Industrial Protective Coatings’ second generation blends people and profits

Story by John R. Ingrisano

The term “family business” can have negative connotations.  Potential employees may have concerns about their long-term opportunities. At the same time, customers and suppliers may harbor doubts about the future of the company when the next generation steps up to take up the reins of management. If people had such misgivings about the changing of the guard at Industrial Protective Coatings in 2005, they were soon pleasantly surprised to learn that they were wrong.

Gerald, better known as Jerry, and his wife, Jean Brosteau, founded Industrial Protective Coatings in De Pere in 1980. Twenty-five years later, when they passed the company on to their daughter, Kelsie Czukas; their son, Gerald Brosteau (known as Toby); and Patrick Londo, a nonfamily employee, the outcome was a textbook example of transition planning at its smoothest.

Today, the three partners work shoulder-to-shoulder in an ego-free operation that generates nearly $3 million a year in revenue. Plus, founder Jerry is still involved just enough to offer advice and input when needed.

Add to this strong management mix a stable, dedicated workforce – as well as past employees who, with the blessing of the owners, have set up shops to become working partners with IPC – and loyal customers who are more like old friends, and Industrial Protective Coatings becomes a conservative, old-school business model that focuses on doing what it does best.

A small business success story

The Brosteaus started IPC in a 200-square foot area of their basement 31 years ago.  Providing flooring systems for the local cheese, pulp and paper industries, they quickly built the company into a $200,000-a-year business. 

Today, the company has 12 fulltime employees – along with between six and 12 part time workers, depending on need – and operates out of a 15,600-sq. ft. plant, generating nearly $3 million a year in sales. The company’s vast portfolio of customers past and present can be found across the country.

“We formulate, manufacture and install industrial floor coating systems in a number of industries, including canning, cheese and meat rendering,” explained Kelsie, who primarily manages the accounting and financial side of the business. “We do business in 49 states and Mexico.”

Industrial Protective Coatings fills an important market niche, said Toby Brosteau, president.

“The government regulates safety and health issues in food plants,” Toby said. “Regular concrete will harbor bacteria and mold that will affect food products. Our textured epoxy and urethane flooring systems improve cleanability and safety.”

The company primarily provides flooring in the beef and pork food industries, as well as for paper and pulp manufacturers.  Additionally, noted Toby, “we help provide durable, non-slip floor systems for light manufacturing and agriculture.”

An effective transition plan

By 2003, founder Jerry was ready to begin the transition to the next generation. His children Kelsie and Toby had been involved in every aspect of the business up to that point and, explained Kelsie, “We learned it from the bottom up.”

Another key member of the new ownership team was Pat Londo, who had worked with and for Jerry for years.

Still, research indicates that only 30 to 40 percent of small businesses actually make a successful transition to the second generation. Why has it worked well with Industrial Protective Coatings? 

One key to the success of the transition was that it was gradual. Kelsie, Toby and Pat were insiders, involved in the business for years. By 2003, said Kelsie, “Pat and Toby and I were increasingly included in more and more of the management operations. We were afforded the opportunity to give our two cents in making a lot of decisions. We got involved gradually.

“Our transition was unique,” she added. “We had Pat with his experience, while Toby and I were relatively green.”

Another factor that helped was that each of the three individuals brought different skills to the business: Toby’s primary strength is in marketing, Kelsie has an accounting background, while Pat is a chemist who leads and is hands-on with product development.

“This can never be a one-man show,” said Pat, who was involved with Jerry in other business dealings before coming on board Industrial Protective Coatings. “Jerry brought people on board to help the business grow.  Like Kelsie says, over a three or four year period, we got more involved in the management.”

Finally, Jerry didn’t just hand the new ownership team the keys to the front door of the business and walk away. While the official transfer of ownership was completed in 2005, he remains actively involved.

“(Jerry) is on the road at least three days a week, three weeks a month,” said Pat. “Jerry’s big role now is to service the customers. He enjoys that. He is good with the customers, many of whom have become close friends over the years.”

As for Jerry’s working relationship with the three current owners, “He is very aware of his role and does not interfere,” added Pat. “It’s a great relationship all around.”

Daughter Kelsie agreed.

“We still welcome any and all help we can get,” she said.  Of course, she admitted, “it can be tricky at times, and we occasionally need to have a few open and frank talks from time to time. Still, there is no friction.”

At the same time, the three owners do not live in rigid compartments when it comes to dividing up responsibilities and making decisions. Though they all have their separate titles and areas of expertise, there are no clear-cut lines of work demarcation, said Kelsie.

“With our individual areas of expertise, we tend to make joint decisions. All decisions overlap.”

A unique company in many ways

This family business thrives on the relationships with its customers and its employees. When asked about the best part of leading a family-owned business, Kelsie quickly points out that it is the “customers and personal relationships we have formed over the years. We can take away the big corporate image and make business more personal. Some of our customers are friends with my parents today.”

Pat agreed that the small-business mentality is a big plus. “We can be more direct to the customer in all that we do. They also know they can reach us at any time. A customer recently called on a Saturday, got one of us on a cell phone, and got the answer he needed.

“Also, what makes us unique is that we stand behind every step,” he added. “We do our own research and development. Plus, we manufacture and install, which is unique to the industry. We control all aspects of purchasing, manufacturing, and follow-through to make sure we are doing everything right for the customer.”

Toby sees this as a key advantage of the company.

“We consult with and get feedback from our installation crews, making them part of the product development process,” Toby said.

Another thing that makes IPC unique is that the company operates on a fairly flat management and decision- making model.

“You can go through any one of the people involved on a job and get an answer,” said Pat, from the front office to the installers. “Every decision brings in the people involved. There is no trying to please the guy above you. We’re all the same across the board.”

That is one reason IPC has survived today’s tough economic times fairly well. Another, said Kelsie, is “due to the conservative business approach we have taken. We have old-school money- management values. We have little or no debt. Plus, we commit profit to reinvest in the business. Our trucks and equipment are all well maintained. We have never relied on our line of credit.

“Plus, we have committed to maintain raises and benefits and perks throughout the recession to keep people on board,” Kelsie added.

Including unique employee relationships

Industrial Protective Coatings also has a unique relationship with employees. They hire through staffing agencies.

“We give profiles of the type of person we are looking for,” said Pat. “They then send up three or four applicants. We interview and decide and schedule them into our routines.”

This makes it possible for both the company and applicants to decide if that person would be a good fit with the company.

Also, added Pat, when it turns out that new employees do not work out, “we help them find new jobs.”

The company also works with installation crew members who want to go out on their own. Rather than treat them as competitors, Industrial Protective Coatings helps groom them as contractors.

“We are not afraid to take an employee and help him build his own company or enterprise,” said Kelsie. “We have helped some of our crew members transition into their own installation companies.

“We helped train them and offered them a learned trade,” she said “So when they want to go out on their own, we support them. In a sense, they become our customers.” 

Final thoughts

When it comes to making the transition between generations or simply a new management team, Kelsie recommended: “You need to learn every job at the company. That way, because when you need to make ownership level decisions, you must be able to see the whole picture. You must have hands-on experience in all positions.”

And that is how to make a family business prosper and keep growing into the second generation.

John Ingrisano is a Wisconsin-based business journalist, marketing strategist and public speaker. If you would like John to review your company’s needs or do a presentation for your business group, contact him at john@thefreestyleentrepreneur.com or call 920.559.3722.