Think you've got nothing in common with Warren Buffet? Think again. You can glean important business understanding by taking a close look at what makes billionaire investors successful in what they do. Success: that's a nice thing to have in common.
1. They Choose Proven Industries
Buffet can afford to take a risk or two, but his hallmark is not investing in risky new ventures and unknown industries. Billionaire investors tend to put their money into industries that have proven themselves both in long-term demand and profitability. While the newest, most innovative, and interesting option is always tempting—who doesn't want to be smart enough to know about the next big thing—it isn't a sure bet.
Business Take Away: Invest your time and money in what has proven to have a strong ongoing demand and/or a strong ongoing returns for your business. You can apply this principle to everything from employees to strategies, innovation, and products.
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2. They Are In It for the Long-Term Investment
Investing in the stock market is not a get-rich-quick plan, and rarely does it work that way for investors. Billionaire investors look at stocks that will grow in value over time, and put money in early on, not expecting to pull a profit from it in a few months or even in a few years.
Business Take Away: You may find yourself with a runaway product, bringing in more profits than you ever imagined within your first year or two, but those scenarios are rare. The more common scenario is building slowly, finding investors, tracking money, building a brand, delivering on promises, and moving into profitability with a steady climb.
3. They Know Where Their Money Goes
When you've got billions to invest, it doesn't seem like a big deal to toss a few million here and there without worrying if you lose some. But the smart investors are not careless with their money—when money is your business tool, you've got to treat it with respect and care.
Business Take Away: As a business owner or manager you have to know where your money goes. This matters in terms of your time and in terms of the actual money flowing through your business. You need to track income and expenses, spot disparities, and continually check for holes where money may be slipping away, taking profit with it. That doesn't mean that you have to be money-driven, but it does mean that you have to be money-aware.
4. They are Constantly Learning About New Opportunities
While billionaire investors are not going to be swept away in the next big fad, they are in the habit of constantly watching the market, learning about new opportunities, and staying aware of technological developments, political changes, and other trends that impact the market.
Business Take Away: You have to be aware of what is happening in your business. If your main competition has just released a smashing new product that could threaten the survival of your business, you'd better know about it. Your business survival depends on your ongoing, continuing knowledge of what you sell, what your competitors sell, and what your market wants to buy.
5. They Don't Rest on Past Successes
If anyone could rest on their laurels, these folks could. But most big investors continue to watch the markets, to learn, to share their knowledge, to invest in new businesses and old ones, to plan for the long-term returns they may not even be around to see.
Business Take Away: You've got to keep moving forward. Innovation is a key to business success. Peter Drucker says "systematic innovation" is one of the "universal entrepreneurial disciplines," and a "condition for survival." The challenge of running a business is that the formula that worked for initial success is not going to be the formula that works for ongoing success.
Annie Mueller is a freelance writer based in St. Louis. She covers small business topics with a focus on lean/zero budget start-ups, business blogging, and simple (sane) ways business can use social media without selling their souls to Facebook. Her work can be seen online at Investopedia's Financial Edge blog, Young Entrepreneur, Wise Bread, Organic Authority, Modern Mom, and her own site, AnnieMueller.com. Find her on Twitter: @AnnieMueller.