Family-owned businesses “mean business” and they play an important role in driving our economy. Although family businesses tend to be highly successful, they face tough odds and circumstances for survival. Studies show that less than one-third of family businesses survive the transition from first generation to second, and less than 50% make it to the third generation.
Spencer ServiCenter is one of the few locally owned businesses in Antigua and Barbuda that has survived to the third generation. The business was founded in 1955 by Rouse Melvin Spencer, an entrepreneur who owned a fleet of buses. A gas station was a natural extension of his transportation business. With fewer than 300 vehicles on the island, Spencer’s primary motivation was to secure better wholesale pricing for fuel to create a leaner cost structure for his bus operation. Spencer, a father of 14, set up a Esso dealership and turned over management of the gas station to his children, while he focused on the maintenance side of the transportation business.
Spencer ServiCenter was featured as part of the Legacy of Black Entrepreneurship, an initiative coordinated by SamuelFields Consulting Group (SFCG) throughout the month of February. It highlights pioneers of business in Antigua and Barbuda, their contributions to community development and the secrets behind their legacy of success. Patrick Spencer, the Managing Director, was this week’s guest on the Likkle Byte Ideas Show. As the 10th of the 14 Spencer children, he shared fond memories of working in the family business with his siblings from childhood to adulthood. He chronicled the evolution of the transportation sector in Antigua and Barbuda and how it fueled the expansion of his family’s business.
“Spencer’s” became the first 24-hour service station on the island, to service the demands of the US Naval Base and the expansion of Spencer’s bus business. In 1975, as Esso was pulling its operations out of Antigua, seven of the Spencer siblings devised a succession plan to transition ownership of the business to the second generation.
Spencer ServiCenter has expanded as an all-around car-care station, offering a range of auto maintenance and repair services. The business has become a training ground for many mechanics, including some of the Spencer sons. Several third generation Spencers who are burgeoning mechanics have shown interest in expanding the auto repair aspect of the business. This enterprise is dedicated as much to the customer as the car, and the company is widely recognized for excellent customer service, which Patrick credits to its dedicated employees. The Spencer management team takes great pride in cultivating trust, familiarity and attentiveness to the needs of their employees.
After almost 70 years, one of the secrets of their business success is the community focus, with strong connections and long-term relationships with stakeholders still intact. Patrick noted his father’s generosity. “Sometimes customers or passengers could not afford to pay, he would tell them it’s okay. He would often turn around to give someone a ride, even though they were headed in the opposite direction. The patriarch also left a legacy of philanthropy by making donations to many churches and individuals who needed assistance,” he said.
The Spencer brand is also synonymous with high quality auto maintenance and repair services. They believe in “mastering what they know” rather than branching out to try newfangled operations. In this sense, the Spencers follow Warren Buffet’s renowned maxim: “Risk comes from not knowing what you are doing.”
SFCG CEO, Megan Samuel-Fields believes that family businesses are resilient because they are better equipped to confront and overcome difficult times through their commitment, motivation and sacrifice. They tend to have a more long-term perspective about the performance of their business and are willing to accept and adapt to challenging circumstances, both within the company and family spheres.
“The legacy of the Spencer provides many lessons for life and business. Successful families don’t just wing it. You must formalize a succession plan to take the business to the next level. While they may be conservative with their capital investments, they also have a healthy appetite for diversification and are apt to expand into new lines of business more organically, driven by the changing needs of their customers. Family businesses are often cautious, but have a clear purpose. They prioritize and protect the family wealth and the welfare of employees and customers, especially during periods of economic uncertainty,” said Megan Samuel-Fields. To listen to the episode, click on: https://www.youtube.com/live/1K24KowK_jU?feature=share
Many families struggle with the best ways to manage and transfer multigenerational wealth and SFCG will address this important issue at their upcoming virtual 1-day conference, Financial Wellness – TLC (Talk. Learn. Commit) on March 2, 2023. To register visit: http://bit.ly/3XU6wtU.
One session in particular “Tools for Managing Family Wealth: How to Transfer Assets to Ensure a Lasting Legacy” will address the dynamics of transferring the assets of a family business and the 5 C’s that must be carefully considered:
- Connection: What brought you here and how involved are the rest of your family in the business?
- Culture: Describe your family’s values and how your family believes business should be conducted. Your family’s values drive the business vision – whether this vision has been defined and documented yet or not.
- Control: How are the major decisions made that affect the family business? Which family members have a voice in these decisions, and who’s voice is the “loudest”?
- Capital: How has each family member’s “human” and “financial” capital been invested in the business? How are they compensated for their investment (e.g. salary, dividends or reinvested in support of business growth)?
- Careers: Are there non-family executives in the business? Is a career in the family business a birthright expectation, or an objective that must be earned elsewhere before returning to the fold?
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