Deal Making - The Art Of The Deal · Deal"Making"–"The"Art"Of"The"Deal"3" Table Of Contents 1 Getting Rich: Your First Lesson 4 2 Basics: Mind, Matter And Symbolism 6 3 Are You

David Abingdon

Deal Making

2 Deal Making – The Art Of The Deal

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Deal Making – The Art Of The Deal 3

Table Of Contents

1 Getting Rich: Your First Lesson 4

2 Basics: Mind, Matter And Symbolism 6

3 Are You Worthy Of Wealth? 8

4 Poverty Is A State Of Mind 9

5 Prosperity Is A State Of Mind Too 10

6 Now, Let’s Get Practical 11

7 Deal Making 12

8 The Art Of Making The Deal 14


Getting Rich: Your First Lesson It’s an almost daily frustrating reality for millions of people. They look around our society and they see that some people, seemingly a select few, are extremely wealthy, or at least have all the money they need. Then they look at their own lives and observe what seems to be a never-‐ending struggle just for basic cash. There’s never enough of it.

Furthermore, when the “average person” does manage to make a little money, it seems to slip right back out of their lives again.

Sound familiar?

It almost appears the game is rigged somehow. A few people can touch anything and turn it into gold, while the vast majority try to make money and fail, or just make enough to get by day to day.

What are the secrets to achieving wealth? Is there a secret at all? Many people firmly believe that the rich are either “smart” or “lucky” – a combination thereof – or that they were just born into a wealthy family.

But the hard data shows this is not the case. In the United States, for example, there are 2,900,000 millionaires, according to U.S. Dept. of Commerce statistics. And of those almost 3 million millionaires, 81% of them can be considered to be solidly self-‐made. They did not inherit the money or win it in a lottery. They started either poor or middle class, and worked their way to that (seemingly) exclusive Club of Millionaires.

The situation is the same in other countries as well. One might think a country such as the United Kingdom, which has a much deeper history of an established, well-‐defined aristocracy, has millionaires mostly born that way. But that’s not the reality – like in America – more than 80% of British millionaires today came from poor or middle class background and earned their way to their millionaire status.

Craig Phillips, principal of CoreData Research UK, said in a June 2012 article in British newspaper The Telegraph:

“The number of millionaires is partly a reflection of the economic opportunity that exists in modern Britain and should allow others to seize their own chance to grow a business, be successful and boost economic growth.”

He added:


"However, many of Britain's modern-‐day wealthy are self-‐made and have become so through creating and running successful businesses, which bodes well for the economic health of the nation.”

Other data shows that more than exactly a third of British self-‐made millionaires – 33% -‐-‐ got there by way of self-‐employed business and entrepreneurship activity. (A nonbusiness example, by the way, might be any hard-‐working person or employee who saves his or her cash and invests well, and gets rich that way, and so forth).

We could go down the list of developed countries, from Australia and New Zealand, to Canada and Germany, to look at who is rich and why. But all the data shows more or less the same thing. Most people are not born rich. They find a way to get rich.

So the first lesson of getting rich is to know the facts – the fact that getting rich is not about luck or privilege in the vast majority of the cases. Most millionaires today did it by bootstrapping themselves from humble means to wealthy lifestyles– that means you can too. You need to understand this and believe it – because it is true.


Basics: Mind, Matter And Symbolism What we are going to talk briefly about right now may seem a tad fundamental, but it’s important. One of the reasons that many people think getting rich is not something they can achieve is because they have a basic wrong-‐headed view on just what money and wealth really is.

A $100 bill, €100 or a £50 note in your hand is lovely to behold. A stack of them warming your wallet is a nice feeling. But these notes have no value in and of themselves. They’re just paper. You can’t eat this stuff. If you were cold a desperate, a large pile of pounds, euros or dollars might produce a bit of heat for a few minutes, but then you would soon be cooling off again.

Paper money, coins – and sheets of stock or numbers glowing on a computer – are only symbols of wealth. Real wealth is what these items represent. You take bills of currency to a grocery store to exchange them for some food to nourish your body. Food: That’s real wealth.

Think of all the things symbolic forms of wealth – coins, paper notes, plastic credit cards – can get for you. Heat for your home, medical care, transportation. These are the things you really want and need! When you have them in abundance, you are wealthy! The symbol of money is only a means to an end. So what you really want is not money, but what the money will get for you.

Real wealth comes from Mother Nature – coal, oil, food, minerals, metals, wood. It also comes from the mind of human beings – knowledge. For example, the information inside a doctor’s head is almost beyond monetary value. The knowledge of a good car mechanic is also a lifetime source of wealth generation. What many doctors and mechanics (or any skilled worker) does not understand is that their hard-‐earned knowledge can be leveraged and enhanced to produce even more wealth. (We’ll come back to this point later in this report).

If you want to produce real wealth and gain real wealth, you must be cognisant of what real wealth is. It’s not notes and plastic cards – its stuff. It’s also the valuable knowledge in your mind. The latter may be even more powerful than the first – keep reading.

We remind you of this because to gain wealth, you must maintain a sharply defined knowing of the difference between real wealth and symbolic wealth. We’re not saying there is anything wrong with gaining wealth by “playing” only with symbolic forms of wealth – such as trading on the stock market. This symbolic activity serves a real purpose. But you must stay grounded in reality and understand wealth at the core of its existence.


To get rich, it’s okay to project your head into the clouds, chase your dreams and reach for the stars -‐-‐ as long as your feet remain firmly planted on the ground. You need both… Creativity and practicality.


Are You Worthy Of Wealth? Too many people believe they don’t deserve to be rich, even though they want to be rich. It’s strange, but that’s the way human beings are. We are complex psychological creatures easily confused. Two questions are important:

1. Do you believe you deserve to be rich? 2. Do you believe you have the ability to get rich?

Why would anyone feel unworthy of being rich? That’s easy – because many sources in society focus and endlessly repeat messages upon on that tell us being poor is basically a sign of humility, purity and goodness, while being wealthy is a sign of being greedy, predatory and corrupt.

We are not going to go into the highly emotionally charged sources of these messages we receive from society every day about what it means to be rich or poor. We only want to tell you that you must come to a point in your mind where you resolve this question completely within your own psyche.

You must be able to look in the mirror and tell yourself, “Yes!” to question No. 1 – that you genuinely deserve to be rich – and that it is a good and proper thing to be rich. Getting rich and being rich does not mean you have to be greedy or aggressive, or screw the other people out of their money. It does not mean you are violating some kind of religious or moral precept. Whatever it takes, you must come to a position of complete clarity on this issue.

As for question No. 2, do you have the ability to get rich? Do you believe you have what it takes to generate large amounts of wealth? We have already answered this question for you, at least in part. We have demonstrated to you that the vast majority of millionaires today are self-‐made millionaires.

We will tell you further that studies show that most of these self-‐made millionaires are probably no smarter than you are. We know that because many studies have been done which have examined the backgrounds of self-‐made millionaires. Just about all of them are (or once were) “average people.” That is, they pulled Cs and Bs in school. Many of them never went to university or had limited higher education. They are common sense types with streets smart attitudes – but most of all:

They felt they deserved to be rich

And

They believed in themselves.

They believed they could get rich if they tried hard enough.


Poverty Is A State Of Mind

It’s generally not lack of resources, lack of support or lack of anything material that keeps people mired in poverty or middle class mediocrity. It’s your state of mind that does the trick on keeping you down. You are in the habit of “thinking poor.”

Having “Poverty Mind” is a learned condition. You learn it from your parents, from the media and from society. It gets reinforced in your mind practically daily. Adolph Hitler’s propaganda minister Joseph Goebbels said: “A lie repeated often enough becomes the truth.”

Poverty Mind is also the result of low self-‐esteem and a tendency to think negatively and make excuses for one’s failures. Again, this is all learned habit. Thought processes centered on lack and scarcity have an almost magical way of bringing that into your life. This is not just more New Age nonsense – its demonstrated fact.


Prosperity Is A State Of Mind Too

If your mind can convince yourself that you are destined to be poor, why can’t it do just the opposite? Think about it. Why couldn’t it? You can’t attribute one ability to mind, but then deny the power of that same mind to foster the opposite ability.

The late multimillionaire businessman and movie mogul Mike Todd once said:

“I’ve never been poor, only broke. Being poor is a frame of mind. Being broke is only a temporary situation.”

Prosperity thinking is a positive thinking habit that constantly reinforces the idea in your mind that you can gain wealth, that you deserve to be wealthy, and what you have to do is go out there and get it, and make it happen. These thoughts have to be persistent. Again, anything that is repeated often enough in your mind becomes “reality” in your mind.

So it is essential to change your programming right from the beginning. Thinking rich is only half the equation – you also need practical tactics, diligent work, hard work (but work that is fun and exciting) and excellent strategies to achieve your goals.

Speaking of goals – you must not only have them, but they must be sharply defined. You need a solid target you can see so that you can aim for it clearly, take your best shot and come as close to a bull’s-‐eye as possible.


Now, Let’s Get Practical We’ll have more to say on rich-‐thinking and poor-‐thinking mentality a little later on, but right now we want to delve into the practical. Entire books can be written (and have been written) about wealth generating strategies, but to bring a powerful focus to this document, we want to zero in on one of the central elements of wealth generation. It’s the art of making a deal.


Deal Making Think of that old saying: Two heads are better than one. Throughout history it can be shown that real wealth is created when people get together, cooperate, and work to their mutual advantage. One person working alone has a tough time wearing all hats, doing it all.

Certainly, many people start out on their own, work by themselves and succeed. For example, many business models are called sole proprietorships. It’s a one-‐man or one woman show. Even if that sole proprietorship operation has employees, the real wealth-‐generated heart at the business is the guy or gal in charge.

But experience clearly shows that when a catalyst is added to a sole proprietorship -‐-‐ meaning this business teams up with another to cooperate on finding customers, booting sales, joint marketing, sharing of specific tasks or work regimes – the result is a rapid increase in the ability of both to make more money faster.

Think of the word synergy. It is defined thusly: The interaction of elements that when combined produce a total effect that is greater than the sum of the individual efforts.

It’s probably not a bad idea for every entrepreneur to write down or print out that definition and post it prominently on a wall in the workplace.

One of the most well understood methods of entering into cooperation with others within the business world is the joint venture. This is when two separate, usually non-‐competing business entities team up to cooperate in a way that will help both make money. A joint venture can be extremely simple and basic, or highly complex.

A simple example of a joint venture between two small business models might be something like this:

A used car dealer wants to attract more car shoppers to his lot. He decides to offer a free steak dinner to anyone who will come in and take a test drive of a car.

A restaurant in the same town as the car dealer is eager to bolster customer traffic, too. So the owner of the used car business gets together with the restaurant owner. The car dealer asks for a coupon that is good for “One free steak dinner” so that he can hand them out to prospects who come in for a test drive. He asks the restaurant owner for a discount on buying say, 100 steak dinners represented by the free coupon.

The restaurant owner might agree to offer a steak dinner coupons at say, a break-‐even price, or even below cost. It would be worth it for the restaurant owner to take a slight monetary lost because of the benefit of all the promotion the joint venture will produce.

For example, when the car dealer advertises his “free steak” test drive deal, he may buy ads in the local media saying he’s giving away free steak dinners at So-‐and-‐So Steak House. The


eatery gets tons of media exposure. It gets the customers who get the free dinner. Once the customer is in the door for the dinner, the restaurant owner can upsell them on deserts, beverages, and so on, and still make a profit despite the break-‐even deal on the meal. Best of all, they have had a chance to create new customers who will come back again if the food and service was terrific.

It’s a win-‐win situation. The car dealer will have more shots at more prospects to sell them cars. With a single sale of a car, the free-‐steak campaign could easily pay for itself.

It all starts with a deal – and more importantly – the willingness to enter into synergistic deal making behaviours with other entrepreneurs. Amazingly, many business folks are sceptical or hesitant of making even simple joint venture deals because they tend to see all the drawbacks and not the possibilities.

The most successful entrepreneurs are not only highly persuasive in use of their selling skills vis-‐à-‐vis their customers – but in selling potential joint venture partners on a deal that could benefit both of them.

Now, as we said, the example above is a simple, direct, yet powerful way to enter in a joint venture deal. But when you look around, you’ll see joint venture deals thriving throughout the business world, and across many models.

Take affiliate marketing on the Internet, for example. One of the world’s most successful corporations, Amazon.com, would have to be considered a supreme example of a kind of organization that has joint venturing at the heart of just about everything it does. A prime example is its affiliate program, which anyone can take advantage of.

In brief: You establish a blog or web site. You sign up at Amazon.com to become an affiliate trading partner. It takes literally just minutes. Once you have established your affiliate link with Amazon, you start placing advertising modules on your web site. When your blog visitor clicks on one, they are taken to the product on the Amazon site. If they buy it, Amazon pays you an instant commission on the sale.

Think about how brilliant this is on behalf of Amazon. Today, literally millions of Internet users affiliate market using the Amazon.com platform. In effect, Amazon has created a virtual world-‐wide sales force army. People are using their own websites to send millions of sales to Amazon – and they are benefiting by earning commissions on sales.

That, my friends, is synergy!

Synergy begins with an idea, and the ability of the entrepreneur to find a partner and make a deal.


The Art Of Making The Deal Joint ventures are just one example of where powerful deal-‐making skills serve the entrepreneur well. Think about all the other occasions in which the businessman or woman will be confronted with making the best deal possible for themselves. Some examples:

• You have established a successful profitable business, and now you want to cash in by selling the operation to another party. This is a chance to make an enormous amount of money. You’re selling all the hard work, resources, inventory, sweat equity and intellectual knowledge you poured into your enterprise. Now you need to make an excellent deal to come away with a huge windfall.

• The opposite – you want to buy a business, or buy into a business. You want to pay as little as possible to get in, and make maximum profits once you become owner. A bad deal could saddle you with too much debt or other disadvantages. You need to make a stellar deal.

• You decide to start franchising your operation. You need to put together a compelling, convincing can’t-‐resist deal that will make hundreds of others eager to buy into your franchise. Your ability to fashion a terrific deal will not only get you franchise partners, but maximize your profits at the point of each transaction.

• You want a great deal on a load of inventory you desperately need. You need to make a deal with a supplier.

• You are seeking an angel investor to come in with a pile of financing to cash-‐flow the next expansion of your business model. How do you convince wealthy-‐yet-‐sceptical investors to risk their money on you?

We could go on, but you get the point. So much in business depends on your ability to persuade and convince – it’s the art of making a deal. Let’s take a look at our Seven Top Deal Making Power Points:

One: Before you talk to anyone, define exactly what you want, and the kind of deal you must have – and what the other guy needs.

• When you know what you must have going in, you have clarity. You have a specific goal or target to hit while you negotiate and bargain. Write down your “must have” points before you enter a negotiation – and stick to it. Yes, in any negotiation, there is give and take. You may have to sacrifice an item or two on you “must have” list to get what is still a beneficial deal. However, if you also have a clear understanding of the needs of the other, you will better be able to stick to your own guns while convincing your potential partner he or she will get what they need. Be specific in all regards, including money specific amounts, numbers of items, what is being offered, what is being given, etc.


Two: Patience is a Virtue

• If the other person is in a hurry, and you are not – you have a tremendous advantage. And so the opposite is also true. The more urgent your need and the greater your deadline pressure, the more likely it is that you will enter into a deal too quickly, and not fully to your advantage. So place yourself in situation where you can take your time, and yes, make the other guy do the sweating. With patience and by not being overly-‐eager, you can negotiate from a position of strength.

Three: Clearly Understand Your “No-‐Go” Position

• You must clearly understand what your own absolute limits are. Think of the way people get carried away at auctions. As the bidding gets fired up, a person may suddenly find themselves offering a price well-‐beyond what they originally intended to pay. You must have a walk-‐away position – that point where the deal simply is not worth it for you. No deal is better than a bad deal.

Four: Try to go into or seek only win-‐win situations

• Remember that every human being on the planet is in a constant state of asking themselves; “What’s in it for me?” Go back to the example of the car dealer and the restaurant owner in our joint venture deal. There was clearly something in the situation for both. When you enter a win-‐win situation, the art of deal making can be smooth indeed. But when either party is entering a situation where pitfalls are rife, and disadvantages many, making a deal gets astronomically more difficult. Certainly, in the real world not all situations are win-‐win. Sometimes you will want to leverage a major advantage over a partner. But you must know that for anyone to take a hit for your benefit is going to be a tough sell. It doesn’t hurt to try – but in the latter situation, you’ll need all your silver-‐tongued skills in full measure.

Five: The Art of Compromise

• It almost seems contradictory to suggest that you should be willing to compromise in a negotiation. Didn’t we just tell you to make a list of your “must haves” and stick to them? Well, yes, but sometimes a slightly less than perfect deal can be better than no deal at all. Your bottom line should be: Will I make a profit if I enter into this deal? Let’s face it, compromise is reality. An entrepreneur who thinks he or she can enter any situation and act the all-‐powerful dictator is really not an entrepreneur at all. The idea is to compromise intelligently. It doesn’t mean you give away the store – it simply means you bend where you can to get the deal that still moves your overall effort forward.


Six: Walk Away But Leave the Door Open

• As we said, you must always be willing to simply walk away from a deal that simple is not getting you want you need to have. You’ve tried compromising and giving a little, but the other side is playing the super-‐tough negotiator role. Let them. Then walk away if and when they won’t budge – but leave the door open. Tell your negotiating partner that you simply cannot accept the terms they are offering, but that you are still willing and eager to business with them – and please call again in the future if they will think it over and meet Points A, B and C of your demands. You’ll be surprised at how a “cooling off’ period can change perspectives!

Seven: There’s a Million Opportunities

• Always remember that the ocean is full of fish. If a deal with a prospective partner falls through, spend an afternoon crying about it – then immediately start seeking another partner who can give you the same kind of deal you’re looking for. In almost any situation, there is never just “one perfect partner” for what you need to accomplish. You must be able to see the possibilities and look at things in creative ways. Sometimes that means looking at another entity you may not have considered before. Keeping fishing and you’ll eventually net just the deal you need.

Learn More about becoming a Deal Maker and Business Consultant… Free Information and video at: http://www.alchemynet.net/dealmaking-webinar


Documents

Deal Making - The Art Of The Deal · Deal"Making"–"The"Art"Of"The"Deal"3" Table Of Contents 1 Getting Rich: Your First Lesson 4 2 Basics: Mind, Matter And Symbolism 6 3 Are You