Buying a business – 6 top tips

Buying a business – 6 top tips from Warren Buffett.

1. know the size of what you are looking for – in Berkshire Hathaway’s case, at least $75m pre-tax earnings

2. demonstrated consistent earning power – future projections are of no interest, nor turnaround situations

3. businesses earning good returns on equity while employing little or no debt

4. management in place – you can’t supply it

5. simple businesses – if there’s lots of technology, you won’t understand it

6. an offering price – you don’t want to waste your time or that of the seller by talking, even preliminarily, about a transaction when price is unknown.