Adam Brownlee - Building A Small Business That Warren Buffett Would Love

Table of Contents

Cover

Title page

Copyright page

Acknowledgments

Introduction: Painting the Picture of the Ideal Business There Is a Template

The ContextFocus on the Fundamentals First Who Says? Warren Buffett Does

CHAPTER 1 Buffett and the Fundamental Business Perspective Warren Buffett as Your Small Business Consultant Return on Equity, Return on Investmentthe Preview Apples to Apples

Investing from the Business Perspective A Spiel on Capital Gains

Turning Capital Gains into Cash Flow Buffett as a Cash Flow Powerhouse The Cash Flow Trifecta

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 Cant Beat Em, Join EmWhy a Franchise Makes Sense Track Records and Subway Cars

Purchasing an Existing Business

The Toll Bridge

How to Build a Consumer Monopoly

Branding

Some Branding Pointers

How to Build a Toll Bridge

The Best CombinationA 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 StartThe 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 StockThe Initial Rate of Return on a Business

Discounting

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 SeeThe 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

Assumptions

More Detail on the Ratios

CHAPTER 5 Retained EarningsThe 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, Its a Plan, Its a Bird, Its... Super Buffett Retained Earnings in Relation to Business Valuationthe 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 StreetThe Reverse Effects of Leverage My Poor, Poor Income StatementDamn You, Debt!

Good Debt Versus Bad Debt

Warren Buffett versus Good Debt versus Bad Debt versus Your Small BusinessWho 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 Hamburgers, Cokes, and Animated Mice... Oh My!

Just What Is Inflation?

So What? How Does This Apply to My Small Business?

The Opposite Is Also True

An Either-Or World Fixed Debt Can Be Your FriendHello, Friend Inflation Is Not Your Baby Daddy

Commodity-Type Businesses

CHAPTER 8 With Healthy Net and Gross Margins Before You Can Have Net Margins, You Must Have Gross Margins So What? What Say You, Warren?

Gross Margin Is Really Not That Gross Two Important Things

And Now, a Bucketful of Consumer Monopoly Margin CHAPTER 9 Building a Small Business That Warren Buffett Would LoveFinishing the Landscape

The Spirit

Finis! A Landscape Framed

The Business PlanWell, Yeah, There Is an Outline, but This Is Not War and Peace

Goals and MilestonesYou Said You Were Going to Live Up to Them, How Did You Do?

ImplementationIts a Pretty Document... So What?

About the Author

Index

Copyright 2012 by Adam Brownlee. All rights reserved.

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Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data: Brownlee, Adam, 1978

Building a small business that Warren Buffett would love / Adam Brownlee.

p. cm.

Includes index.