One vision + three children = two companies

By Barbara Spector

Ninth-grade dropout Victor Puente Sr. turned his ideas into two multimillion-dollar businesses. His children created their own niches and pushed the envelope beyond their father's dreams.

These are good times for Victor Puente Sr. of Fort Worth, Texas. Two separate businesses he started from scratch—an office-equipment sales and service company and a string of retail shops and cafés at the glittering Dallas/Fort Worth International Airport —now gross nearly $30 million a year and employ a total of 175 people. At 77, Puente has plenty of time to pursue his lifelong passion—physical fitness—and putter around his yard with his wife, Virginia, while their two sons, their daughter and their son-in-law run the two companies. All four families live in the same gated community, within a quarter-mile of each other.

But Puente, the son of Mexican immigrants, remembers when things were different—when he was growing up in a house without indoor plumbing, a ninth-grade dropout seeking his fortune in the rural county-seat town of Breckenridge, Texas, some 100 miles west of Fort Worth. Like many other self-made men, Puente owes much of his success to his visionary willingness to embrace change. But he owes it to something else as well: a rare readiness to delegate authority to his children at young ages. All three Puente siblings carved out their own very different niches in the family's businesses—positions that suited their individual personalities as well as the needs of the various enterprises. “They're smart, they have good work ethics and they all have people skills,” Victor says of his offspring. The Puente story demonstrates how high parents of modest means can rise if they know how to tap their children's potential.

Victor learned typewriter repair in vocational school, which he attended at the urging of a Sunday school teacher. This skill landed him a job at Underwood (later Olivetti) in Fort Worth, where he worked as a repair technician for more than 20 years. He spent his evenings and weekends doing repair work for other dealers out of his garage, cleaning and rebuilding typewriters and adding machines with the help of his small sons, Buddy (Victor Jr.) and Vince. “When I was eight or nine years old,” says Vince, now 49, “I would be paid 25 cents a keyboard for helping to clean the typewriters.”

But Victor understood that technical ability could take a person just so far. “Several people had told me I had good people skills,” he says. “And I knew that a lot of the other technicians were getting complaints about how abrupt they were.” His big break came in 1964, when John Harvison, a former Olivetti salesman who had struck it rich in oil, convinced Victor to start an office-equipment business in the Fort Worth suburb of Arlington and offered to be a silent partner. (They originally had two other partners, whom they bought out in 1968.) With the age of computers just around the corner, of course, the days of typewriters and adding machines were numbered. But Southwest Office Systems, the name ultimately adopted for the venture, eventually evolved into selling and servicing high-tech office machines.

Although both of Victor's sons had dropped out of college, Victor saw them as valuable (but very different) potential assets to the business. “Buddy was always the innovator, and he was good with figures,” their father says. “Vince was a natural salesman.”

Elder brother Buddy, who had worked at a McDonald's before joining SOS at age 20 in 1971, found his niche—finance and accounting—by chance. At first, his father sent him for equipment repair training and got him involved in sales. “He was shotgunning me into all kinds of things,” recalls Buddy, now 52.

Buddy remembers attending a two-week course on using an electronic calculator, at the time a brand-new, $4,000 device. Customers accustomed to electric adding machines weren't interested, Buddy says. “Here comes this 21-year-old kid trying to sell this electronic thing that didn't use paper. They didn't trust it.”

But Buddy continued to attend training courses. Victor believed it was important to take advantage of as many classes as possible—“anything that was free,” Buddy notes. After attending a class on Small Business Administration loans, Buddy took charge of the company's loan-application paperwork. “Anything the banker didn't know, I had to go back and ask the SBA guy,” Buddy recalls. “It was a self-teach thing.” He further refined his skills at an accounting class offered at a trade show, where he learned about profit-and-loss statements. He then used his knowledge to separate SOS's activities into departments (office supplies, office machines, service, etc.) in order to determine which were making or losing money. But he declined a fancy company title because he felt uncomfortable supervising the company's older employees. “The age thing always bothered me,” he recalls.

With Buddy firmly entrenched in the office-equipment company, younger brother Vince—who describes himself as “more boisterous and outspoken”—was at first reluctant to come aboard. “I didn't want to work under my brother's shadow,” he says. As a teenager, he found jobs in local stores instead. The summer before he turned 18, after losing a hardware store job, Vince stopped by the SOS office to use the company's phones for job-hunting. While he was there, his dad asked him to make a delivery.

“If I get paid,” Vince remembers replying glibly, “I'll make a delivery.”

Soon Vince was selling typewriter and calculator ribbons “like crazy,” he recalls, to customers on his delivery route. But he continued to think about finding work elsewhere to distinguish himself from his brother. One day the SOS sales manager, impressed by Vince's selling skills, asked him if he wanted to try his hand as a salesman. His training was “rudimentary,” Vince recalls. “They stuck a calculator under my arm and said, ‘Can you sell this?'” Vince read the manual, figured out how to use the machine and spent a day riding with another salesman to see how he did it. From then on, Vince was hooked on sales, even though his working conditions were hardly cushy. “I had only one suit—a corduroy suit,” he remembers, “and a car with no air conditioning.” The bottom line, he says, is that “When I started to sell, I found a place for myself.”

At the age of 25, Vince opened an SOS branch office in Fort Worth. “We had accounts over there, but we weren't making much penetration,” he recalls. “We kept hearing, ‘You're not a Fort Worth company.'” Vince solved that problem by finding a Fort Worth office that would lend him “literally a closet and a telephone and a desk” rent-free. Six months later, he says, SOS had enough Fort Worth business to justify renting its own office suite.

As SOS grew, though, Victor remained unquestionably in charge. But he took care to delegate authority to his sons—a lesson he says he learned by observing the fate of other family businesses. All too often, he says, “when the father passed away, the company would fold because the children had never made decisions.” As his sons' supervisor, “I had them make their own decisions—right or wrong,” Victor says. “They would sometimes make the wrong decisions, but I would back them.”

At Buddy's urging, for example, SOS began selling word-processing equipment before the market was ready for it. “We lost some money,” Victor says. But he says he views the incident as an inevitable misstep in the company's march toward modernization. “If we never had tried it,” Victor says philosophically, “it would have been a mistake.”

Yet Victor was hardly a pushover, his sons say. “My dad was a tough taskmaster,” says Buddy. “He didn't cut us any slack. If you were a family member, you were the lowest person on the totem pole.”

The turning point came in the late 1980s, when SOS was beginning to rake in good profits. The enterprise had grown larger and now required more attention in administrative areas like human resources and accounting—areas that Victor happily delegated to Buddy and Vince. “The back side of the business wasn't his strength,” Vince notes. “He understood it all; he just didn't enjoy it.”

At about the same time, Victor learned that Dallas/Fort Worth Airport was seeking local minorities to operate its concessions. He jumped at the chance to sink his teeth into something new.

“Some people say, ‘If it's working, leave it alone,'” Victor notes. “I say, ‘If it's working, you'd better start looking for something else, because something's going to change.'”

Buddy crunched the numbers and worked out a proposal to acquire the concessions; Vince did market research and created a presentation. Their proposal to operate three airport news and gift shops succeeded, and in 1989 a second family firm, called Puente Concessions, was under way.

But within the first year, the newsstands caused the Puentes' first family/business conflict. The distribution company, which stocked the shops' periodicals on consignment, insisted on delivering adult as well as general-interest magazines. Both Vince and Buddy, by now the parents of small children, felt the adult fare violated their personal ethics. “I don't want my kids or my wife to walk into any business I'm involved in and be embarrassed,” says Vince, whose son and daughter are now 25 and 23.

Vince recalls that his father came to his house to deliver his final decision on the magazines. Both father and son calmly stood their ground, Vince says.

“I decided I'm not going to fight that battle” with the distributor, Victor said.

Vince refused to go along with him. “Here's where I'm going to draw the line,” he replied. The upshot: Buddy and Vince gave their interest in the airport businesses to their father.

The controversy turned out to be a blessing in disguise. Victor's absorption in the airport concessions “was the turning point” for SOS that helped clarify his sons' roles, according to Vince. At that point, “To the employees, we became the ownership” of SOS, Vince says. In the 1990s, Buddy and Vince acquired the share held by Victor's silent partner, John Harvison; at about the same time, their father began transferring his shares to them. (Victor now owns 5% of SOS; Buddy and Vince own 95%.) The office-equipment business has blossomed under their leadership. In 1997, SOS moved to its current, 39,000-square-foot headquarters near the DFW airport.

The brothers' departure from Puente Concessions solved a knotty problem for their father: how to find a niche for the brothers' precocious kid sister, Gina. “I always wondered,” the patriarch recalls, “How am I going to get her in here, if the boys are really the ones who built this up?”

 

Gina, 14 years younger than Vince and 17 years younger than Buddy, grew up in a financially more secure environment. In the family, she held an enviable position—what Vince calls “my mom's precious little jewel.” Gina began entering beauty contests at 15 months; soon she was taking singing and dance lessons and appearing in TV commercials. She also began helping at SOS at age eight, cleaning up her father's desk and filing documents in chronological order. She eventually worked there in high school as a bookkeeper and receptionist. But the office-equipment business never appealed to her.

“I got total exposure to SOS,” Gina says, “but there was no passion that pulled me there.” She watched her father and brothers work at building relationships with prospective customers and concluded that “the process seemed to be too slow,” she says.

After high school, Gina majored in broadcast journalism at Texas Christian University and became the first of the three Puente siblings to earn a degree. But she soon became disillusioned with television's emphasis on beauty over brains, she says. “It seemed a bit superficial.”

As a college student, Gina worked in the airport businesses on weekends and in the summers. “I loved the environment and the fast pace,” she says. “Midway through my studies, I realized I wanted to be involved in some aspect of the [airport] business.”

After graduation in 1990—when Puente Concessions was completing its first year—Gina turned down a small-town TV news-anchor job to work in retail management at a Gap Kids/Baby Gap store in Dallas, where she learned about sales and inventory control.

Though Victor wanted his daughter to join him full-time at the airport, he thought it prudent to wait until Puente Concessions proved viable. “I remember the day he walked into the Gap and said, ‘I think we can afford to take you on,'” says Gina. “He offered me not a penny more than I was making at the Gap"—that is, less than $30,000.

At the airport, Gina started out behind a cash register, “learning how the operation worked from the ground up,” she says. That helped her establish rapport with other employees. “Here she was, a part-owner, and she was working the cash register,” Victor says.

Soon she became involved with the payroll and started accompanying her father to meetings of airport concessionaires—where, she recalls, “I was perceived as his secretary.” That perception soon faded as Gina got involved in contract negotiations with suppliers and, eventually, financing for new airport ventures. “My dad brought me into those meetings pretty quickly, instead of keeping me as a high-level manager,” Gina acknowledges.

Unlike Buddy and Vince, who as young novices felt uncomfortable supervising middle-aged employees, Gina by her mid-20s had already earned her stripes in retail management at the Gap. “The boys would kid with me, saying, ‘You started her out as a manager,'” says Victor, who was in his 60s when Gina came aboard. “But they accepted that [management] was Gina's area.”

Gina's older brothers say they understood that Gina's rise at Puente Concessions would differ from their experience at SOS because of their father's different circumstances—in terms of financial resources as well as age. “My dad worked her to death,” Vince notes. “I believe he brought her in to be the next president. That was a wise move on his part, but it wouldn't have made sense for me—my dad was at a different time in his life. It was just two different scenarios.”

Like her father, Gina kept an eye out for potential new ventures at the airport and elsewhere. With a personal loan from her father, she and other partners (whom she later bought out) created La Bodega Winery, which opened in 1995. The following year, through Victor's connections, the family started operating two Thomas Cook currency-exchange booths at the airport. Later that same year, the Puentes entered into a franchise agreement to open a Frullati Café and Bakery at the airport; in 2000, they added four more Frullati locations. During the 1997 holiday season, Gina experimented with another retail concept—operating three Calendar Club airport kiosks, which sold calendars to travelers. “I had my hands full,” Gina admits.

Eventually she paid a price. Though Gina was rising faster than her brothers had, she was sacrificing more of her time, too. “Her job calls for 16 hours a day, seven days a week,” Victor notes, “while SOS was a 45-hour job in the beginning.” (The office-equipment business formerly was open for a half-day on Saturdays but is now closed on the weekends.) Gina carried a pager at all times; employees whose shifts began at 5 a.m. would beep her at 3 to call out sick, and she'd head to the airport to cover for them.

The stress took a toll on Gina's health. During a 1994 meeting with the winery's architect, her back went out. When she realized that Victor suffered the same ailment in times of stress, she remembers thinking, “I'm really into this now.” Then in 1996, the year the cafés opened, she developed a skin irritation.

Despite the pressure, Gina kept up the pace. Her father would negotiate to acquire new businesses and then turn them over to her to run. “I had to keep tackling what my dad had got going,” she says. “And I was all for it. I wanted to please him, and for us to make the businesses grow together.”

What Gina needed was a dependable right-hand man, and she found him in 1995 when she met John Brancato, a friend of a friend newly arrived in Dallas who had developed sales delivery and warehousing systems for Frito-Lay, the potato-chip maker. Even before she met Brancato, Gina had established a policy of taking her dates along on business meetings and events sponsored by the local Hispanic Chamber of Commerce and other organizations. “I wanted to expose anyone I was dating to what I was doing so they knew what they were getting into,” she says. “I would drag dates up to the airport. I wasn't the homemaker type, and I wasn't going to do anything to hide it.”

On their second date, Gina took John to a restaurant meeting with Gina's prospective winery partners. “I felt funny asking him,” she says, “but I felt I might as well show him what he's dealing with.” That evening, John watched Gina sign the partnership agreement.

John remembers Gina telling him, “If you're going to spend a lot of time with me, you'll probably have to spend a lot of time at the airport.” But John, who traveled frequently for Frito-Lay, was already spending quite a bit of time at DFW. As his relationship with Gina blossomed, he began moonlighting at Puente Concessions. “I would come off a flight, put my bags in a closet and start helping her out,” he recalls—everything from washing floors to helping interpret balance sheets.

The couple got engaged in December 1996 and planned to marry in June 1998. Five months before the wedding—in January 1998—Gina officially hired John. She was “rolling the dice,” Gina acknowledges: “He had a lot of corporate experience, but very little entrepreneurial experience.”

For his part, John reasoned that he might as well jump into the business. “I was going to share in the good and the bad of what happened at the companies, whether I worked there or not,” he says. Romantic considerations aside, the bet paid off for both of them. “Had it not been for John, I would have had to hire two or three people,” Gina figures. Says John, who is now 46: “I didn't just pick up a wife. I also picked up a business partner. And I didn't just pick up a father-in-law; I also picked up a business partner and a friend.”

Of course it wasn't really that simple. As John developed into a key player in the airport businesses, Victor (who was still involved in contract negotiations) often butted heads with John over company strategy.

“He's more direct,” Victor says of his son-in-law. “I have a different way of negotiating—I like to let [the other party] think it's their idea.”

John acknowledges that his father-in-law preferred “doing things on a gut feeling,” while John was accustomed to analyzing figures before drawing a conclusion. In one case, John advocated increasing the management staff, arguing that additional managers would free the Puentes' time to focus on other duties, and sales would rise as a result. Victor, on the other hand, put little stock in John's sales analysis and balked at spending money to increase the head count. “We went back and forth on that for a while,” John says. Ultimately, he prevailed, but the experience took a toll on the family's energy.

Gina says she found herself in an uncomfortable spot when her father and husband disagreed. “It felt like I had my old boyfriend and my new boyfriend there at the same time,” she recalls. During these spats, she says she tried to disregard relationships with the two men: “I'd take whatever side I believed in.”

The conflicts never spilled over into family relations, John says. “Victor and Virginia took me in with open arms on the personal side,” he says. “On the business side, Victor was challenging at first—and rightly so.”

In 2000, after the family successfully negotiated to operate four more Frullati cafés (they already were running one), Victor decided to pull back from active involvement in the airport businesses. “I thought it best for Gina and John to make their own decisions,” Victor says. “I wanted their marriage to work.” Since Victor stepped aside, he and John have become more comfortable with each other, Gina says. “Their relationship got better, and I'm thankful for that.”

Gina, who's now 35, says she realizes that many family business patriarchs wait too long to cede power to their children. “I just feel so lucky,” Gina says. “For him to do this so unselfishly has been wonderful. We still pull him in for networking and relationship-building.”

Gina rents office and warehouse space in the SOS headquarters and says she regularly asks her brothers for advice. “And we give each other leads,” she notes.

“What my dad accomplished in his second life in business,” says Vince, “and what my little sister has accomplished, is amazing.” And the story isn't over. Gina and John recently launched Via Trofie, a venture that sells advertising on video screens located in the Puente newsstands. They're also planning to offer sunset wine-tasting cruises on their 45-foot boat.

“I think there would be a sense of boredom if we stopped here,” says John. “There's more out there for us to do.”

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Winter 2004

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