Berkshire Hathaway’s Annual Report Remains Well Worth Reading

The 2014 Annual Report from Berkshire Hathaway came out recently. I always look forward to reading Warren Buffett’s letter to shareholders, but I found this year’s report especially worth reading.

2015 is the fiftieth anniversary of Buffett Partnership Ltd. taking control Berkshire Hathaway (then a faltering textile manufacturer). The textile manufacturing part of the business has been gone since the 1980s, but Buffett seems to be doing just fine.

A few points specifically stood out while I was reading.

  • Buffet doesn’t like a lot of the standard numbers used to calculate a company’s worth (even though the companies owned by Berkshire Hathaway tend to be successful by those metrics). He’s clearly comfortable with all sorts of financial metrics, but keeps score by his own numbers. That’s a set of characteristics well worth copying.
  • Berkshire Hathaway owns nine companies that, if those companies were independent, would be members of the Fortune 500. Berkshire Hathaway also owns BNSF, which transports about 15 percent of all intercity freight in the U.S. (more than any other company in the country).
  • Airbnb got a mention as a viable option for travelers to Omaha for Berkshire Hathaway’s annual meeting, which drew 39,000 people last year. I wonder just how much that mention is worth to Airbnb — and how many of Berkshire Hathaway’s shareholders were willing to use Airbnb before that subtle endorsement.
  • Berkshire Hathaway’s federal income tax return runs 24,100 pages. The company files an additional 3,400 state income tax returns. Even more impressive? Those documents are prepared by the Berkshire Hathaway office in Omaha, which has a staff of 25. The same 25 people are responsible for setting up an annual meeting for 39,000 attendees and a few other minor matters.
  • That huge stack of paperwork, however, would be far larger if all of Berkshire Hathaway’s subsidiaries operated independently. Buffett’s approach to running companies is as bare bones as possible. I expect that sort of lean leadership to be a major trend in years to come.

In honor of the 50th anniversary, Buffett wrote a more extended look at Berkshire Hathaway’s past then he normally does in these letters. He admitted a few crucial mistakes that he learned from, making this letter perhaps more valuable to read than most years. Berkshire Hathaway’s annual report from 1964 is also included at the end of this year’s.

If you’re an entrepreneur who hopes to grow your business beyond just covering your own expenses, read this year’s report — and maybe check into some of the past reports.

7 Tips For Creating A Productive Writing Workspace

I’ve talked to freelance writers who sit on their beds to write, take over the dining room table or head out to cafes. But I’ve always found it easier to work when I have my own little office area — even when it was just a desk wedged into my dorm room. Most of us don’t have an office area separate from our homes, but I have put together a list of ways to make your office space easier to work in.

  1. Keep everything at hand. When I’m working, I don’t want to get up for things like spare pens. If need be, I’ll cart along a bunch of office supplies,
    whether I’m going to a cafe or to the couch.
  2. File paperwork. There’s nothing wrong with keeping paperwork on your desk that you consult often. But if we’re talking about stuff like notes for a completed project, go ahead and file it. I have two very used filing cabinets that may actually be older than I am, but they work just fine. Shredding papers and getting rid of them is also a good option.
  3. Plan ahead for meetings. You may have clients who want to meet face-to-face. Decide from the outset if your clients are welcome in your home. There is no right or wrong answer to the question — and there are plenty of other options if you don’t want to hold meetings at home. I hold all my business meetings at Panera: free wireless and much better coffee than I could make.
  4. Light your office. I have a hard time working in dark surroundings, and it puts a strain on my eyes. When I’m looking at a workspace, lighting is a priority. Currently, I’ve got a couple of lamps with CF bulbs that completely meet my needs.
  5. Pick comfortable equipment. If you plan to be typing for hours a day, it’s in your best interest to sit in a comfortable chair. You might also want to look into ergonomic keyboards and other equipment, to help prevent issues like carpal tunnel syndrome.
  6. Create an inspiring environment. While completely changing the decor of your workspace may not be an option, consider personal touches which can make it easier to keep writing day after day. A good start is sound: I’ve got music going whenever I’m working. I’ve worked with one writer who needed nature sounds, and I’ve seen a designer who couldn’t produce without heavy metal pounding in the background. Other little touches that could liven up your workspace: plants, posters and pictures.
  7. Shut the door. I don’t think most freelance writers need to shut the door on their office 24-7, but (especially if you have regular interruptions) you need the ability to close people out occasionally and just work.

An office doesn’t have to be perfect — I’d call mine a work in progress. It doesn’t even have to be very large. But creating a workspace is making a commitment to your career as a freelance writer: it’s a way to say that you’re serious about getting your work done.

Are Freelancers Small Business Owners?

Day after day, I see opportunities targeting small business owners: chances for mentors, networking opportunities, chances to build business. I don’t necessarily recognize those opportunities as relevant to my work, though. It’s not necessarily that I can benefit from whatever is being offered — it’s that I just don’t think of myself as a small business owner.

The terms ‘freelancer’ and ‘small business owner’ should be synonymous, though. Freelance writers face similar issues in tax preparation, networking and generally earning money as any other small business owner, and we should take advantage of any help being offered. Think about these opportunities you might be able to qualify, as long as you bill yourself as a small business owner:

  • Loans for disaster relief (The Small Business Administration)
  • Mentoring from successful entrepreneurs (SCORE)
  • Networking with local businesses who can use your services (Your local Chamber of Commerce)

Recognizing ourselves as small business owners is another step in the direction of taking our work seriously. Many freelance writers seem to subconsciously consider their work a hobby: something they do in addition to a full-time job or staying at home with the kids.  But a business, especially one based at home, is a commitment. It will only grow and succeed if you take it seriously, and that translates to the fact that you will only reach your potential success as a freelancer if you are willing to work hard in the process.

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A Tip For Microsoft Word

I know most of the editors that I work with prefer to get articles emailed to them as Word documents. With a Word document, you can be sending along a lot more information than you might think.

Try checking the properties of the documents you have saved. Depending on what information you used to register the software, it’s possible that you’re sending out a lot of personal information that you may not want to. It’s also possible that you have some inappropriate information in those properties. For instance, I’ve seen .doc files with ‘Confidential’ in the properties, when the material truly wasn’t. And if you’re freelancing from a 9 to 5 job, your properties could include that company’s contact information, making your use of time a little less subtle.

You can fix these properties very easily, though. Under ‘File’, there is an option for ‘Properties’. It will only take a moment to either empty the fields or to correct them to appropriate information. It is also possible to change your settings so that Microsoft Word does not automatically save any information to properties, at least in recent versions.* Under ‘Tools’ on Windows or under ‘Word’ on Macintosh, select ‘Options’ or ‘Preferences’. A dialog box should pop up. Chose ‘Security’ and click the box for ‘Remove personal information from properties on save.’ And there you go!

*I believe that Word 2000 and previous versions don’t have this option, but I don’t have access to them, so I can’t be sure.

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