The difference between a good business and a great one is that a great one makes it hard to compete against it. A good one merely makes it hard to make money. The best business is one where you can keep repricing upward without losing customers—that's when you know you own something real.
Consumers, conditioned by heavy promotion and by habit, did not bolt even as prices of some of their favorite soaps and cereals increased by 5% or 8% a year. And so profits increased much faster than that. Heinz's earnings climbed by an average of 13% a year during the past decade, Clorox's by 15%. Their shareholders and owners reaped a treasure.
Consumers, conditioned by heavy promotion and by habit, did not bolt even as prices of some of their favorite soaps and cereals increased by 5% or 8% a year. And so profits increased much faster than that. Heinz's earnings climbed by an average of 13% a year during the past decade, Clorox's by 15%.
2mo ago
The best business is one where you can raise prices without losing customers. The second-best business is one where you can raise prices and gain customers.
3mo ago
The best business to be in is one where you can raise prices without losing customers, and yet few businesses qualify. Most businesses are competitive enough that if they raise prices, they lose significant volume.
3mo ago
Underscored — save the words that stop you in your tracks.
