by Max Marbut
Staff Writer
“We’re looking for the upside in the downturn in the economy and there are opportunities,” said Certified Business Analyst Cathy Hagan to begin Monday’s discussion forum at the Rotary Club of Jacksonville’s weekly meeting.
Hagan is area director at the Florida Small Business Development Center at the University of North Florida and was called on to moderate a panel of business managers selected from the club’s membership. The panelists represented three industries that have been greatly affected by the recession: construction, transportation and banking. Each offered insight and shared the things that are working to keep their businesses competitive in the current economic environment.
All three agreed on a couple of concepts, including how staying true to the basics of good business will help a company cope with the economy and the importance of a positive attitude from top to bottom in any organization.
Hagan said all businesses are facing challenges related to the decrease in consumer confidence that has slowed spending. That has led to reduced cash flow, increasing receivables and lack of access to capital since banks have had to become more conservative in their lending policies.
“The upside is the strong businesses will survive,” she added. “We encourage businesses to manage their cash and profit margins. Focus on your niche but look for ways to diversify your revenue stream. Most important is to not buy into negativity and pessimism. Maintain a positive attitude.”
Jay Fant, chairman and CEO of First Guaranty Bank, agreed.
“The banking industry is a reflection of the local economy,” he said then stated he has little confidence the government’s efforts to revive the economy will have the desired effect.
“One of the things most frustrating to me is the lack of attention on the part of the government in terms of the subprime loans. The government should never have been in that role. They spent 10 years plus putting people in houses they could not afford – it was abuse,” commented Fant, who also said, “The government can’t handle any large sum of money in a responsible fashion.”
Fant believes what will work to improve the economy is “positive interaction. If a borrower is late that’s better than us charging off the account. We’re standing behind our clients no matter what happens in the economy.”
Steve Bacalis, president of the Tom Nehl GMC Truck Company, said his industry has been feeling the effects of a sliding economy for the last two years.
“We’ve been pretty beat up,” he said.
Tom Nehl GMC has 150 employees in two dealerships in Jacksonville and Lake City. The 51-year-old business provides sales, service and parts to clients who operate fleets of trucks including Winn-Dixie and Grimes Logistics.
“As the economy goes, so goes trucking,” said Bacalis. “Shipping is down 20 percent and there are too many trucks chasing too little freight.”
He also said the dealership’s workforce has been reduced about 15 percent primarily due to attrition and how a business that operates a fleet of trucks is weathering the economy depends on what kind of customers the business serves.
“Winn-Dixie is doing very well because people are eating more at home these days,” he said, while institutional purveyors who sell food to restaurants are experiencing a decline in business and therefore transportation needs.
Bacalis added that he’s been selling trucks since 1973 and “By far this is the worst recession we’re weathered.”
He said the company has “gone back to good basic business strategies,” and realizing the market size is getting smaller, “We emphasize getting a bigger piece of the pie.”
Economic challenges create opportunities, said Robert Hays, president of the Capitol Region for Florida Rock Industries, a division of Vulcan Materials Company.
He described the current situation as “The longest, steepest economic downturn since World War II,” but that doesn’t mean there aren’t opportunities for business.
“The cost of asphalt rose dramatically so we’re able to sell concrete paving as an alternative. Now the cost is competitive compared to asphalt and concrete has a longer life and costs less to maintain. We’re re-educating our sales force,” said Hays.
Bacalis said that even with the severity of the economic downturn, he’s confident Jacksonville is well-positioned to rebound based on the city’s proximity to the port and the existing land-based shipping infrastructure.
“We’ll have a robust future after a couple of challenging years,” he concluded.
356-2466