Rich boy makes good.

• Author: Perkins, David
• Position: Frank Kenan - Economic Almanac; includes related article on Kenan's philanthropy

So what do you do when the $3,000 your grandfather gave you to start a business is gone after a month? And then you find out it's worse than that - you're actually $50 in the hole?

If you're Frank Kenan, founder of Kenan Oil Co. and now one of the deans of North Carolina business, you think your way out of it.

In 1935, with help from his grandfather, a prominent Atlanta banker, Kenan had bought out a failing Pure Oil Co. commission agent in Durham. And he'd done well, he thought, that first month. With one truck and driver, he had delivered 25,000 gallons of gasoline to service stations.

But at 1.5 cents a gallon, his margin was slim, and at the end of the month, he received a letter from Chicago-based Pure Oil. He had not sold enough to earn the commission he'd taken: He owed them $50.

"I said, Hell, I'm not making any money this way,' " Kenan recalls. "So I drove to Hillsborough, where there was an independent distributor I knew. I asked him, What was the difference between a commission agent and a jobber like you?' And he said, About 3 cents a gallon.' That did it."

It wasn't quite that simple. A commission agent works for a single company; a jobber can work for anybody and charge a higher commission. But the risk is higher, too, because he has no guaranteed business.

Kenan took the risk, creating Kenan Oil Co. and becoming a jobber.

From this, he built a small, tightly run empire of petroleum-related businesses in central North Carolina. The companies are still growing and still in the family.

Kenan Oil delivers kerosene and gasoline to gas stations and heating oil to homes. Tops Petroleum Co. has built and runs 12 service stations under its own name and is building convenience stores under the Exxon and Texaco brands.

On his own, Kenan built dozens of Phillips Petroleum Co. service stations in the 1950s and 60s and got Phillips to finance several shopping centers. And Kenan Transport Co., which was No. 33 last year on BUSINESS NORTH CAROLINA's list of the state's top publicly held companies, is the largest bulk carrier of petroleum products and chemicals in the Southeast.

Kenan did it by the old rules - seizing risk at the right moment, negotiating the best terms and then managing conservatively for long-term growth.

"He's always told me, You make money when you buy something, not when you sell it,' " says Owen Gwyn, Kenan's stepson and president of Tops Petroleum. "The important thing is buying right."

By the mid-1960s, when Kenan inherited a fortune as an heir to the estate of his uncle, Florida railroad baron Henry Flagler, he'd already made one on his own.

But Kenan's concern has never been limited to the thickness of his pocketbook. A scion of one of North Carolina's oldest families (prominent Kenans date back to the Revolution), he has balanced entrepreneurial ambition with an equally strong sense of noblesse oblige. Call him a self-made aristocrat.

"If you want to make money, you can steal it from the bank," he says. "But the things I do, all of them have some benefit for the community. They create jobs, add to the tax base and leave something of beauty behind."

Now 77, Kenan is at work by 8:15 most mornings. And he's out to dinner many evenings doing business.

A few years ago, Kenan began to trim his sails. He turned over Kenan Oil and Tops Petroleum to two of his children. But he remains chairman and CEO of Kenan Transport, and he's busier than ever as a philanthropist and real-estate investor. He has recently taken over a stake in Landfall, a Wilmington country-club residential project. In Chapel Hill, he's a big investor in Europa Center office complex and two shopping centers, Brightleaf Square and University Square.

"I don't know what I'd do if I didn't work," he tells a visitor to his University Square office. "It's fun. I've always...