Warren Buffett has dished out more than his fair share of helpful advice over the years, so here’s a look at ten of his best tips for every budding entrepreneur…
Warren Buffett, CEO of Berkshire Hathaway, is worth an estimated $65.8 billion dollars, but he didn’t acquire that overnight and neither will you – unless you simultaneously win every single lottery in the world in the same week…
While Warren can’t, or more to the point, won’t, give us any of his hard earned money, he has given us a wealth of knowledge over the years and so we’ve picked out six of his top tips that we think will help you with your start-up.
1. Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.
We assume rule no.3 is: don’t speak about rule no.2… we could be wrong. Anyway, what Warren really means by ‘Never forget Rule no.1’ is that while making money is the key to business, keeping money is the key to owning a very successful business.
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.
Always remember to think about what you’re going to say before you say something that you might regret later in life. Your reputation is everything. Don’t forget that…
3. It’s better to hang out with people better than you. Pick out associates whose behaviour is better than yours and you’ll drift in that direction.
Spend time with people who have a positive outlook on both life and the business world and that positivity will transfer to you. Spend time with people who have a constantly negative outlook and you’re setting yourself up for some dark times ahead.
4. Risk comes from not knowing what you’re doing.
If you want to eliminate risk then you better know the ins and outs of your business. If you find yourself twiddling your thumbs then start reading up on your chosen sector. You never know what you might learn.
5. Admit mistakes and move on.
In the shareholder letter to Berkshire Hathaway investors back in 2010, Buffett let everyone know that he was responsible for a $44-million blunder:
GEICO’s managers, it should be emphasised, were never enthusiastic about my idea. They warned me that instead of getting the cream of GEICO’s customers we would get the… well, let’s call it the non-cream. I subtly indicated that I was older and wiser.
I was just older.
6. Understand the power of humour.
Starting up your own business is no laughing matter – unless you’re setting up a comedy club, we suppose – but there is room for a few laughs along the way.
As well as having a disarming affect humour also helps to keep readers engaged, so that 20-page report you prepared for a potential investor won’t seem half as daunting to them if you throw in a few good one-liners. Here’s a particularly good one-liner from Warren that appeared in a shareholder letter to Berkshire Hathaway investors.
Charlie and I enjoy issuing Berkshire stock about as much as we relish prepping for a colonoscopy.
That’s it for this week, but check back next week when we’ll have more top tips from some of the world’s most successful business people.
