Building a business that Warren Buffett would buy requires a focus on key principles that have guided his investment strategy for decades. These principles include:
- Strong competitive advantage: The business should have a sustainable competitive advantage that allows it to generate excess returns over its competitors.
- Predictable earnings: The business should have a history of consistent and predictable earnings, which provides stability and reduces risk.
- Low capital intensity: The business should not require significant capital investments to maintain its competitive advantage, which allows for higher returns on invested capital.
- Able management: The business should be led by a capable and experienced management team with a long-term orientation.
- Fair valuation: The business should be available at a fair price that provides a margin of safety for investors.
By focusing on these principles, businesses can increase their chances of attracting the attention of Warren Buffett and other value investors.
