5 Business Lessons From Warren Buffett
Warren Buffett is an American business magnate, investor, and philanthropist who serves as the chairman and CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth of US$84 billion as of June 3, 2018, making him the third wealthiest person in the world.
1. You Should Start your Own Business Now
Do not wait for the best time to start your own business. The perfect time to start is now. Warren started selling gums, Coca-Cola and weekly newspapers as a child. He also started investing in the stock market at age 11 after visiting the New York Stock exchange at age 10. You easily get rich in business if you know when you are wrong. Warren started his Hedge Fund at age 17. It is good you start early, make all the mistakes early and correct yourself early. Tomorrow is not the best time, NOW is.
2. Thrive to be Different
Always try out your own method/idea of doing things. Do not always imitate others. Do not make business decisions based on what every other person is saying or doing. When Warren Buffett began managing money in 1956 with $100,000 cobbled together from a handful of investors, he was dubbed an oddball. He worked in Omaha, not Wall Street, and he refused to tell his parents where he was putting their money. People predicted that he’d fail, but when he closed his partnership 14 years later, it was worth more than $100 million.
3. Reinvest Your Profits
For your business to grow, you need to continually reinvest your profits. Most entrepreneurs are always tempted to spend their first business profits. This is not a good idea if you wish to grow better than you where. Warren knew about this early enough. In high school, he and a pal bought a pinball machine to put in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the venture was sold, Warren Buffett used the proceeds to buy stocks and to start another small business.
4. Know the Terms of the Business
Understand the conditions attached to any business before venturing into it. If you are doing a work, know your pay; if you are combining to startup a business, know your ownership percentage/shareholding. Warren Buffett learned this lesson the hard way as a kid when his grandfather Ernest hired him and a friend to dig out the family grocery store after a blizzard. The boys spent five hours shovelling until they could barely straighten their frozen hands. Afterwards, his grandfather gave the pair less than 90 cents to split. Warren Buffett was horrified that he performed such backbreaking work only to earn pennies an hour. Always nail down the specifics of a deal in advanced even with your friends and relatives.
5. Be Swift in Taking Business Decisions
Though it is advised you get enough information about any business you wish to venture into, you have to be swift in taking decisions. Warren Buffett prides himself on swiftly making up his mind and acting on it. He calls any unnecessary sitting and thinking “thumb sucking.” When people offer him a business or an investment, he says, “I won’t talk unless they bring me a price.” He gives them an answer on the spot.