Warren Buffett loves reading annual reports. He looks at a company’s business model in detail. He applies a simple and straight forward approach. In many ways, Buffett acts like a super business angel. His methods have been proven right in the long term. Entrepreneurs can learn a lot from Buffett’s investment strategy. The difference is, that instead of reading reports and doing research on the company, entrepreneurs are at the forge and are writing the annual reports by their actions.

There are many distractions that all too many times lead entrepreneurs down the path of failure. It’s important to have one eye on the money engine at all times. The trap of “high-tech escapism” is very easy to fall into.

Having a clear understanding of what fundamentally makes a good company is invaluable for entrepreneurs. It’s the framework on which you hang your core business strategy. It’s the compass point that will get you to your destination. Once you have this established in relation to your business everything must focus towards it.

Ultimately, three common sense questions sum this up.

1) How much will the business make?

2) How much will it cost to run the business?

3) Will your income stream and cost structure be sustainable into the future?

As an entrepreneur your goals and ambitions set the criteria for your business. How much do you want to make? How hard do you want to work?

Now what you are looking for is a convergence of what makes sense for you to start a business and what a potential investor is looking for.If your criteria meets their criteria then you have a real chance of making a deal. However, if you don’t focus on the money engine from day one it’s very unlikely that your start-up will be positioned for investment to scale.

A vast majority of investors are looking for historical data that indicates future potential. You must get this traction. The higher up the traction ladder you are the better chance you have of getting investment.

There is plenty of information on Warren Buffett’s investment strategy. Try and build a business that Warren would invest in and I’m sure you won’t have any problem finding others who will believe in you.