When it comes to doing business there are many different challenges and scenarios that you will likely face. The way in which you deal with these is key to ensuring the success of your business and ensuring that at the end of the day you are able to ensure that your business continues to grow and remain sustainable.
It is no doubt that many businesspeople envy Warren Buffet not only as an investor but also as a very savvy and successful businessperson. In 2016 Buffet listed some of the most important lessons he had learnt during his time working in and with different businesses, amongst other important factors Buffet listed the following as being valuable lessons he had learnt:
Keep good company.
“In large part, companies obtain the shareholder constituency that they seek and deserve. If they focus their thinking and communications on short-term results or short-term stock market consequences, they will, in large part, attract shareholders who focus on the same factors.”
Keep your focus.
“Value stagnates in the presence of hubris or of boredom that caused the attention of managers to wander.” The result: A “sidetracked” leadership that “neglects its wonderful base business while purchasing other businesses that are so-so or worse” and further stated “inactivity strikes us as intelligent behavior.”
Keep costs low.
“Low costs permit low prices, and low prices attract and retain good policyholders.”
Keep employee incentives simple.
Buffett doesn’t like what he calls “lottery ticket” arrangements, such as stock options, in which the ultimate value could range from “zero to huge” and is “totally out of the control of the person whose behavior we would like to affect.” Instead, goals should be “tailored to the economics” of the business, simple and measurable, and be “directly related to the daily activities of plan participants.”
Keep out of trouble.
“If we can’t tolerate a possible consequence, remote though it may be, we steer clear of planting its seeds.”
Keep it small.
“Size seems to make many organizations slow-thinking, resistant to change and smug.”
Keep your reputation.
In Buffett’s mind, perhaps the most important piece of advice for businesses, and for everyone else, is to maintain a sterling reputation for honesty by never doing something you wouldn’t want to see reported on the front page of your local newspaper.