Why Warren Buffett considers the deal he made with an 89-year-old woman one of the best of his career

Every year, undergraduate students from 40 universities compete for a trip to Omaha to spend a day with Warren Buffett.

The annual tradition always begins at Nebraska Furniture Mart (NFM), which Buffett acquired from the late Rose "Mrs. B" Blumkin in 1983 for his conglomerate Berkshire Hathaway.

Blumkin immigrated to the US in her early 20s from Russia and founded NFM in 1937 with a $500 loan from her brother and money she had saved from selling used clothing with her husband, who died in 1950.

Today, her store is worth around $1 billion, which is immaterial among Berkshire Hathaway's assets but worth a priceless amount of inspiration. Buffett brings students to Blumkin's store to show what can result from sheer will and hard work.

"Aspiring business managers should look hard at the plain, but rare, attributes that produced Mrs. B's incredible success," Buffett wrote in his 2013 letter to Berkshire Hathaway shareholders. "If they absorb Mrs. B's lessons, they need none from me."

Blumkin was born into a poor Jewish village near Minsk in 1893 and began working at the age of six, becoming a store manager at 16, the New York Times reported.

After making her way to Omaha and opening NFM while her husband ran his secondhand clothing business, Blumkin began putting in seven-day, 70-hour workweeks and incorporated her son and grandchildren into the company as time passed.

She distinguished herself with customers by selling products at prices much lower than her competitors, and when this approach made her store increasingly popular, her bigger competitors in Omaha convinced furniture manufacturers to boycott selling to her. In response, she bought from suppliers elsewhere across the country and continued to sell at the cheap prices she wanted.

By the time she made it onto Buffett's radar in the early '80s, Nebraska Furniture Mart was the biggest furniture retailer in the US.

As she told NBC News not long after making the deal with Buffett, in broken English: "I'm the best operator - not that I'm bragging - in the country with common sense. I don't know education, books, percentage. I used the old-fashioned way!"

Blumkin agreed to make a deal with Buffett at the age of 89 because, she figured, if she sold the company before she died, then her children wouldn't fight over it.

In his shareholders' letter, Buffett remembers going to see Blumkin on his birthday, August 30, 1983, with a purchase proposal just over a page. He didn't audit her company, but he trusted her intuition.

"Mrs. B accepted my offer without changing a word, and we completed the deal without the involvement of investment bankers or lawyers (an experience that can only be described as heavenly)," he writes.

Her family continued to manage the company, and she would continue to put in long hours at the store despite her age, zipping around on an electric scooter, pitching furniture to customers.

As the Times reported, her family essentially forced her into retirement at the age of 95, but it only took three months before she set up a rival store across the street from NFM, Mrs. B's Clearance and Factory Outlet. By 1991, it had become the third largest carpet outlet in the state.

Buffett helped repair the family rift the next year and absorbed Blumkin's venture into NFM. He joked that he should have added a non-compete clause to the contract after he bought her company.

Mrs. B died at age 104, and her legacy is still very much part of her family's business, which has opened locations in Iowa, Kansas, and Texas.

Buffett has previously told reporters that he would have rather done business with Blumkin over any highly pedigreed MBA in the country. He recently compared her to the late Walmart founder Sam Walton at an Ivey Business School Panel:

One thing that Sam Walton and Mrs. B had in common is they had passion for the business. It isn't about the money, at all.

It was about winning. Passion counts enormously; you have to really be doing it because you love the results, rather than the money.

When we buy businesses, we are looking for people that will not lose an ounce of passion for the business even after their business is sold.

After all, he said, doing business with someone who is driven by beating the competition by creating a superior company rather than simply finding ways to build a war chest "is what it's all about."