From Wall Street to Main Street: What Warren Buffett Can Teach Small Business Owners

By: Keith Olson, Williston Center Director

While Warren Buffett is best known as one of the world’s most successful investors, his principles for selecting companies overlap powerfully with how to run and operate a successful small business. At the ND SBDC, we think Buffett’s timeless wisdom applies just as much to Main Street as it does to Wall Street and can be a powerful reminder that simplification can be powerful and thought-provoking.

Here’s how 13 of Buffett’s most iconic lessons can help you strengthen your business today:

1. Stick to What You Know

Buffett: Invest in businesses within your circle of competence.
You: Focus on core services/products you understand deeply, and avoid chasing trends you don’t fully grasp. Find your passion, though. Don’t spend your life doing things you don’t like. The old adage of love what you do and you will never go to work again is very true.

2. Hire and Empower Great People

Buffett: Attract and retain outstanding managers.
You: Surround yourself with a reliable team. Hire people who love what they do, and give them the tools to succeed. Honor your word and let good employees flourish in your system, otherwise they will become your competition.

3. Don’t Waste Time on Predictions

Buffett: Forecasting markets is a fool’s game.
You: Don’t get paralyzed by trying to predict the economy, Instead, focus on what you can control: costs, quality, and service. Projections should be for your business building on the things you are actually able to control and have an impact on. Remember, predictions and projections are not the same.

4. Welcome Slow Periods as Opportunities

Buffett: Declining stock prices are a buying opportunity.
You: Use slow seasons to improve operations, train staff, and build marketing systems. Everyone needs, rest even a business. If you never take a breath, it will be hard to take a look at your business and see what you can improve on, or when it is a good time for facility and equipment improvements. Learn to see opportunity.

5. Be Smart with Your Capital

Buffett: Great managers are master capital allocators.
You: Reinvest profits wisely, such as equipment, marketing, or staff, not just into flashy upgrades. This speaks for itself, businesses that don’t reinvest in themselves become hard to, if not impossible to sell.

6. Build a Strong Brand & Reputation

Buffett: Phenomenal companies offer unique value.
You: Create a customer experience that’s hard to replicate, deliver consistent quality, and protect your brand’s reputation. Service sells. People develop habits based on how they are treated. Take care of your customers and they will take care of you.

7. Have Skin in the Game

Buffett: He respects leaders who are personally invested.
You: Take ownership seriously, because your financial and emotional investment sets the tone for everyone around you. Businesses with absent owners tend to have much less goodwill than them. When it comes time to sell, the business shouldn’t be so dependent on the owner that it can’t function without them, but what opportunities might be lost if the owner isn’t present and actively engaged in the business?

8. Think Long-Term

Buffett: “Our favorite holding period is forever.”
You: Build your business to last. Invest in systems, relationships, and sustainability, not just short-term gains.

9. Be Bold When Opportunity Strikes

Buffett: Swing heavily when the odds are in your favor.
You: When you see a clear growth opportunity, grab it, expand services, sign the lease, or launch that new product.

10. Track What Really Matters

Buffett: Measure operational excellence with ROI (Return on Investment), not hype.
You: Don’t just chase top-line sales. Watch your margins, efficiency, and customer retention. Ratio analysis is a great way to measure yourself against your peer group. Figure out the standard you want to measure against and be held to.

11. Don’t Be Afraid to Be “Boring”

Buffett: Invest in steady, reliable businesses.
You: It’s okay if your business isn’t trendy. What matters is consistency and solving real problems for real customers.

12. Reinvest for Growth

Buffett: Great businesses reinvest profits.
You: Allocate earnings into areas that generate return: new products, new markets, or upgraded systems. Businesses without earnings do not have saleable value.

13. Know Your Strengths

Buffett: He buys simple businesses with great leadership and strong returns.
You: Keep your operations understandable, don’t overcomplicate, and streamline what you do best and scale that.

Final Thoughts:

Buffett’s brilliance lies in simplicity, discipline, and long-term thinking; these are all traits that define many successful small business owners.

Ask yourself, am I investing wisely in my own business?

Even though these thoughts come from large businesses that are investor-driven, they still apply to small main street businesses as well. If you follow them, they will likely provide measurable returns to you too!