Iaccarino & Son was started by an Italian immigrant named Raffaele Iaccarino after settling in Worcester, Massachusetts. The company started off by doing wood working jobs. Eventually, Ralph expanded into making refrigerator cases. The company was eventually taken over by Ralph’s sons Carl and Joseph who expanded the company yet again. Eventually, sole ownership went to Carl. Carl named the company Iaccarino & Son. Carl ran the company successfully during two recessions. In 1992 Carl’s son Fran had joined his father at the family business.
The business was doing well with up to $10 million in sales by the end of the decade. The company fell on hard times after feeling the delayed affects three years after the 2008 recession began. Even though the company had boasted the $15 million in sales in 2011 the company filed Chapter 7 bankruptcy in 2012.
Fran had to factor what would be the best fit for him and his family. The family bond and continuing the legacy of the company that his grandfather had founded are big are very attractive incentives.
In closing his frame shop Fran knew that he was going into business and position like his frame shop. Going into a business that is like one that you have owned is attractive because it is familiar.
A disadvantage is Fran selling his business and losing operational control. Another drawback from joining a family owned business is the family dynamics. Who does what? Who answers to whom? Who can make important operational decisions.
Another thing to consider is how well will his presence be accepted by the long-time employees; most will think nepotism. Family conflict is a huge reason why companies suffer in family owned businesses.
At some point in a family owned business the time comes when you must decide to if you pass the business onto others in the family. This decision cannot be taken lightly. Not only is this a business decision it is often a person and an emotional decision to make. Which is this case for Carl. Iaccarino & Son was started by his father hard work and determination. Likewise, Carl had spent his adult life building the company up and making it successful. It is never easy for person to step back from their position of leadership. Carl was reluctant to say that he took the business as far as he could. Carl was uncertain of the change that Fran was wanting to implement. Carl, quite simply, was comfortable and was afraid of change that he did not fully understand.
The recession in 2008 happened it had devastating impact on Iaccarino & Son that was truly felt three years after the recession. The company should have started planning for the years to come as soon the signs of recession effected the economy. They should have cut cost buy reducing staff or by slowing or stopping expansion projects. The company could have sold off assets to reduce their debt. The company had some bad contracts and canceled contracts that produced a lot of debt. The company could have diversified the type of work that it was doing by going into different markets; much like Raffaele did when he first started the company. The best piece of advice is not to be afraid of change. Scaling back a company during a recession is just as important as expanding during a good economy.
The idea that someone can start business literally nothing through hard work and perseverance is amazing. Iaccarino & Son had a long business life. By thinking outside of the box by moving from niche to other during changing market demands and economic recessions the business thrived. The support of family in family run business is paramount.
Raffaele Iaccarino the patriarch of the business was willing to change with the times. Raffaele saw the need for being flexible to stay in business and to grow the business. Raffaele’s sons Carl and Joseph saw the need to do the same by narrowing the focus of the business to a certain part of the industry.
It is interesting that Carl was not as open to changes suggested by his son Fran until an outside consultant gave the same advice. The changes implemented there improved the quality and the efficiency of the company. If Fran had responded quickly and more appropriately to the 2008 recession hit, rather than waiting three years, the company could have still been in business. To every failure there is a lesson to be learned.