Top 4 business lessons from Warren Buffett

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You’ve probably heard about Warren Buffett, undoubtedly the most accomplished investor in the world. But what many don’t know is that he’s a fierce advocate for self-improvement, with a treasure trove of advice to better our businesses and our lives.

One of Buffett’s famous self-improvement tips, which he deems the key to his success, is to “go to bed a little smarter each day.” He says: “that’s how knowledge builds up. Like compound interest.”

However, Buffett doesn’t think of himself as a natural genius. He gives all his credit to the effort he puts into exercising his mind: reading, creating time to just sit and think, investing in personal and professional development, and surrounding himself with the right people.

To go to bed a little smarter today, we’ve cherry-picked Buffett’s top 4 lessons that separate successful businesses from the rest.

Understand your business to the core

“Never invest in a business you can’t understand.” ~ Warren Buffett
When the Internet bubble started, many businesses and entrepreneurs jumped at the opportunity to start their own technology-related company. Buffett didn’t budge, because he didn’t understand the technology industry. He understands the financial service industry, so he stuck to it. Simple as that.

Understand your business numbers

Accounting is the language of business. ~ Warren Buffett

For example, they say that cash flow is the life blood of a business. But how would you effectively manage your business’s cash flow if you don’t understand your business’s numbers? 

Most importantly, don’t let the world tell you that only accountants truly understand a business’s numbers. We have access to more information that we can ever dream of – we can educate ourselves on our business’s numbers with a few YouTube videos or books. With this financial literacy, you have maximum control of your business’s financial position, through both the good times and the bad.

Strong management is vital

Focus on your customers and lead your people as though their lives depend on your success. ~ Warren Buffett

Fulcrum’s Managing Director, Delarey Van Dyk, believes that “the strength of a leader solely depends on the team you work with. I believe in a consultative management style and being inclusive in most decisions made. My team knows at all times where they stand. I leverage each persons’ strong points and never take credit for anyone else’s input. I believe that that has helped me to be where I am today.”

Many people can successfully start a business, but it takes a strong, unified management team to grow and sustain that business.

Know yourself

It takes 20 years to build a reputation and only five minutes to ruin it. If you think about that, you will do things differently ~ Warren Buffett

When the ancient Greek philosopher Socrates was asked to summarise what all philosophical knowledge could be reduced to, he replied: “Know yourself.”

The character trait that Buffett focuses on is integrity: know yourself, and stick to what you believe in. If you have a lot of integrity, it will reflect in your business’s culture.

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