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MOGR: Learn the Skills of Deal Making and Negotiation
By Steve | March 21, 2008
A good deal makes you money. Good deal making and negotiation skills can make you rich. Deal making and negotiation skills are not just about ensuring you are the winner. A good deal is a deal wherein both parties – the seller and buyer – are happy with what they get and a long-term relationship is created.
In the book, One Red Paperclip: Or How an Ordinary Man Achieved His Dream with the Help of a Simple Office Supply, a story is told of a man, Kyle MacDonald, whose deal making skills are remarkable. He took advantage of Internet marketing via blogging to begin his barter trading. He barter-traded almost everything – from a red paper clip to a fish pen to a smiley-face door knob – and his deals culminated with a house in Kipling, Saskatchewan, all within a year, involving about 11 deals.
From Kyle, I learned the following mindsets:
- We all have something to trade and start with. He started with a paper clip!
- We need to be open to opportunities. In other words, we should always keep our minds open.
- We need to have clear objectives. Clarity is important for any successful venture or cause.
- We must take advantage of Free Publicity.
- We should network with people with the same hobby or cause that we are pursuing.
- And of course, we should work hard!
It also revealed in the book that he learned this valuable skill of bartering when he was young. As a child, he loved to play the childhood game called Bigger and Better, where he began looking for things to trade.
Evidently, he developed the important skills of deal making during those early years. This brought me back to another point I learned from Warren Buffet. During an interview, Warren revealed that he bought his first share at age 11, and a farm at age 14. These accomplishments are nothing short of mind-boggling. Indeed, how many of our children understand trading? Is it really possible to teach our kids the art of deal making and trading at a very young age?
These are the reasons why I have been putting a lot of effort in teaching my kids, who are now aged 13 and 11, the meaning of business and commerce.
Yes, it is never too early to teach your kids about commerce. Early training would give them the mindsets that would serve them well in their adulthood. Our schools systems (especially in Singapore) DO NOT teach this kind of valuable business mindsets to our kids. Instead, most curricula are centred on equipping them for a ‘good, high-paying job’ in the future.
When you are swapping, selling, or ironing out any deal, you need to know about the art of negotiation. Basically, the art of negotiation is about making the other person feel he is getting as much as you are.
If fact, I am currently in the process of negotiating with my entrepreneur-employer about giving shares of the company if I can bring in capital from my affluent friends who are looking for reliable companies to invest in. They (the company founder and the investors) get what they want, and I get what I want; i.e., to partly own a company without capital outlay and potentially be rich with it. Surely, this is a win-win-win situation for everyone.
Here are 10 points I learned from my 18 years in business development, sales, and marketing:
1. Know your bottom line
2. Know what you want
3. Always aim for a win-win situation
4. Be prepared to give up things in order to secure other things that are more important to you
5. Know as much as possible before you start. In the words of Sun Tzu, ‘If you know your enemy and you know yourself, you will not be imperiled in one hundred battles.’
6. Negotiate successfully for everything you want in the beginning. You cannot negotiate again later when the contract is signed; this will be detrimental to your reputation.
7. Try not to make a concession if possible. If this is unavoidable, you should always get something in return.
8. Create more value.
9. Go for the highest values because it is easier to go down rather than up.
10. Bring things out in the open and encourage potential partners to lay their cards on the table as well. Assumptions are not good.
You have to learn how to be bold enough to ask for what you want and to trade what you have with what you want. These are two of the most important mindsets in getting rich.
Topics: Category00: Mindsets of Getting Rich - MOGR |