Deal making is getting increasingly complex. The lead times for agreements have also gone up significantly in the recent years. The more the time spent on the so called due diligences, the more are the chances that doubt and a perceived notion of hindsight will sour the relationship much before it even began.
Deals are no longer done on trust and that is what makes them that much harder to do. Below are 6 things that are critical to making deals successful:
Know your worth: valuations aside, you should know how much you are worth. And when this is said, it does not mean that you should over value yourself in pride or undervalue yourself due to low self-esteem. It means you know your correct worth. One way of finding this is to ask yourself, “how much would I be willing to pay for this”, putting yourself in the counterparty’s shoes is a good way to know your self-worth. Once you know this, stick to it.
Build personal bonds: building personal relations in key to making deals successful. In most deals eventually you will have to work in some way or the other with the counter-parties. It is best to build personal relations with them. This is to ensure that you deal with each other on a personal basis (the way deals are to be done) and not through your various legal and financial consultants.
Be transparent: if you are transparent, you force others around you to be. Do not get into a deal trying to hide something, things will eventually be clear and all types of cover-ups will lead to a fall out.
Clear the expectations of all stakeholders: it is important to clearly let everyone know what is in it for them when they get involved with the deal. You do not want the talks to go further and someone throwing a monkey wrench into the plans. This will increase the lead time significantly.
It’s not a win or lose: The sooner you understand that it’s not a win for you and loss for them, it has to be a win-win for everyone. Everyone must leave the table feeling like they gained and this is not only possible, it is the only way to make sustainable and successful deals.
Be proactive and professional: Being on top of things and proactively communicating as well as discussing openly and professionally all the outcomes with all stakeholders is the only way the deal will finally go through. In fact, the better you are being proactive the lesser will be the lead time for conversion.
That’s my two cents on the art of deal making. Thanks for reading and happy closures.
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