TLG Auto’s Marco Gerace on “Only The Strong Survive”
Air-cooled Porsches have always been a huge part of Marco Gerace’s life. His father founded TLG Auto in 1978, originally a small service shop with a single bay. With a fondness and deep knowledge of Porsches, his dad quickly specialized in working on the German marque. Eventually, TLG Auto morphed into a specialty business restoring vintage Porsches.
After a brief career in journalism, Marco joined the family business in 2003. Working alongside his father, Marco learned everything he could about Porsches and TLG Auto before taking over after his dad’s passing in 2016. As a second-generation business owner, Marco brings a unique insight into what it takes to keep a family business thriving.
In this episode of “Only The Strong Survive,” Marco shares his experiences in successfully running a small family business with host Dan Kahn. His lessons and knowledge are essential for leaders of brands of any size. Click on the icon above to watch the entire episode, and here are our top five takeaways:
Transitioning from the first generation to the second in a family business can be difficult.
You need to have difficult conversations while you can.
Family businesses sometimes need a push.
Finding the right size for your business is critical.
Finding the right employees who aren’t only there for money is just as important.
Passing the Torch is Hard
Marco learned the hard way that passing the torch from the first generation to the second of a family business can be extremely difficult. If both parties aren’t on the same page, it can cause a lot of conflict. That was definitely the case for Marco and his dad, until they figured out they both wanted the same thing. Open and honest communication about what they both wanted for the future would have greatly minimized that friction.
“What ended up happening was I was in my 20s and on the rise. He was in his 50s and 60s and on the decline. Not like in health, but eventually, yes. It was more that I wanted more of the business and he wanted less, but we didn’t know how to pass the torch,” said Marco. “There was no discussion of next steps. It was assumed I would take over, but we never got into discussing it. So as I was doing more in the shop, he felt less important and like he was being pushed out.”
Have Hard Discussions Sooner than Later
Marco’s father passed away way too early in his life. While both shared the same vision of the future after that initial conflict, there was no concrete plan. Marco was left to figure out a lot of the business on his own and do a lot of “on-the-job” learning. He learned that you need to have the difficult discussions about transitions in a family business sooner rather than later.
“The transition was never actually set up, so when he passed, it was sort of a rug pull for me. I was left scrambling to prop the business up and learn the things I hadn’t learned about the cars, the business and being an entrepreneur with no guidance,” said Marco. “That is kind of the nature of things, though. You just don’t know (when someone will pass away). It prompts you to have the hard talks sooner. If I learned anything from it, it is to have those really hard discussions much sooner in life than later.”
You Have to Push
Family businesses can get stuck in a proverbial rut, with the younger generation wanting to respect their elders. However, that can lead to a reduction in market share as times change, but founders stick to their traditional ways of doing business. Marco knew he had to push the company forward as social media and online platforms became more prevalent. Even though marketing and anything online wasn’t his dad’s “thing,” the eldest Gerace still respected the results and let Marco try new things.
“He didn’t understand it. My dad was a Luddite, but didn’t know what that was,” said Marco. “He didn’t understand how I did what I was doing or how the internet or networking worked, but he saw the results in the numbers.”
Find the Right Size for Your Business
Many entrepreneurs, including Marco, struggle with finding the right size for their business. While nonstop growth is always attractive, it can come with its own challenges and doesn’t always increase net profits. Overexpanding at the wrong time can also sink a business. The key is to find a size for your business that you are happy with and can maintain.
“This is something I think about and struggle with regularly. My business has been on the precipice of expansion or contraction for about a decade,” said Marco. “I have enough work that if I added three people, we could crush it, but do I really want that kind of business? Or do I want to contract the business a little bit, have a wait list and do the best work on the best cars? Maybe I make a little less money, but I still do okay and take care of my people. I have this choice to make, and what is the better long-term goal? I don’t know.”
And Find the Right People
With a high-end clientele and extremely pricey vehicles, Marco needs highly skilled mechanics and employees. While paying a premium could attract that workforce, there is a downside to that scenario. For his business to prosper, he doesn’t want people there just for the money, but who love what they do and have a long-term outlook.
“If you pay enough, you can have the best. The problem is that you want to attract people who want to work on the cars, have the knowledge and love of the Porsche product line, and aren’t just chasing the money. The people who are chasing the money will always chase the money,” said Marco. “Sometimes you can sit where you are at, do the best work you can do and then reap the dividends down the road. Don’t look at the short-term, but look at the big picture and the long-term. If you put into the business what you want to get out of it, everybody wins.”
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