Warren Buffett, the esteemed billionaire investor and head of Berkshire Hathaway Inc., once made a strategic acquisition that underscores the value of entrepreneurial spirit and shrewd business acumen. In 1983, Buffett purchased 90% of Nebraska Furniture Mart (NFM), a company started with a $500 investment, for approximately $60 million. The founder of NFM, Rose “Mrs. B” Blumkin, demonstrated extraordinary capability in growing her business from humble beginnings to a national leader in the home furnishings industry.
Blumkin’s journey from a small village near Minsk, Belarus, to the pinnacle of American retail is both inspiring and instructive. Arriving in the United States without money, formal education or the ability to speak English, she showcased determination and business savvy. “Never went to school a day in her life,” Buffett said during a 2019 interview with CNBC’s “Squawk Box.”
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By 1937, at the age of 43, Blumkin founded NFM in the basement of her husband’s shop in downtown Omaha, Nebraska, turning a $500 investment into the largest home furnishings store in the country.
Buffett, who has a keen eye for exceptional businesses, described Blumkin’s competitive edge with admiration, stating she would “run rings around” top business school graduates and Fortune 500 CEOs if given the same resources, according to a New York Times article announcing her death at 104 years old.
His decision to acquire NFM was based not on traditional business due diligence but on his confidence in Blumkin’s leadership and the company’s solid business model. The deal was sealed with a handshake and a simple 1¼-page contract.
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Even after the acquisition, Blumkin continued to influence the retail industry, working at NFM until she was 103 years old. Her decision to open a rival store after a brief retirement at 95 demonstrates her drive and commitment to her customers. Buffett noted the need for a noncompete agreement to prevent her from venturing into new business pursuits, highlighting the deep respect and admiration he held for her.
NFM is a testament to Blumkin’s legacy generating approximately $1.6 billion in sales and more than $80 million in after-tax profits, according to estimates in “The Deals of Warren Buffett Volume 2: The Making of a Billionaire” in 2019. Buffett has repeatedly pointed to Blumkin’s story as a source of inspiration for aspiring business managers and entrepreneurs, emphasizing the power of determination, integrity and customer focus.
The story of Blumkin and Nebraska Furniture Mart not only showcases Buffett’s strategic investment philosophy but also celebrates the extraordinary journey of a woman who defied the odds to build a thriving business empire. Her story, intertwined with Buffett’s investment prowess, offers invaluable lessons on the essence of American entrepreneurship and the potential for success against all odds.
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This article Warren Buffett Purchased A Business For $60 Million That Was Started With Just A $500 Investment — The Founder ‘Never Went To School A Day In Her Life’ And Barely Spoke English, But Buffett Says She Would ‘Run Rings Around’ Top Executives And CEOs originally appeared on Benzinga.com
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