Five Rules For Success In Deal Making by Michael Craig
For over twenty years, I've become involved with the money, strategy, risks and personalities involved in deal making. I've found that certain people and certain methods usually won, while certain strategies usually lost.
Through these negotiations, I've identified the following five basic rules that substantially shape the success of a deal:
Rule 1: Focus on your strengths. Concentrate on what you do best. The winner of a deal usually has a well-thought out plan and understands the subject of the deal, while the loser usually strays into an unfamiliar area.
Rule 2: Find value where others don't see it. You can benefit by discovering something first. But be a good judge of value so you don't get stuck.
Rule 3: Don't get caught up in the wanting. Don't convince yourself you have to have something. If you want something too much, you're likely to pay too much to get it. A Dealmaker's greatest weapon is the ability to say "no" and be in control. If a seller recognizes that you want something too badly, you can become easy prey. This trap of excess desire contributed to many of the business collapses in the late 1980s.
Rule 4: Be innovative to make a successful deal. If you use innovative methods you can find ways to profit where others can't. By using innovation in financing or selling, you can discover value or make a hidden value accessible.
Rule 5: Be aggressive. While being friendly can be helpful at times during the process, it's in closing a deal, that it pays to be firm and in control (the ability to "walk away" without being weak is powerful medicine). If you feel something is worth negotiating for, it's worthwhile to get all that you can.
Adapted from The 50 Best (and Worst) Business Deals of All Time by Michael Craig (Career Press). Michael Craig has worked as a lawyer and spent 15 years as a litigator in cases involving business deals.
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