I hope this message finds you in good health and good wealth. Today, I wanted to share with you some key principles that I believe Warren Buffett would evaluate if he were to buy your practice today. As one of the most successful investors in the world, he has shared many ideas over the years about life and business. Here are what I believe to be the top 7 most relevant to practice owners:
- Keep things simple: Warren Buffett believes in keeping things simple and avoiding unnecessary complexity. He follows the KISS principle – Keep It Simple, Stupid. In his own words, “I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”
- Don’t overcomplicate your practice or chase shiny objects.
- Invest in yourself: Buffett stresses the importance of investing in yourself, whether it’s reading books, attending conferences or improving your skills. He says, “The most important investment you can make is in yourself.”
- This doesn’t mean simply to take more CE courses or learn new procedures, but rather how to be a leader and investor in your business. These are far more valuable skills than just clinical skills alone, and they allow you to teach and train your team to replicate your clinical care.
- Practice patience: Warren Buffett is known for his long-term perspective on investing. He believes in buying good companies and holding on to them for years. He advises, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
- Future revenue is more important than today’s revenue. Although both matter, you are in it for the long haul, to build a valuable asset that you can one day sell for multiples on your initial investment. Plus it creates jobs and expands your local economy.
- Manage Risk: As he says, you should not test the depth of a river with both feed in the water.
- Don’t put all of your eggs in one basket. Don’t get too many baskets either.
- Don’t save what’s left over, spend what’s left over after saving.
- Another great book on this is Profit First or Profit First for Dentists. You can look back on older episodes of our podcast for more info on this, but it’s a great way to manage your expenses. Always pay yourself and your practice first, and have a profit account setup with your bank.
- Surround yourself with the right people: Buffett believes in surrounding himself with people who share his values and vision. He advises, “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours, and you’ll drift in that direction.” He once said, “In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you.”
- Develop a hiring process (if you don’t have one, feel free to contact us for a copy), and stick to it. Only hire “A Players” and don’t settle for B’s and C’s.
- Honest advice is an expensive gift. He says, “The more you learn, the more you earn.”
- Don’t expect honest advice from cheap people. Pay to be part of coaching and mastermind groups, this has been one of the most motivating, fun and high ROI activities I’ve been a part of over 13 years of practice ownership.
I hope these principles will be helpful to you in both your personal and professional life. If you have any thoughts or questions about these principles, please do not hesitate to reach out to us, or join our next Advanced Membership Mastery mastermind group at yourpracticegrowth.com/amm.