Family businesses can get especially dicey when the brother who runs the business -- say Marchese and Sons Inc., a land surveyor in Roselle -- lays off staff.
"I laid off my daughter-in-law and my wife," says Paul N. Marchese, officially secretary, treasurer of the 43-year old business but the de facto CEO.
Contact information ( * required )
"My brother (Dominick J., technically president but a guy who prefers working in the field) and sister (Mary Steinbach, who functions as the business' CFO) and I took no paychecks."
Worse, it looked last year as though Marchese's hope of passing the business along to the third generation, his son Paul W. Marchese, never would happen.
But Paul N., who had been running the business since 1996, had an even bigger problem: He had no idea what the business' financial statements meant.
Fortunately, this story seems headed toward a happy ending. Here in Marchese's words are the details:
"Things got shaky in the beginning of 2011. We had finished an IDOT contract (and the business' pipeline was empty). Money became very scarce. There was no income. I had to use our bank line of credit to make payroll.
"When I went to the bank to renew the line, they pulled it. Stopped it cold. One of the co-signers (Marchese's mother, Edith) had died and the bank couldn't reissue the line. They started talking to me about P&L statements. I didn't understand.
"I don't think anyone in the family realized my lack of knowledge. For 16 years we had been making money. Never had a payroll issue. We always had money in the bank.
"I got a newsletter from Elgin Community College. I thought I might sign up for an accounting class. I was trying to understand my business, the way it looks to the bank. I saw information about the SBDC (Illinois Small Business Development Center, managed at ECC by Sybil Ege)."
Marchese swallowed his pride and connected with Ege. "I thought it would be a big embarrassment. I don't know what I'm doing. But Sybil was a breath of fresh air. Mary and I went there every two weeks.
"She tore me down to the basics and started me over. She gave me that spark I had had in the '70s. The energy she put back into us is amazing.
"Sybil told me that every good business had a business plan, so we did our first one in 41 years. We set priorities and goals. I redid job descriptions for everyone. We had never had defining roles."
Now, after six months with Ege and the Elgin SBDC, "I can look at the business' numbers, and they mean something. Our situation is back to normal.
"We're right on the cusp of growing again, and I've got a good handle on things. I won't be surprised."
• Jim Kendall welcomes comments at JKendall@121MarketingResources.com.
© 2012 121 Marketing Resources Inc.