Berkshire Hathaway Chairman, Warren Buffet, advises entrepreneurs who aim for long-term success to look for industries where the external forces work to their advantage. The revered investor drew insight from his early struggle while building what today represents one of the largest investment firms in the entire globe.
Buffet bought two troubled textile mills in the late 60s. He placed some of the best managers around in-charge. But unfortunately, the brilliance and good intentions of the managers couldn’t turn around the fortune of the business. After two decades of twists and turns, the chairman threw in the towel and closed the mills.
Why? The economy and trend in the operating environment did not favour the business at such period.
That experience has driven most of Berkshire Hathaway’s investment decisions.
In fact, Buffet insists that the best way to be successful in business is to locate an industry where the market, the trends, and the economy (often regarded as the external forces) play to one’s advantage. It is like going into fintech, off-grid power and agribusiness in current Nigerian market.
According to the Chairman of Berkshire Hathaway, “The interesting thing about business, it’s not like the Olympics. You don’t get any extra points for the fact that something’s very hard to do.”
He adds, “So you might as well just step over one-foot bars, instead of trying to jump over seven-foot bars.”
The octogenarian has successfully led Berkshire Hathaway to invest in Coca, Apple, Heinze, and presently solar farms. His market vision is top-notch.
The point is success in business is mostly about being future-smart. Entrepreneurs must develop the capacity to envision the direction of the market based on new consumer desires, tastes, lifestyles, government policies, seasonal occurrences, and rare events such as the impacts of the Coronavirus, trade-war, natural disasters etc.
Where business is being positioned to take advantage of any of the events and changes, success to some extent is guaranteed.