Warren Buffett helped me build my business -- even before I decided to try my hand in entrepreneurship. Several years before I founded my own company, a colleague gifted me Warren Buffett’s biography. His ideology and approach to communication and management continue to influence me to this day.
While it’s universally recognized that Buffett has exceptional investment acumen, his fearlessness and willingness to go against traditional business norms have inspired me to build an organization that does the same.
Here are three Buffett quotes your business should live by:
1. “There seems to be some perverse human characteristic that likes to make easy things difficult.”
Warren Buffett’s laser focus on his areas of competence has been essential to his success. As he says: “I’m no genius, but I’m smart in spots, and I stay around those spots.”
It’s very common, especially amongst accomplished executives, to achieve a level of success then branch out into other areas in an effort to expand their businesses. Though Buffett has made his fortune in investing in several industries, he’s remained focus on the areas he knows best. Put simply, he’s an expert in identifying the most basic opportunities that show long-term potential and executing on them flawlessly.
The best business owners are great at determining their area of competence and focusing on how they can capitalize on that competitive advantage, rather than trying to do everything and solve unnecessarily complex problems.
2. “What’s nice about investing is you don’t have to swing at every pitch.”
Despite many misconceptions, Buffett rarely invests but and when he does, he is in it for the long haul. He’s always invested in companies that have a strong brand and a personality with the right leaders driving them forward.
If you want your business to succeed, think like Buffett: big and long term. Invest in your brand, hone in on what you’d like to accomplish and stick with it.
3. “Be greedy when others are fearful, and be fearful when others are greedy.”
This quote describes Buffett’s strategy to a tee -- an aggressive market player when others deem an investment unworthy. Think back to the salad oil scandal of 1963 when Anthony “Tino” De Angelis, a savvy conman from New Jersey, discovered a way to exploit an American Express program that gave business loans based on collateralized inventory. Through an elaborate system of deception, De Angelis was able to obtain loans on an oil inventory greater that the total national holdings combined. While everyone stood clear of AMEX stock, Buffett did the opposite. He visited local businesses and observed business owners continue to accept American Express Travelers Cheques and consumers continue to use them. Contrary to virtually every investment expert at the time, Buffett purchased more stock and established a 5 percent stake in the company. It reportedly cost him $20 million at the time but now 50 years later, it was obviously incredible foresight.
Whether you aspire to run a multinational company or your local mom-and-pop store, this is an important lesson to apply. Innovate and solve a problem rather than following suit with the rest of the industry.
Apply these ideas to your company’s operations and you’re bound to see a substantial improvement. More importantly, you’ll feel liberated by your ability to confidently make sound choices -- especially when you’re going against the grain and doing what’s best for your business.