Lessons of Life | Dick Buxton

Episode Transcript of: Lessons of Life | Dick Buxton

Alan
Welcome back. I’m sitting here today with Dick Buxton. Vic has a prolific career playing a role in helping several 1000s or hundreds of 1000s of over 1000 companies with the succession planning with the Aesop’s and he’s also prolific writer and has done much throughout his career to establish a platform to help people in it looking at things that they can do for the company to to preserve wealth, and also to manage life in general. And I know that you’ve written a couple really good books to one is that now you built a successful business. Now what? So, Dick, welcome to today’s show. Good to be here. So let’s walk through your career. Can you can you give me some more background on on the career and how you started out in life?

Introduction to Mr. Dick Buxton, his bio is below.

Dick Buxton
Well, Alan, I started out in life with a father much like you, who cared about his kids. And he had five of who and I was the oldest. And his hobby when they wrote him up in the blue book of Long Beach was, other people had other top business leaders had golf, and skiing, he had family, he had no other sports. And he spent a lot of time with his family. And I, since I was the oldest, I benefited from his wisdom. And when he was in his, oh, gosh, early 30s, the company he built from nothing, high tech at that time, the neon sign business, and he was an early investor and an entrepreneur in that field. In Long Beach, California with 50 employees and the largest privately on neon sign company in Southern California. World War Two didn’t help at all in his business because you couldn’t turn on a neon sign. And his company went under, and it had a big impact on him and on our family. And he got a job from being a very rich man to be in a very poor man very quickly, at $1 and a half an hour as an electrician in Las Vegas working for a big defense contractor. And while he was there, made plans to again start another business, came back to Long Beach after the demo outs and run outs lifted. And then he formed a little company in our family room behind our home. And I started an apprenticeship to become a journeyman electrician, which I which I did when I was 16 I guess I was the youngest journeyman electrician in Long Beach, California. When when he was 16, and when I was 16. And he was 38. His life as an active businessman was over because he had an accident which blinded and paralyzed him and his brothers and my my mother’s brothers came over and started talking about which family is going to take what kid and put him into a hospital someplace and take care of him for the rest of his life. And instead, he asked me if I could take care of the family and he helped me build up another business and he’d started a business. When he got disabled it went down again. So I went out and started a neon repair business from my bedroom. And it was successful. And in a few months I hired people and pretty soon I made enough money to get the padlock off the door on the factory downtown and, and by the time I was 18, I was employing 15 people and five salespeople. And we were manufacturing and servicing and and then I learned a big lesson in life. My first lesson, there’s a difference between accounts receivable and accounts payable. And you as a CPA know that I didn’t know that. I just money that came out. I used to buy inventory and hire people and expand the business. No thought of things something going wrong. And yet the fleet pulled out of Long Beach in in when I was 18. And since a lot of our business was concentrated down on the pike, which kind of like a Coney Island of the West Coast. People didn’t pay their bills and yet people wanted to be paid the I owed. So I gradually had to liquidate the company over a period of time couldn’t borrow any money. And then I worked two jobs with the same company to eight hour shifts to pay off all the bills and and then decided I think I want to get into a different career neon sign contracting is to hazardous or to subject to the economy to subject to employees that work in the Chapin and and so how do I do that? Were you at 1880 So I spent a year from 18 to 19 Paying off all the bills, taking care of my family and and then a fellow said you know you can get a family a lot But if you go in the army, and maybe you get some education, because the GI Bill had been granted for World War Two veterans, this is in 1948 in June. So a recruiter convinced me that I get a family allotment, I’d get $75 a month, I’d have years to concentrate on what I wanted to do learn a another trade in the army. And that’s what I did. And then a year and a half later, the family allotment was eliminated in an economy move. And they had let me out, put me in the reserves. So I get a job. I did get a job, electrician. And then the Korean War broke out. And I’m recalled for the army. And, and then, after another year and a half, two years, I was able to get out. And another defining event.

Dick Buxton
I met a man who convinced me that if I my father had had a program to pay a disability income to him when he was disabled, because everything he had was on the company. And he had a lot of life insurance, but he was disabled, he didn’t die. And if he’d had that disability income, our whole life would have been changed. My brothers, my sisters, my mother and my father everything. And they had a little package that you save money and you get disability income, you get life insurance, and a major life insurance company was promoting this. And so therefore, I resigned from the job that I qualified for Long Beach City Police Department, I was ready to start Police Academy and I had a job as a bartender bouncer to earn extra money. I had resigned from that

Alan
Dick word. I’m gonna hold you at that. Okay, now leading up to this we need to take a quick break. We’re here visiting with Dick bucks. And today we’re, we’re hearing a lessons in life. You know how we started his career and built that successful wealth management practice throughout his life, but what I pick up on the street right after these messages

Alan
Welcome back. We’re here today with Deke Buxton. And he’s a giving us the history of life, lessons of life, my life which you’ve been through by Allah, you know, in which it’s an absolutely remarkable career, that few people know about what happened at age 16, your father being blinded, and you putting the burden on your shoulders and in two years you built a successful businesses have 15 employees and then all sudden the downturn in the economy, the flute fleet moving out of Long Beach was another less than a life and so on, when we’re now up to this transition of, you know, part time jobs working for the police department now going back to school. And so let’s pick up from their way

Dick Buxton
well, in the Army, for a total of almost four years. I learned administration. And and, and so therefore, that helped me get into another business that required an awful lot of discipline. And that was the life insurance business for small business people. And this special contract that provided an income to a business man, if you were disabled, i Dad had had that our whole lives would have been different. And I did well enough that I was invited into the home office to help reorganize a major insurance company in their field for us to get more streamlined, more effective, and helped develop a management development program and then went out in the field myself to build a state agency in Oregon and then build Northern California for this major insurance company, recruiting and training young people to go out and, and become well educated in this field. They typically had a college education before I recruited them and and then and then go out and help business people in their succession planning. And then another milestone in my career was that I discovered the employee stock ownership plan. We had a big pension division that a lot of pension profit train plans, and one of my associates introduced Luke, Luke Kelso to a one of our clients and the seventh ESOP in America with him. And ultimately, the company got into trouble my associate resigned from the board asked me to take his place. I went on the board, we fixed it. And I learned how to take a private company public internally. And and then another major event was I was active in the convention bureau in San Francisco and we wanted to attract more European business. So I led a travel mission to Europe and then fact finding, learned why we weren’t getting European visitors. Well, we changed all that. But during the actual mission, we had a sit down dinner for 300 German wholesalers in East and West Berlin, and the commandant of the of our militarist establishment over their authorized a bus drop behind the iron curtain in 73. And I saw the difference between the West German attitude and spirit of, of entrepreneurship, capitalism, and the East German attitude of I’m in prison, I can’t get out. And there was such a difference between the same race, the same Germans, based upon one was capitalistic. The other was socialistic, communistic. And I started thinking about the companies were we’d put employee stock ownership plans in, and the attitude of the employees toward their management was positive. And the companies were doing well, everyone was happy. And the companies that didn’t, where were where the ownership was tightly concentrated, and where the employees had nothing other than a salary, and when wondering how long they’re going to keep that and many of them organized into unions, and there was a hostile attitude between the two groups, management and employees. And I thought, what if I could? What if I could spread this concept nationwide. And so therefore, I eventually sold off all the other parts of my financial services firm that dealt with anything other than broadened ownership, and eventually went into business with a securities lawyer and, and we created a private capital Corporation, 37 years ago, and 35 years ago, we acquired the kelser company, and then spread that nationwide and started an association. So today, we have about 2500 members. And there are now 11,000 ESOP companies, employing 10 million people who had ESOP coverage. That’s more ESOP participants than union employees and private industry. So it’s worked out. And

Alan
it’s a household name to people show up and employee stock

Dick Buxton
ownership plans. Yeah, don’t wait wasn’t when I got into it. Many, many years ago,

Alan
but it’s interesting, you know, when you when you look at how it transitioned into, you know, coming to fruition, and how you focus on that career and help people with succession planning and, and now now that you’re at the point, you’re at your career, you can look back and say, you know, this all worked out really well. Although I’m sure along the way, it was a lot of uncertainty and

Dick Buxton
there were bumps. There were speed bumps, but I went too fast.

Alan
Dick, we need to take a quick break. But coming back, I want to I want to have you get some advice for the next generation of if you had to do it again. Or if you’re looking at what we’re looking at today, what are some of the things that advice you would give to this next generation happy to we’ll be right back after these messages.

Alan
Welcome back. We’re visiting here today with Dick Buxton, Dick is the one of the early pioneers of the employee stock ownership plan. And he’s given us a recount of how he came from starting his first business at the age of 16. Moving into the insurance business, and eventually building a company called private wealth management that has helped 1000s of companies go into the employee stock ownership plan. But Nick, I want to turn the page now. How old are you now? 8383. Okay, so you’ve had the spectrum of life. You were you were you’ve experienced in what you have. And now you’ve written a book called The lessons and leadership and life and I want to first start with what what motivated you to write, write this book?

Dick Buxton
Well, that book was a sequel to my first book, you build a successful business now what? And one of my advisory board members who had built a very successful business franchising, what they did with 300 banks around the country convinced me that private capital Corporation, my company, could license banks all over the United States to learn how to do what we did to provide succession planning for private companies, because banks are getting into that field. But in order to do that, we had to develop an entire process so that bank officers can be trained in it, and I had to get better known in the general business world, I was well known in the ESOP world, well known in the insurance world, but not generally well known in the banking world. And so he convinced me to write a book. And in in writing the book, I interviewed many, many of our clients, and I had a big editorial advisory board of attorneys, and CPAs, and all sorts of people that helped me. And in three years time it was published. And during that time, I identified 14, issues, kind of huge, huge landmines that people drive over. And, and they’d never make it. And I found out why, why only one and a half percent of all companies ever make it into the third generation of ownership. And if you’re a family company, the odds are a little better, but still pretty bleak. And they had to do with some basic misunderstandings about the difference between ownership and management. Just because you own something doesn’t mean to say you can manage it. And I found out that the most successful companies were the ones that divided that ownership and management, and went into a partnership with their management. So the management would own something, and they’d have skin in the game. And that, so that those are the first two things that that were apparent to me, the next thing is that is the, the income continuity for senior executives, and, and even for the founders, and how frail it was, and how much it dependent upon the company, like my own father, depending 100% on two companies he built and both of them went under, and he was left, you know, he went down with the ship. And I had to start from scratch. And then I went down, and I was young enough, and I wasn’t disabled, so I could recover. He was disabled, he couldn’t recover. And I discovered that, that that if you can set up an income continuity plan your key people, you’re more likely to keep them. And if at same time, they’re investing in the company, they’ve got skin in the game, they’ll start thinking more about profits, and not just their own salary. And, and then I then I realized that many other companies did the same thing I had done as a neon sign entrepreneur, spend everything on inventory and and hiring people and forget about reserves, who needs that you’ve got cash flow. So many companies don’t have reserves. And so I developed a concept of, of telling our clients to develop a go to hell fund. If the bank says, I’m sorry, we’re not going to renew your line of credit unless you do this. And so and put up your home and just say, hey, go to ah, I have my own reserves. I can last until another bank comes along. Thank you very much. How many companies have that? Then I discovered that the most successful companies that had reserves that had management contracts that had income continuity, they also had business objectives that were realizable for a greater number of people than just the inventor or just the founder. They also had an alternative mission. In the event, the primary mission went down. My father had an electronics company, he had electricians, he had sheetmetal people painters, in 1941 and 42, when neon signs couldn’t be sold, he could have gone to Douglas Aircraft and become a subcontractor. He didn’t think about that. He thought I’m in the neon sign business, he had no other mission. What private capitalist always had multiple missions. If the law changes in one area, we’re not out of business. If the economy changes in one area, we’re not out of business, how many companies have that? How many companies have an alternative mission? And then lastly, how many companies have have a human resource capability of developing a partnering culture within the company? Well, those are the seven issues that are challenging for any CEO. But then to hop off the CEO, and and what kind of reserves do they have? Are they chained to the oars of the company? Or if they had to, could they sell the company and their whole life wouldn’t change? Not too many. Everything’s in the company. Yeah. What do they have personal freedom of action? Or are they gone? 24/7 I typically ask a prospective client, could you take three or four weeks off and, and not be in touch with the company for that period of time and come back and still find your company and they’d be a long pause, maybe three or four days, maybe not three or four days. They were chained to the oars? They had not delegated, they had not developed management depths. So we try to help them do that. Their lifestyle goals I’ve seen many, many companies go under because the owner lived a great lifestyle and all the other employees took all the cuts so has to be that type of thing. And and then developing a political involvement to do something about the laws that affect business, having a philanthropic attitude, so that not being being unwilling to share with the people to help build the company, share with your community, and then doing exactly what they wanted to do. And as the business not fun anymore. How would you like to get into business it is. I wrote a I wrote a book about that and that led to lessons of leadership in life. And, and and that book is all about the experiences of highly successful people that made the cut. So

Alan
Dick if someone wants to get your book that title lessons and leadership and life how do they do that?

Dick Buxton
Well, it’s on Amazon and just go to my name Dixon C Buxton and both of my books will come up, and or they can go to our website, private capital corp.com.

Alan
That said, the book is lessons and leadership and life by Dixon, Dixon C Buxton amazon.com right, Dick, thanks for being on today’s show. Great to be here. We’ll be right back after these messages.

 

About Dick Buxton

Dick Buxton was only 16 got when he took over his father’s struggling neon sign business in Long Beach and built it into a viable company. But, eventually, the business fell prey to events beyond his control. Local economic conditions and insufficient working capital led to radical downsizing and the sale of assets to pay demanding creditors. Facing a bleak future, the teenager looked to the military as a way to get a formal education and carve out a new career.

The GI Bill helped Mr. Buxton work his way through college and land a management position with a major financial institution. Subsequently, with his star on the rise, he founded three financial planning organizations in Oregon and Northern California where he recruited, trained and mentored hundreds of estate, compensation, investment and financial planners.

With this background, in 1976, Dick co-founded Private Capital Corporation, and shortly thereafter, made a decision that would broaden his horizons. Mr. Buxton decided to serve on an early ESOP company board with Lou Kelso, creator of the ESOP concept. The two hit it off and in 1978 PCC acquired the Kelso Company. The firm opened offices in five cities and in 1979 PCC formed Kelso Investment Associates, one of the nation’s first private equity groups.

Also in 1978, Dick realized a milestone by co-founding the ESOP Association of America. Later, PCC sold the Kelso subsidiary to better focus on other capabilities — perpetuation strategies, exit strategies and planning for private companies. In 1987 he co-founded MBR Investment Associates, another private equity group. In the decades to follow, PCC associates and affiliates have designed and installed over 1,000 ESOPs as part of succession plans and the company has remained one of the nation’s most experienced firms in this field.

In addition to numerous articles in professional journals, Dick has written two books: “You’ve Built a Successful Business: Now What? A Guide to Perpetuating Your Business” and “Lessons in Leadership & Life, Secrets of Eleven Wise Men.

 

We hope you enjoyed this interview of Mr. Buxton; “Lessons of Life | Dick Buxton.  We feel his story could be inspirational to anyone interested in lessons of life from others verse learning the hard way through their own mistakes.  And hearing how his difficulties made him stronger and taught so much , might also help would-be entrepreneurs overcome obstacles towards success.

Dick Buxton continues to teach valuable lessons and we thank him for his time.

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This transcript was generated by software and may not accurately reflect exactly what was said.

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