Dealmaking Is Slow then Fast

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I love dealmaking. I agree with Robert Ringer’s observation about dealmaking:

“There are no statistics to prove it, but after years of experience, I’m absolutely convinced that dealmaking is the highest-paid profession in the world.”

I think the creative pieces and bringing ambiguous, and often disparate parties and value together, is exhilarating. Great deals help everyone to win and get what they want.

Designing those deals requires insight and many cycles to drive a win and agreement. It’s why I often tell business partners that dealmaking is about going slow. Then fast.

The slow part of deal making is the art of the deal. Building rapport and relationships. Establishing trust. Putting the ideas forth that might take root. These are the building blocks that go faster with established relationships and much activity, but in the beginning of new ventures and relationships, they are slow to put forth and germinate. Often times, you have to push hard.

Fortunately, deals are everywhere. They need leadership, vision and management to develop. If you sell a known product, then your dealmaking has a lot of the components already set up.

If you have a custom, creative dealmaking offering, then there is a lot of time collaborating, designing and creating something from nothing.

I think that one of the best strategies is to be ready. Mise en Place. Anticipate that new conversations, opportunities, relationships and timing will come in the next weeks and months. Being ready by doing your homework, studying, gathering insights, having fast, efficient systems, and getting smarter are required to support the slow part.

If you have done the work then the fast part tends to take care of itself. The convergence of the details, negotiating, having solid agreements and delivering value transitions the dealmaking over to keeping your commitments.

You can always get better at the fast part. The slow part is where the payoff is if you pay attention to your approach, preparation and cadence. Where can you improve?

Find the Few and Disregard the Many

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A few projects matter. So do a few relationships and a few tools. It’s so easy to simply accumulate stuff and throw horsepower into everything. While thinking that should cover over any deficiencies, what is often hidden is the cost in the form of waste, unclarity and management overhead.

We don’t have unlimited attention, resources or energy. It’s hard enough to make something work well or achieve success. However, more noise will only add drag to your best intentions and efforts.

Think about how you want to do business and consider inverting your model. What if you chose to focus on the few that matter rather than the many that have diminishing returns? Your process can look something like this:

  1. 10 clients – The absolute number I want to work with at one time.
  2. 20 deals – Because I close half and only 20 matter.
  3. 40 prospects – People I would be happy to work with and that are an ideal fit.
  4. 2 channels – Places that my prospects I like hang out. Strategies I am committed to fully and will refine.

This kind of strategy can work, but you have to be thinking about what you want and focusing your conversations and approach to the few that matter. In a way, it is a form of abundance thinking. You are realizing there are specific, valuable people you want to work with in a vast world and you simply need to connect and get clear with them.

As a side effect, you are avoiding creating a lot of waste, irritation and noise out there for people that are not a fit.

You also ask better questions of yourself:

Who are the 10 people I want to have as friends and spend my time with doing business?

What do the few people I work with have in common?

What don’t I like?

I bet you find yourself more relaxed and easier to work with. I bet you find abundance by focusing on the few. Clarity and focus have a way of bringing that kind of increase and efficiency.

Can This Person Say Yes?

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There’s a world of opportunity out there for what you are pursuing. But one piece of clarity that gets overlooked too often is qualification. Most people you meet cannot say, “Yes,” to what you are offering. However, a few people can.

I’m not sure why we have this block, but the clearer you can get on who you know can say, “Yes,” the more fun you can have doing business.

Thinking everyone is a prospect is discouraging, costly and wasteful. You can leave relational carnage in your wake. Maybe, it’s hard to feel that fact. Pitching everyone is like spamming, but you don’t feel the cost necessarily.

When you are clear about who can say, “Yes,” you can enjoy the relationships in front of you for what they are – people to enjoy or avoid. You can relax. You can create goodwill and focus on others more than simply what you are trying to sell.

And for the people that can say, “Yes,” you are simply helping them become aware of something they need. They are the ones your firm has been built to serve. You have to put yourself in front of them in order to help them.

Ask the question clearly if you seem to push too hard, “Can this person say, ‘Yes?'” If they cannot, then keep finding people that can.

Secondly, get clear on who does say, “Yes,” that you can bring immense value to.

This is abundance thinking. The world is your oyster and you can go out building amazing relationships with the right people as well as avoid perturbing people that don’t even have a shot at saying, “Yes.”

Who says, “Yes,” to what you offer?

Design the Customer Journey

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Yes, I understand you want money. You want people to buy now. The temptation to simply expect and demand cash is so high and blinding that it’s hard for a seller to see why money becomes elusive.

In some cases when the pain is high – root canals, broken transmissions, fallen bridges – the customer goes straight to the answer. They want the full offering because the pain and the cure are clear and needed.

What about cosmetic dental work, upgrading to a Tesla or improving infrastructure for growing populations?

The sale is a bit harder. The pain is low. Your customer’s status quo is fine. And your offering feels like a big commitment. It can be delayed.

Is there a lesser first step you can start with to stir the customer’s thinking? A test drive or a new mirror can get a person thinking about something they haven’t entertained.

There’s the beginning seed.

You have to gain interest, attention and trust at the start. This is hard in a crowded, overwhelming marketplace. This feels daunting when everyone can get what they want with their thumbs and iPhone.

That starting point, not your final sale, is where you have to dig, design and consistently offer yourself. I bet your customer journey could have a bit more courtship involved. I bet you could start and build trust with a few touches that lead your customer through smaller, more comfortable steps.

Yes, you can sell more. But you have to care more first. And that means stepping back and walking that emotional journey your customer feels. You can design the journey and help them towards a bigger yes, the one you want. Caring about where they are at and how they proceed to trust you means going slower so you can go faster.

What’s easy for your customer to say yes to first? How about second?

How could you design the steps with care that lead them to what they eventually need from you?

Be Personal in Networking But Don’t Take Things Personally

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How much value do you add? That’s the key question I ask each day when I am out in the world of business. It may not be a perfect question, but the free market is open. People are free to make decisions on their own on what they value.

You are valuable when you can connect, articulate and deliver value to another person.

You can’t insist.

You can’t force people to do what you want.

You can’t whine and hope others will pacify you.

We have choices and we tend to choose in our self-interest.

The great thing is that every day your customers spend money and look for value.

That’s why in your networking, you have to keep tilting the odds in your favor by being helpful and clear in what you are offering. It’s about being personal but not taking responses personally if they don’t go your way.

Consider Mark Ford’s tips on networking:

Gain interest first, earn trust later.

Always be specific and sincere in your praise.

Don’t expect to receive an answer to every note you write.

Ask questions.

Be grateful for answers.

Suggest business only when your target person is ready.

Business is people. And the business of people relies on you being valuable out there and networking in a way that is consistent, clear and respectful.

Every day I am looking for those that would truly add value to my life. Hopefully, we connect in a way that makes life better because we met.

Instead of Complaining Become Better

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One of the sobering and honest parts about the marketplace is that you might try any philosophy or approach you like, but it may not work. Your great intention does not necessarily mean that others have to go along.

That can be quite a shocking realization for a generation that may have been given and expected anything and everything. Perhaps a silver spoon makes some believe everything is done for them without cost or consequence.

Others might even have a world-class invention they believe everyone in the world must have.

Entitlement, passion and conviction are powerful tools of persuasion. But, in the end, noone has to do anything with you or for you. You can’t make someone buy, cooperate or work with you.

The marketplace, because of the availability of options and choice, places the burden on you as a seller to be convincing and attractive.

Forget complaining, insisting or appealing. Put all that energy into being better. If your calls are not being returned, how about thinking of what can make someone want to call you back? What’s going on in their world and how can you be worth their time and attention? Again, be better.

We are all needing better ideas, strategies and ways to improve our businesses. There is no shortage of this need.

How about spending a bit of time seeing how you can meet all those unspoken, continuous needs? You’ll be a player of value this way.

Be Productive With Others To Get What You Want

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It can feel harsh to accept the common maxims you hear:

There is no free lunch.

Noone owes you anything.

Value for value.

However, if you observe these statements happening in reality with human nature, it can be extremely empowering for you personally. You are not spending all your time trying to change the world or insisting on something that is elusive at best.

Instead, you can be productive towards your goals and participating in an exchange. Appealing to someone’s self-interest is the first place to start. And that takes insight, empathy and caring. You have to figure out what another person truly values and deliver it in exchange for what you want.

It’s a much more fruitful use of your time and energy than insisting that people do what you want.

You might start the process with, “What do I want?”

Then you have to ask, “What do my customers or friends want?”

Lastly, get clear on, “How do we make a trade so they get what they want and I get what I want?”

Trade, don’t insist.

Focus on the Deal First, Then the Details

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I have done many types of deals over the years. I have sold services, created venture opportunities for myself and clients, partnered, started businesses, launched new products and have helped people along the way who needed a little more vision or strategy. I can see deals that others can’t see and can see the myriad of steps and obstacles along the way to make the deal happen. It’s been fun, and I look at the world as a giant playground of opportunities.

It does take great intentionality and vision to make deals happen. Putting deals together is unnatural. Human nature enjoys the status quo too much and rarely chooses to rise above the noise to create more for themselves. Why change anything, even if it is better, when what you are accustomed to has an illusion of safety from its perceived comfort and familiarity? Everything in life and reality is working against you.

That’s why deal making has to center around the ideas first. Focusing on the possibilities and opportunities. Help someone to see what you see. Do they align? Do they trust you and your conviction?

The details are second. Yes, there’s likely a ton of work, cost and failure once you get a deal done. And it’s good to sketch out some of those back-of-napkin style to enhance the communication and experience around the deal. But obsessing about details that may or may not happen can kill a deal. Quickly. To a lesser degree, bringing in the details can overwhelm customers or partners. You are setting up the other party to extend the buying cycle or to simply say no.

I like to focus on the deal first. The ideas, upside opportunity, and possibilities are what catalyze deals. It’s why I insist on “Deals first, then details.” Otherwise, you end up killing deals that don’t get to see the light of day.

Much of this is because the ramp up and overhead are so low today to be able to test an idea. You don’t often have to go and buy brick and mortar real estate or hire a bunch of people first. You can see if your idea has viability with experimentation. You can test the demand or even the business relationship to see if it will even work. That’s the creative part of deal making. Take out the risk and find the essence of whether the idea has legs by prototyping.

Most people are sitting around waiting for something to happen. A few people are out there making things happen. Focus on deal making. Details come second.

Asymmetry Can Bite You

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Have you ever assumed something about someone and been surprised? Assumptions can bite you in the butt pretty fast if you are not careful.

I like to be surprised all the time. And I don’t like to make assumptions.

One thing I do assume is that any person or opportunity I engage has asymmetry. There is information I do not have. Everyone can teach me something. Furthermore, I have a deficit coming into any new relationship or deal. It’s unknown territory. So, it’s best to remain open and relaxed.

When I have asymmetry working on my side, for example, in advising clients, I’m fully aware of the imbalance in knowledge or insight. And based on the deal we are in, I make it a goal to close the gap, so we can have a dialogue based on trust. Often, this means taking time, listening, and sharing information in a way that is easy to digest, and focusing on education.

I do this so I can build long-standing trust with people who are worthy or who have retained me.

I have seen players in the marketplace that try to maintain an advantage in asymmetry in information or power, and I don’t see that strategy working very well these days. When we have an immense sea of options that are readily available, you can build mistrust quickly by trying to maintain a power imbalance in your favor.

I don’t think there’s a cut and dry policy. You have to read the people and situations. Sometimes you have information thieves that devalue you quickly by insisting on free knowledge from you. I don’t think you have to necessarily relent and give away your value. You won’t feel great about such misplaced generosity. You’ll feel used.

But in the case where good deals have been made with people that you like, building trust becomes gold. Much of that comes from how you handle asymmetry and distribute your knowledge accordingly.

You know things others don’t. They know things you don’t. It happens in car buying, dating, entrepreneurship and all your dealings. It’s a great opportunity to lead and focus on how you build trust.

 

The Problem with Infrequency

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How do you know the price of something?

Ultimately, it’s an agreement between the seller and buyer. You don’t have to pay the price. You could go elsewhere and get what you want cheaper. Or you could forego what you want if it’s not a need.

Buyers are at a disadvantage on infrequent items. If you only buy a home every seven years, are you calibrated to the pricing and all the fees along the way? Something you do once every seven years compared to sellers along the way that do dozens or hundreds of deals a month makes them an expert and you an amateur.

The same goes for the infrequency of buying a car, college tuition, health care, and a number of items that we run across in life’s journey and demands.

On frequent items like gas, cell phone service and eggs, it’s easy to dial into the price. You see it, touch it and interact with the pricing so much that there is less of a debate between the buyer and the seller.

It’s interesting to watch people get more excited about a 20 cent raise in gas prices and miss the upswing of university rates. We pay attention to things we frequent more easily.

Perhaps being scarce in attention can help you lever up as a seller. Your service could morph or integrate with other offerings. Or you could work in an innovative, infrequent purchase area to have more pull on pricing.

You could also be a price-focused hustler lowering your operational and delivery costs so that the language of price becomes collaborative with your buyers while you move the cost needle down.

Infrequency has its rewards for sellers and finding a game where you can assign pricing based on that value and advantage might be worth exploring in this vast, hyper-competitive marketplace.