Undeniably, entrepreneurs can learn a lot from Warren Buffett, the chairman and CEO of Berkshire Hathaway. Buffett, an American business magnate, investor, and philanthropist, is commonly considered the most successful investor of the 20th century.
He was ranked as the world’s wealthiest person in 2008 and is the third wealthiest person in the world as of last year. Regardless of your industry or occupation, here are five of his truisms that entrepreneurs should take note of.
1. “Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.”
As a small business owner your vision may be to impact the world, but if you’re running a for-profit entity your accompanying goal is to earn a profit. One of the first considerations of any business should be the business model – how you will create, deliver, and capture value and the development of a revenue model – essentially how you will make money.
As a startup, it’s important to learn how to make money — but even more important to know how to keep it.
2. “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
At the onset of your company’s launch it’s important to define your corporate values, vision and mission. Utilize these declarations as a benchmark for the development of your company’s culture and how you will conduct business.
Build your brand with the future in mind and communicate your company’s values through interactions at every level – customer service, sales, marketing, public relations and partnerships.
3. “Can you really explain to a fish what it’s like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has exactly the same kind of value.”
Any small business owner can attest to this fact – “Experience and execution trumps theory any day.” Taking small measurable steps each day will set you up for long-term success.
As you grow your business, take definitive action … learn what works and what doesn’t. Repeat more of what works, benchmark your learnings and improve upon past successes.
4. “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
As entrepreneurs, we benefit from acknowledging our strengths and being honest about our weaknesses. Once this is accomplished, seek to develop mutually beneficial partnerships. The goal of your joint ventures and strategic partnerships should be to add value to another company and simultaneously eliminate your own weaknesses. No man is an island.
5. “Risk comes from not knowing what you’re doing.”
What’s the quickest way to eliminate risk? Increase your knowledge. If something appears risky, a major factor of our perception is backed by our limited knowledge. Find ways to become more knowledgeable about the areas you struggle with in business. The more you know … the less risky your next plan seems.