The U.S. economy is strong now — but how do you prep for what the future will bring? That’s a question on the minds of many floral industry business owners and entrepreneurs, and it’s a question that Charlie Hall, Ph.D., professor and Ellison Chair at the Department of Horticultural Sciences at Texas A&M, will broach in September during SAF Amelia Island 2019, the Society of American Florists’ 135th annual convention.
“The most common mistake is that business owners in the industry let the media shape the strategic vision of their firm,” Hall said. “I always tell folks to pay attention to what experts are saying, but don’t just take their word for it. Some basic knowledge about key topics such as consumer confidence, the jobs report, interest rates, housing starts, trade, and immigration can go a long way in knowing what is really going on.”
Short of a crystal ball, SAF’s conventions are the best place to learn about and discuss economic trends that affect every industry segment. Hall will walk attendees through some of the leading economic indicators and how to examine sometimes conflicting information to make the most informed decisions possible.
As for a question Hall fields often— “When will the next recession take place?”— Hall said a better query might be, “What can I do now to get ready for the next downturn?” (A downturn that is inevitable at some point, as Hall pointed out.)
“Most businesses, in the floral supply chain that struggled or were forced out of the industry after the last recession, did so because they were over-leveraged and the bank had more skin in their business than they did, or because they were managing their working capital incorrectly,” Hall said. “They also were not conveying their value proposition to their customer base. Make sure your business is addressing these three areas and you will go a long way in recession-proofing your business.”
And, Hall added, even if you don’t have a doctorate in economics, you understand the economy more than you realize.
“In practicality, all of us are amateur economists in that we make decisions every day on how to allocate our hard-earned dollars when we spend,” Hall said. “In a sense, we are voting to keep those businesses alive — those we don’t shop at, not so much. The economy affects those decisions by influencing our thought processes about risk and uncertainty. Sometimes we are aware of those cognitive responses, but often they subconsciously influence our spending — so the ‘economic state’ of our minds at the time of purchases is critically important.”
Mary Westbrook is the editor in chief of Floral Management magazine.