ENTREPRENEURSHIP / MAR. 18, 2014
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Secrets From The King: Warren Buffet’s 5 Tips for Successful Business

Warren Buffet Success Tips

These days, if you find yourself valued at, oh, say, a billion dollars, then there’s a fair chance that roughly ninety-nine percent of all people are going to have a bone to pick with you (according to the Occupy movement, anyway).

Warren Buffet on the other hand — billionaire that he is — has proven himself to be grounded, wise, and level-headed about his status as one of the world’s richest men. Among other things (butler fairness, incredible wealth), Buffet is known for his annual letters to his shareholders. In the interest of sharpening your already savvy skills, here are five tips on successful business gleaned right from the words of one of business’ kings:

Invest in What You Already Have

A lot of people view the world of finance as something akin to the world of Hungry, Hungry Hippos: get all that you can, as quickly as you can, and damn all the rest. So, to perpetuate a metaphor, what happens to those tiny white marbles that you already have? Do you just let them sit there? It is Buffet’s advice — and practice — to invest huge sums of money on properties or companies already under his wing.

Why? Simply put, to see them prosper. If you’re going to go out of your way in the world of business to acquire something, or to put something on the market, you had better be committed to seeing that endeavor succeed.

Gamble

Warren Buffet is no stranger to taking financial risks, but what sets him apart from the rest of the would-be billionaires is that he only bets on sure things, or as close to a sure-thing as anyone can reasonably get. To quote an adage, “you can’t make an omelet without breaking a few eggs.”

Taking risks is part of the game, but taking uninformed risks is nearly as good as setting your money on fire. What does Buffet like to bet on? America. He has “always considered a ‘bet’ on ever-rising U.S. prosperity to be very close to a sure thing.”

People Matter

Buffet regularly refers to his teams of “expert” managers. Obviously he isn’t alone at the top, swimming in great pools of money and laughing all the while. No, instead he employs people who are experts in as many fields as are necessary: Expert managers, expert analysts, expert assistants...If you want your business to run like a well-oiled, finely-tuned machine, then you are going to need that caliber of people to help it run.

Know the Game

Buffet has been in the financial game for nearly seventy years. As a result, he has learned by experience a great many lessons that he finds totally relevant to any business he has going on today. “Society will forever need massive investments in both transportation and energy,” he writes. Just as so, the world will always need plumbers.

If you can identify an area that provides — or will always provide — for people in a real, essential way, then why not get involved? Find a market for which there will always be demand.

Be Level-Headed

Stocks rise and fall. It’s as natural a cycle as, say, the ebb and flow of the tides. With that said, there will always be times in the stock market where it seems that prices are crashing, and the only hope is to sell off anything you have at whatever profit you can muster. Buffet advises against this. If you have solid investments in business where you can foresee a long-term gain, then hold out. Conversely, learn to recognize when people are “panic selling.” Chances are you can come up on a great bargain, just because someone else it too scared to hold on to it. 

There you have it: Five tips from Warren Buffet’s letter to his shareholders. Check it out for yourself: He writes twenty-three pages’ worth, and there is whole lot more wisdom hidden away in there for anyone who goes and looks for it.

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