The May 6, 2023 Wall Street Journal had a large feature article on Warren Buffett and his track record of investments. What was really interesting was his saying he’s made a great decision every five years.
Our clients don’t have five years when it comes to buying or selling a business. They can’t afford to do it wrong because if they do there might not be another chance. That said, sellers should prepare their business to meet Mr. Buffett’s criteria, which is what a good buyer will want. That includes, as Buffett says you maximize your chances if you:
- Are patient.
- Are picky.
- Act only on your strongest convictions.
- Have a model for thinking about how to make good opinions.
- Invest in the right people.
I’ll add one more, get input from others experienced in what you’re doing (not from your golf or cycling buddy). Buffett has this with his partner Charlie Munger plus his team. When it comes to buying, selling, growing, or transitioning a business there are a lot of great people for your team.
Finally, Buffett looks for “sensibly priced opportunities… with honest people, competitive advantages, and understandable, enduring, and mouthwatering economics.”
“Skate to where the puck is going not where it has been.” Wayne Gretsky
“Don’t count the days. Make the days count.” Muhammed Ali