How to Build a Business Warren Buffett Would Buy
Kaitlyn Smith ·
May 19, 2009
Southern Virginia University professor and best-selling author Jeff Benedict has been busy this year publishing and promoting two very different books.
In January Grand Central Publishing released
Little Pink House: A True Story of Defiance and Courage—a book about a controversial eminent domain case that went all the way to the Supreme Court. This month, Shadow Mountain Publishing released Benedict’s latest book,
How to Build a Business Warren Buffett Would Buy: The R.C. Willey Story.
In
How to Build a Business, Benedict tells the inspirational story of Bill Child and the lessons he learned building a highly successful furniture business that was purchased in the mid 90s by the legendary Warren Buffett.
At the young age of 22, Bill Child was given his father-in-law’s business, the R.C. Willey appliance store in the small Utah town of Syracuse. The company, which was flirting with bankruptcy, had accumulated too much debt and had an abundance of customers past due on their payments. But somehow, Child turned around the business and put it into growth mode, eventually building annual sales to $259 million before selling it to Buffett in 1995. Even after purchasing the company from Child, Buffet kept him on to continue running the company.
Under the leadership of Bill Child, R.C. Willey added furniture, a more profitable product than appliances and an obvious, natural extension of the business. The business built warehouse operations to support store growth while a major competitor focused its attention more on store growth and ultimately failed. R.C. Willey hired the right people, including Child’s younger brother Sheldon, who was a master salesman and eventually became president of sales. The company shunned mortgages and only borrowed to finance its accounts receivable. In time R.C. Willey even offered financing to its customers, creating a profitable credit business.
As a devout member of The Church of Jesus Christ of Latter-day Saints, Child refused to have his stores opened on Sundays in respect to his beliefs. When talk of expanding to neighboring states like Nevada and Idaho came up, Buffett thought the effort would fail since almost a quarter of furniture sales in the United States are made on Sundays. Child firmly believed that the venture could still succeed outside of Utah. He proposed to Buffett that he would personally pay for the land and the construction for a store in Boise, Idaho. If the store were not successful within the first six months, then the company would close the store. Buffett agreed to the proposition, and within the first year the store generated $50 million in sales, nearly doubling the expectations set by Buffett.
Benedict presents Child’s success story as a riveting page-turner. “[He] has taken a little known story about Warren Buffett’s acquisition of R.C. Willey and brought it to life, offering up many secrets to success along the way,” wrote David Neeleman founder of JetBlue Airways and CEO of Azul Airlines. Neeleman was one of the subjects in a previous Benedict book,
The Mormon Way of Doing Business.
Benedict is an award-winning investigative journalist and best selling author of eight books, which have been the inspiration for features on 60 Minutes, ABC News 20/20, Dateline, HBO Real Sports and the Discovery Channel. He has been a contributing writer for Sports Illustrated, the Los Angeles Times and the Hartford Courant. He holds a J.D., an M.A. in Political Science and a B.A. in history and he practiced law in Connecticut. He is currently a distinguished professor of English at Southern Virginia University where he teaches an advanced writing class and a contemporary issues class.
Read a
review of How to Build a Business in Connecticut’s
The Day.