The name Warren Buffett symbolizes wealth, wise investment practices, and an impeccable business sense. Best known for his massive company, Berkshire Hathaway, and being the third wealthiest man in the world, Warren Buffett started out selling magazines and foodstuffs door-to-door as a young boy.
He was so inspired by a library book on entrepreneurship that he spent the rest of his elementary, middle school, and high school years engaged in one money-making pursuit or another. He attended college for business, and through a series of mentorships, strategic partnerships, and calculated investing, he grew Berkshire Hathaway into the company that it is today.
What makes his process so special?
Warren Buffett is known for analyzing data and taking calculated risks, but he also gives some pretty sound advice to other entrepreneurs. Consider these ideas from the “Oracle of Omaha”:
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Keep Your Eyes on the Future
You can’t want something and then sit around for it to happen. You have to actively work toward a powerful future. Take a look at your business goals. How are you going to achieve them? What are you willing to do to make them a reality? It’s important to note that being willing to do whatever it takes to achieve your business goals is not the same as being unethical. In fact, being honest and ethical is one of Buffett’s company mantras.
Go With What You Know
This is advice that is repeated over and over by Warren Buffett, Dave Ramsey, and other financial gurus. Go with what you know. If you don’t completely understand a business, you cannot expect to remain competitive. Before you dive head-first into a new business venture, make sure that you completely grasp all aspects of the trade. If you don’t know everything already, find a mentor or equally-yoked business partner to help fill in the gaps.
What do you believe in? Warren Buffett calls this his “Tenets of Investing,” but it could easily apply to any aspect of your business. You need to take a little time to interview yourself and figure out what you want. What should your employees know about you and your business? Where are your boundaries? Think of this as your company’s personal manifesto. Though it should be a living document, you should never stray from what you believe are your and your business’s core values.
This tip applies to both businesses and people in general. The only constant in life is that things are going to change, so you have to be ready for it. Just look at how the accessibility of smartphones over the last 10 years has changed how businesses operate. Who knows how the business world will look 10 years from now.
Stay on top of trends, and pay attention to rising technology that may impact your business in the future. Warren Buffett is known for keeping his eyes to the future, and though not all of his business endeavors panned out, he made sure to stay adaptable to whatever life threw at him.
In Warren Buffett’s world, this means to hold onto stocks for the long term, regardless of fluctuations, but you can apply the same logic to any business. You need to do everything in your power to build up an effective management team.
Cultivate a company atmosphere that encourages hard work, rewards positive behavior, and builds employee loyalty. Quash manipulation, back-stabbing, and disunity as quickly as possible, and focus on working as a team.
Surveys show that people are more willing to stay in a lower paying job that has a great working environment than transition to a job that is higher-paying but more toxic. Reduced employee turnover serves multiple benefits: you save the money you would have spent to rehire and retrain, you can cross-train experienced employees, and your employees are willing to work harder out of loyalty to the company.
Surround Yourself with Excellence
Currently, Warren Buffett has some of the richest people on Earth working in some of the highest positions in his company, but many were multi-millionaires before starting in their current positions – meaning, they’re not necessarily in it for the money.
If you can find employees who are passionate about your company and its ideals, they will make the best members of your team. Don’t get me wrong: we all need a paycheck, but spend a little extra time during the hiring and training process to hire exceptionally competent and passionate people who will give 100% to their jobs. Quality employees are the difference between a mediocre company and an excellent one.
Don’t Let the Lows Get You Down
If you listen to none of the other tips, listen to this one: there will be highs, and there will be lows, but you can’t let the lows pull you under. It’s okay to have bad days. Like I mentioned earlier, not all of Warren Buffett’s business ventures succeeded, but he kept working with dogged determination regardless of the lows. At various times throughout his career, he lost multiple billions of dollars in a very short period of time, but he kept refocusing his goals and moving forward.
From his relatively humble start at the age of seven to his massively successful enterprise today, Warren Buffett continuously strives to analyze the data, make informed decisions, stick out the tough times, and keep an eye on the horizon. By working to incorporate these qualities and the tips described above, you can grow your own business based on Buffett’s exemplary pattern of success.