James Canzoniero grew up and worked in Gamse Labels & Packaging, the family business, but wanted to go do something else and get away from it. Ultimately, he left his job to get an MBA, which he completed in 2008 … during the Great Recession.
“As things were falling apart in the rest of the world, the business had lost a major customer,” the now- President and CEO said at the Baltimore Smart Business Dealmakers Conference. “I was already on the board of the business and talked to my dad several days a week. So, it became a good opportunity to come in at a time when he was going to be more open to changes versus ‘Hey, everything's great, don't touch anything.’ And I didn't feel like I'd be able to add a lot of value if I came in at that time.”
The company got back on its feet through the financial crisis. And then, in 2018, his dad had a heart attack.
“So, it was, all of a sudden, guess what? Your mom is your new boss,” Canzoniero says. “So, that's an interesting kind of psychological bolt of lightning. But I have a very good relationship with my mom and was able to work out a deal to buy out her interest. And now it's just me, so it's not really a family business anymore. But it was for quite a long time.”
He says though he pushed hard for a succession structure, it didn’t come together. So, he says he had to make a decision: Would he just stay and deal with it? Or would he move on?
“And ultimately, I had the type of relationship with my father that I didn't think he was going to drop dead at 65, so, I wasn't that worried about it. And then the worst-case scenario happened,” he says. “But there's a ton of people in this world who've had far worse things happen to them and you just say, ‘Alright, this is where I am. What am I going to do? And you just start making decisions and work it out.”
It was fortunate, he says, that he was very close to his mom, who he says comes from very entrepreneurial family.
“Both of her parents had their own small businesses,” he says. “And she was also a CPA. So, it was a very different scenario than dealing with somebody who didn't understand business.”
Even though he bought her out, he says he still talks to her about the business. And she also happens to be the landlord because she owns the building, so he says she still has some interest in what's going on.
“She just doesn't want to hear every little thing that goes wrong,” he says. “She's heard it all before. And like we we're talking about with mistakes, you're going to make every mistake, probably. But just don't make the same mistake twice. Learn.”
When it comes to business advisers, he says he’s learned that context really matters. And for a family business to get the best results out of their lawyer and accountant, he says they have to understand the business.
“One thing we did that's been really good for us was that our lawyer, because of the conflict issue, he can't be on the board, but he attends all of our board meetings,” Canzoniero says. “He gets all the materials, everything. He just doesn't have a vote. So, when he's reviewing contracts, or dealing with anything, he's not just looking at it from this academic perspective. He understands the business context. He understands how important or not important this supplier or customer is. And I think that's really key to getting better results. And also, just being more efficient.”
He's also learned that while insurance may seems to some business owners like an excessive expense, and there are often attempts to cut it, he says in his business, because they have such high levels of fixed assets, insurance and their insurance agent have been extremely important.
“We've had a couple of really terrible incidents. And they don't happen frequently,” he says. “So, in the interim, you're always tempted to try to cut back. But then when that bad thing hits that becomes a huge multi month interruption, you're going to really regret if you cheaped out on insurance and don't have the right representation to make sure that your insurance company doesn't try to weasel out of it.”
