Business management

Stange & Co: investing in people for the future

Dan McLennan shares the lessons he’s learned from running a fourth-generation family business.

A fourth generation business that keeps on growing

Like many UK family businesses, Stange & Co has adapted to meet changing consumer behaviour. What started in Llandudno as a fruit and flowers store around the turn of the century has been a tobacconist, a hairdresser, and a greengrocer.

In the late 1970s, Dan’s grandfather Bill Rowlands spotted the business potential of pubs and opened The Cottage Loaf in Llandudno. Stange & Co now has 10 pubs in its portfolio and Dan has headed the group since 2010 alongside Bill’s granddaughter, Zoe McLennan.

Here, Dan shares his insight on how the business balances growth with family values.

Financial stability supports growth

My great grandfather started the greengrocer business in between the two World Wars. He was looking for some stability and security for his family during that time. The 1970s brought different changes – supermarkets came along, which challenged independent food retailers on the high street – so the business pivoted to pubs. There have been several big changes since, such as adapting to the smoking ban in enclosed public places and the way people socialise. Food is a big driver now.

Invest in change management for relevance

We’ve adapted the pubs to keep up with the way peoples’ lifestyles have changed. Around 90% of our trade came from drinks 15 years ago so it was quite a leap to decide we’re not going to show Sky Sports anymore, or not encourage anything that keeps people drinking late into the night.

We employed more chefs and invested in the kitchens to become more family friendly. We committed to go in a totally new direction even though we didn't necessarily have the experience at the time. It was quite a bold step and a significant change – the outcomes were unknown, but we were lucky to have a freehold and be able to cope with a few quieter months.

A long-term business strategy could help drive innovation

We balance protecting our heritage with innovating for growth by taking a longer-term view. We ensure our plans are flexible enough that we can look at new opportunities but ensure our growth plans are careful and considered. We won’t go for aggressive growth for growth’s sake. If the right pubs for us don't come along, that's fine. It’s also about being flexible enough to look at opportunities that maybe aren't in your comfort zone.

Build next generation leadership from within

My boys are aged four and six so it's a little early for me to be thinking about succession! However, as we've grown from around 80 staff to nearly 400, we’ve established new levels of middle management and created a clear path for development and training. I’d like to think my boys might carry Stange & Co on as a family business but I’m not going to force them, just as I wasn't forced.

Coming out the other side of Covid

We bought Ring O’Bells pre-Covid because we thought it could be a wonderful Stange & Co pub. We closed it immediately after purchase with a view to doing a quick refurbishment. But Covid hit just a matter of months later and it was mothballed for three years. We took a battering financially during Covid and recruitment in the hospitality sector since then has been a big challenge. The Ring O’Bells has only felt like a viable option within the last 12 months. We think it’s got the potential to be our biggest and busiest site, it’s very exciting.

Prioritising recruitment and retention amid skills shortages

We like to promote from within, so deputies might become managers or sous chefs become head chefs. But that progression leaves holes in other sites that we must then fill and the idea of trying to fill multiple holes around the company didn't feel like an option in the last two to three years. Recruitment and retention have really been an issue. Retaining folk is something we've put huge effort into. That's not just giving them more money it's looking after them, making sure they feel valued and can see the possibilities of a lifetime career if they want it.

Building for the future means strengthening culture

Our staff are an extension of the family and know we are in it for the long-term. We’re not a short-term business that wants to build and sell quickly. The family business skipped a generation and went straight from my grandfather to myself, and the business was probably struggling a little bit financially when I took it on. There was very little expectation other than if you can keep it going then great! That gave me the opportunity to take some bold decisions and the key then is to make sure everyone in the business knows where they stand. Communication is key. 

Growth is something to feel proud of

I take pride from having grown the business in terms of sales, size, and profitability. But also, from building a culture that was quite a disparate group of pubs before that didn't really talk to each other. I’d like to think people are genuinely proud to work for Stange & Co and be happy to tell friends and family that's who they work for.

Why cash is king

What you come to realise running any business, whatever the balance sheet says, is that cash is king. Cash and cash generation. Sometimes you can get a little bit lost in numbers. But, what is in the bank and what is going to be in the bank next week and next year is far more important than what the P&L says. Knowing where you are today, and what your business is likely to generate in terms of cash in 12 months.

The refurbishment of the Ring O’Bells was a quite significant spend, the redevelopment was about £1.5m, and that’s where the belief in our long-term strategy has been helpful. We didn’t have pressure to get it open whatever the cost.

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