How to Build a Business Warren Buffett Would Buy
Being from Omaha, I have a better than working knowledge of home grown Berkshire Hathaway Company and its iconic leader Warren Buffett. As most should know, Berkshire Hathaway is a company that has the highest priced shares traded on the stock market (at one time over $150,000 for one share). This value has kept Mr. Buffett as one of the top 3 wealthiest people in the world for over a decade.
I have met several people that are original investors and are now worth millions and in some cases billions. In most cases, except for their philanthropy around Omaha, these people live their daily lives without the ostentatious lifestyle normally associated with such great wealth.
I personally know families that built marvelous businesses and sold out to Mr. Buffett. In every case they got up the next morning, went to work, and continued to run the same business with no changes in their personal work effort. These entrepreneurs turned Berkshire millionaires continued to give every bit of effort working for Warren Buffett as they did for themselves. They stand in sharp contrast to all the greed that has recently been on display from Wall Street bankers and corporate chieftains who are strictly in it for the money. The Berkshire folks I have met over the years are a much more respectable group of folks, and truly an embodiment of what has made our country great
There is no better place to get a feel of the inner workings of a Berkshire Hathaway type of company and quality of an entrepreneur that built it than in reading a brand new book entitled How to Build a Business Warren Buffett Would Buy; The R. C. Willey Story by Jeff Benedict. It is the story of how a small door to door sales operation started in the Utah countryside turned into a Billion Dollar Retailer. R. C. Willey is respected by consumers throughout Utah, Nevada, Idaho and California as well as manufacturers in the home furnishings, electronics and appliance industries.
More importantly, this is a story of a remarkable entrepreneur, Bill Child. He was the reluctant retailer that led this company from 1954 when founder R. C. Willey suddenly passed away. Bill inherited a business with no assets except customer’s goodwill, and he grew the business over time into a business that Warren Buffett purchased for $175 million in stock.
I would go so far as to say that if you are in the furniture business, the retail business, or you service any type of retail business, this is a must read book (to order go to www.TheRCWilleyStory.com). This is also a terrific book full of wisdom for the entrepreneur or small businessman who wants to grow his business over time.
There are no quick fix solutions to growing a main street business. We are not talking about becoming a Google millionaire. It takes hard work, dedicated employees, loyal customers and a willingness to try new things so that the business does not become stagnant. This book encompasses all of that plus what it takes to build a rags to riches story while still holding true to your inner convictions.
I think all my friends that are in the furniture business will empathize with many of the struggles to build a business one sale at a time. I think many of my friends working in small business will relate to the challenges and the innovation it takes to grow a profitable enterprise. And, I think many of my friends that are struggling entrepreneurs will be inspired by the success of having a lifetime of hard work rewarded.
One of the chapters that will resonate with any serious business person and can easily be incorporated into your own business philosophy is the 10th Chapter “Rules to Live By”. These are 8 common sense principles that are backed up by easy to relate anecdotes. For example, number 4 is simply put – Be Honest. I loved their saying “If you always tell the truth, you never have to remember what you said”. If Wall Street and Washington acted with this integrity we wouldn’t have the problems we have today.
In the book Bill Child is quoted as saying “The world changes. Many of the furniture companies that have gone out of business have done so because they failed to change.” We have that challenge today in the furniture business (as do many other industries) with lots of change being thrown at us. It will never be the same because “customers’ needs and expectations change”.
Whether you are a furniture rep, a retailer or manufacturer, you need to adapt to the changes or be overrun by them. I know several years ago we saw the erosion of commissions for furniture reps. We could have complained and got angry that the rep was being squeezed, but the reality was that the business has changed. We looked at the landscape and realized the large retailers like Walmart figured out a way to make a good living on very thin margins by working on volume. Consequently we designed our business with a volume model that has served us well.
Of course there are several other ways to make money including selling luxury products at a premium price to the affluent. It doesn’t matter what the model as long as you look at the landscape, determine your unique selling proposition and design your business model around serving that customer.
There are fourteen management principles and philosophies gleaned of decades of hard work and hard knocks that Bill Child lists at the end of the book. These simple ideas are worth more than a masters in business because they are easy to understand and proven to work.
Finally, in challenging times like these you can never be complacent. No matter how successful you have been, as Bill says “You can only stand on the laurels of what you did yesterday for a few minutes. Then you have the challenges of tomorrow.” There are definitely challenges and this book will inspire you to relook at your business and build for tomorrow.
I could write for pages about all the great takeaways in this book, but that would be doing a disservice to the author and to you. There are no excuses not to get the book right now. Go to www.TheRCWilleyStory.com and order the book. You will be glad you did.
Though I have met Mr. Buffett in Omaha a few times, the only picture I ever had taken with him was at an R. C. Willey store Grand Opening event in Las Vegas.
