ground service equipment market in just six years. And it’s undoubtedly contributed to his recognition in this year’s Ernst &Young’s Entrepreneur of the Year Awards as winner in the “young entrepreneur” category.
At 28, McDonald has already clocked up heap of work experience. After leaving school early to do four-year apprenticeship in aircraft engineering with Ansett he held roles with Air New Zealand and its joint venture partner Pratt Whitney in New Zealand and the United States before returning to his home territory of Canterbury in 2000. He and his father then decided to go into business for themselves – and Mactec Engineering was born.
“We borrowed money to buy our first welder and just set it up as backyard operation to earn bit of extra income. Then we saw the opportunity to make bit more money and maybe have couple of staff. We thought we could start building airline equipment because that was what we were both involved in – I guess you just keep seeing opportunities,” explains McDonald.
By 2003, the business had turnover of $500,000; by 2005 that had grown to $5.5 million. Last year Mactec Aerospace hit the $9 million mark and opened second manufacturing plant in Indonesia. It now has sales outlets there and in Sydney exporting to civil and military aviation customers as far afield as Bahrain and Bangladesh.
The focus has been on innovative and ergonomic solutions and although there’s been “lot of trial and error”, says McDonald, Mactec Aerospace has gained reputation as one of the most innovative manufacturers in the sector.
“There’s always been more cash going to R&D than has been coming in the door. We started even without computer – now we’re the only company in this part of the world that can supply complete airport startup with the gear we build.”
There have been few hurdles. Until late last year when some financial partners came on board, all this growth was funded from cashflow. Plus there’s always been tendency to get so caught up in the day-to-day aspects of the business that things like streamlining processes or taking more strategic approach to business direction get neglected, says McDonald.
“You think you’re doing okay but you’re not doing the best you can and don’t realise that until you get good advice. The trick is to surround yourself with people who do know and then not be afraid of letting parts of the business go.”
So what does he think are the essential characteristics of an entrepreneur?
“The ability to look outside the square and take calculated risk – or in our case sometimes uncalculated ones. Then it’s just gut determination. We were brought up on the value of not giving up when things get hard. So we just kept on trucking.
“You’ve got responsibility to people and to creditors – so you really have to make it work. Though it’s bit surprising to stand back and see how far the business has come.”
McDonald reckons he could work for someone else now only if they gave him ‘loose rein’ to try new ways of doing things.
“When there are opportunities to save money and people don’t listen, it’s easier to go off and do your own thing. I don’t like being restrained. There’s too much opportunity out there to make money.”