The guide to making money the Warren Buffett way
The book that presents the same fundamentals that Warren Buffet used to turn an initial $105,000 investment into a $40 billion fortune in a way the general reader can apply, Building A Small Business that Warren Buffett Would Love is a succinct, logical, and straightforward guide to financial success. Highlighting one simple message: that Warren Buffett successfully invests in great businesses with strong fundamentals, it argues that these fundamentals can be replicated in a small business to yield outstanding results. Offering a solution for people wanting to start a business to provide additional income in today's uncertain economy, and designed to help entrepreneurs build fundamentally sound, small businesses using Warren Buffett's business investment perspective, the book covers:
An overview of Warren Buffett's investment methodology and how it applies to small businesses
The details of the Buffett investment criteria—a consumer monopoly, strong earnings, low long term debt, and high ROE with the ability to reinvest earnings—and the application of these fundamentals to both start-up and existing small businesses
An approach to building a small business that applies the well respected principles of Warren Buffett, the book presents an exciting new look at the steps to success that have been proven trustworthy by one of the richest men in the world.
Table of Contents
- Title page
- Copyright page
- Introduction: Painting the Picture of the Ideal Business
- CHAPTER 1 Buffett and the Fundamental Business Perspective
CHAPTER 2 The Importance of a Consumer Monopoly or Toll Bridge
- Briefly Stepping through the Quantitative Mirror
- And What It Is Not . . .
- What? The Consumer Monopoly and My Small Business
- Taking on the Big Boys Is a Big Mistake
- If You Can’t Beat ’Em, Join ’Em—Why a Franchise Makes Sense
- Track Records and Subway Cars
- Purchasing an Existing Business
- The Toll Bridge
- How to Build a Consumer Monopoly
- Some Branding Pointers
- How to Build a Toll Bridge
- The Best Combination—A Consumer Monopoly Toll Bridge or a Toll-Nopoly
CHAPTER 3 Strong, Consistent, and Growing Earnings
- Through the Eyes of Warren Buffett
- Earnings and the Consumer Monopoly
- And What We Do Not Want to See . . .
- Why This Is So Important
- Where to Start—The Income Statement
- Income Statement Forensics
- I Am Purchasing an Existing Business, This as Opposed to I Am Robot
- I Am Starting a Small Business
- How to Project
- Now for the Hard Part
- Marketing Research
- The “Splitting the Pie” Method of Marketing Research
- A Small Trial Run or, Just Open the Doors and See What Happens—Hello World!
- Reverse Engineer the Financials
- Take a Friendly Noncompetitor Out to Lunch
- Analyzing Larger Public Companies
- Bottom Line
- Application for Small Businesses
- The Initial Rate of Return on a Stock—The Initial Rate of Return on a Business
- Six Degrees of Hypersensitive Separation
- So What? How Does This Apply to My Small Business?
- Take Away
CHAPTER 4 Emphasizing a High Return on Equity
- Painting the Picture of Return on Equity
- And Now Some Examples
- Return on Equity Industry Averages
- Another Reason Return on Equity Is So Doggone Important
- To Rent or Not to Rent, That Is the Question
- Some Definitions
- Breaking Up Is Hard to Do
- Similar, Yet Different
- Of Assets, Cash Flow, and Financial Independence
- What Warren Wants to See—The Entire Reason We Are Covering This Topic
- Across the Universe of Investments
- How to Become Joe-Like
- An Afterthought on Financial Ratios
- Uses of Funds
- More Detail on the Ratios
CHAPTER 5 Retained Earnings—The Fuel for the Engine of Compounding Returns
- Death of the Compounding Engine
- Let Me Have a Dollar
- Of Retained Earnings and Llama Farms
- But . . . We Are Supposed to Be Discussing Small Business, Correct?
- Looking at a Phenomenon
- Retained Earnings, So What?
- Taxes, Taxes, Taxes . . . and Death
- Up in the Sky, It’s a Plan, It’s a Bird, It’s . . . Super Buffett
- Retained Earnings in Relation to Business Valuation—the Proof in the Pudding
- One Other Thing to Keep in Mind
- How Warren Buffett Determines the Price
- How the Heck Does This Apply to My Small Business?
- How the Heck Do I Apply the Historic Earnings Per-Share Method to My Small Business?
- Valuation as It Relates to Retained Earnings
- Low Research and Design, Low Required Investments in Maintenance and Upkeep . . . Low I Tell You, Low
CHAPTER 6 The Tumor of Long-Term Debt
- Debt: Friend or Foe?
- Wrapping Your Brain around Debt versus No Debt
- This Is a Two-Way Street—The Reverse Effects of Leverage
- My Poor, Poor Income Statement—Damn You, Debt!
- Good Debt Versus Bad Debt
- Warren Buffett versus Good Debt versus Bad Debt versus Your Small Business—Who Wins?
- How to Wire the Debt Prescription into a Small Business
- But What If I Am Starting a Business?
- Stocks Versus Real Estate Investing
- In Conclusion
- CHAPTER 7 Keeping Up with the Joneses
- CHAPTER 8 With Healthy Net and Gross Margins
- CHAPTER 9 Building a Small Business That Warren Buffett Would Love—Finishing the Landscape
- About the Author
- Title: Building a Small Business That Warren Buffett Would Love
- Release date: March 2012
- Publisher(s): Wiley
- ISBN: 9781118138885