From the Front Lines of Family Business: Responding to the Coronavirus Crisis
March 26, 2020
Michael Fassler, one of our principal consultants recently shared this story of one client’s response to the Coronavirus Crisis. The company is a 37-year-old family business in the construction industry with approximately 60 employees. Like many of our clients, their CEO reports an unprecedented challenge:
Business activity (existing projects and new projects) is minimal to non-existent - only responding to emergency situations with regular customers.
We have had all of our employees go home with the understanding that everyone will be paid for a minimum of two months based on 40 hours per week. We assured them, "Take care of yourself and your families. If needed, we will call you in for projects if we believe your safety will not be in jeopardy."
I have been impressed with how the next generation (family and non-family) has stepped up with creative ideas and insights on how to manage through this unprecedented time. They have taken a lot of the pressure off of my shoulders. And, they have experienced bonding in a way they probably would not have absent the current situation.
I am optimistic that we will rebound. It will just take some time.
As a side note, the company has no debt, maintains a tremendous amount of working capital, and has a separate, dedicated emergency fund to pay all employees and company expenses for at least nine months without any income. The G1 owner's lifestyle would not be impacted if he never receives a dime out of the company due to personal financial planning and reserves. The strong financial situation provides tremendous freedom to make the above decisions.
Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.
The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact email@example.com.