Trump's secret to closing any deal. (The Art of the Deal)
Before Donald Trump took the oath of public office, he was a businessman, not just an ordinary businessman but a real estate mogul. He bought and sold properties, but not just simple residential houses or apartments. He produced enormous projects such as the Trump Tower, a casino hotel in Atlantic City, and many others. With his vast experience as a businessman, he has learned some very important lessons that have eventually helped him become president. You don't get elected president because you simply have good ideas, people are not often swayed by logical arguments, they don't vote based on logic. People vote for you because they like and trust you as a person. Because these two things are also vital in business, he became an expert in influencing people as a real estate mogul, and used this skill later on in his presidential campaign.
So what are the techniques that made him such a successful businessman and got him elected president? Well, Trump blatantly told us all of his secrets in his book 'The Art of the Deal'.
In one of the first chapters, he talked about the ten elements of the deal he constantly uses. He applied these in his business endeavors and in his presidential campaigns, and apply to anything else in life.
Here are the first five of the ‘elements of the deal’ from Donald Trump:
1-Think Big:
Trump always felt like he was meant to do something big. Already at the start of his career, his eyes were fixed on big buildings and projects, never on the tiny 'cookie cutter' businesses and buildings as he called them. What attracted him was the challenge of building spectacular buildings, like the development of a hotel-casino in Atlantic City, where he combined the casino he built with a hotel. He was thinking: "What would be better than only a casino? Well, let’s just attach a hotel to it and have people stay there while they gamble at the casino." By thinking this big he became creative, and found ways to develop extraordinary projects that would make him a lot more money than if he thought small.
Trump's saying is: “If you’re going to be thinking anyway, you might as well think big.”
And he’s got a point. If you’re planning on doing something anyway, you might as well go all out and make it as big as possible. If you’re thinking small, the risk will be low, but you’ll get small rewards. When you think big, you’ll increase the risk, but the reward also massively increases. Most people tend to think small out of fear. The risk seems too great, they have to make important decisions, and they freeze up. So before you start thinking big, you need to get rid of those fears first. In this blog I made about courage I tell you about three strategies that you can immediately apply to get rid of any fears you might have. So if fear is your bottleneck, click here.
Trump also believes that thinking big will bring up and require total focus. He has noticed that the people around him who think big are mostly obsessive, driven, and completely focused on making their big dreams a reality. It may not necessarily lead to a happier life, he says, “but it’s great when it comes to getting what you want.”
This may stem from having to step up to the task, and when your task is really big, you´re going to have to put in some work. It could also just be a personality trait, that big thinkers tend to be obsessed with achieving massive things. It's probably a combination of both, but either way, thinking big will require all of your focus. Do you have what it takes?
2-Protect the downside and the upside will take care of itself:
Trump always goes into every deal expecting and preparing himself for the worst. An example of this is what he did with Atlantic City, with this project he received an offer from Holiday Inn. They asked him if he wanted to settle for a 50% stake in his casino instead of a 100, but then Holiday Inns would pay back all the money Trump already had invested in the deal. This meant he could choose between having a 100% stake and full control, but owning all the risk, or he could give up 50% and have no risk at all. For him it seemed like an easy choice. He chose the latter.
“It’s been said that I believe in the power of positive thinking. In fact, I believe in the power of negative thinking.”
His strategy is that he always goes into every deal expecting the worst, this is because he has seen so many deals come before him, and most never come to fruition. Some do, but they too don't go according to plan most of the time. For this reason it is important that you have a contingency plan, so that when things go wrong, you have a way out, or something else you can do. It’s also the case that you’ll often be pleasantly surprised when you always expect the worst, because when it doesn’t happen and everything does go according to plan, you will be even more content.
“If you plan for the worst, the good will always take care of itself.”
3-Maximize your options (Fluidity):
Trump always likes to stay flexible when making his deals. He knows that a lot of the deals he gets in front of him never actually come to fruition, so he likes to keep his options high so that he always has some other deal he could make when one of them falls out.
An example of this was his project in Manhattan, for middle-income housing. This project was meant to have government financing behind it, but when the city started to have financial problems, suddenly that deal was off the table. So instead what he did was promote the site that was previously meant to be a housing project, as a possible convention center. Eventually, this second option worked and he got his convention center built.
There are always things that may go wrong when you’re taking on an endeavor. Some things may work, some will not, so you always have to keep multiple options for when things don’t go according to plan. When you have multiple options for a project, you can always fall back on the other options when option number one doesn’t work. This way you don’t have to throw away your plan entirely if one thing doesn’t work out, because you can immediately switch to your other plan and make it work that way.
An example of a historical figure putting this into practice is Napoleon Bonaparte. The secret to his strategy, as he put it, was that he had no strategy. This meant that he was always fluid in his actions, not clamping on to some rigid plan, but being able to adapt to circumstances if necessary. Using this principle made him one of the best strategists the world has ever seen, and provided him with countless victories, simply by adhering to the principle of fluidity.
4-Know your market:
It is important before you decide to undertake any endeavor, that you know the entire landscape. If you don’t, you’re going to encounter some unwelcome surprises. Trump knew this. He was always aware of the importance of knowing everything about the market he was in, on a big level, but even on a local level, where he built his sites for example. He always made it a big part of his projects to ask people in the neighborhood what they thought of their area, asking them what they thought of the schools, the community, the safety, etc. He even asked cab drivers numerous questions about the city to find out what the opinions of the inhabitants themselves were. The cab drivers of course had numerous encounters and conversations with people in the area, so they were the ones you should talk to for that information.
He asked so many questions and amassed so much information, that he eventually acquired a gut feeling about the possible deal. He now knew exactly whether he should go for it or not and could make the final decisions based on intuition. This was because he knew the full landscape of where the site was exactly, and he knew how everything ticked.
"Know the enemy, know yourself; your victory will never be endangered. Know the ground, know the weather; your victory will then be total." ~ Sun-Tzu, The Art of War
5-Use your leverage:
Desperation is never attractive to other people. When they sense that you’re desperate to get something, they don’t want to give it to you. Desperation is repulsive and only works to your detriment. What you need to do is create leverage. You do this by having something the other person desperately wants, you need to switch the desperation to their side, so that you hold all the cards.
When Trump was about to partner with Holiday Inns, they expected him to already have the project nearly finished. It wasn’t, but Trump did everything to hold up the image that it was. He let bulldozers ride around the site, just scooping up sand in one place and dropping that same sand elsewhere, then putting that sand back where they got it from, etc. This was to hold up the image that they were working hard and were almost finished, and Holiday Inns believed it. This meant that because the project was almost already finished, Holiday Inns had to act fast to make a deal on the site, because if they didn’t, Trump would probably not need their help anymore and the deal would be off the table.
By making them desperately wanting to make the deal, and putting some urgency behind it so that they would need to make a decision immediately, they were the ones interested in what Trump had to sell and not the other way around. Or at least that was the perception of the situation that they had. It actually was the other way around, because Trump really wanted to lose all the risk by giving up his 50%, but he couldn't show this.
Holiday Inns made the deal, with the best possible terms for Trump.
“Leverage often requires imagination, and salesmanship.”
Leverage is having something the other guy wants, and using it to make a deal with better terms for you. But most of the time, we do not actually have this leverage, as Trump experienced numerous times. What he knew was that reality was not important, what matters is the perception they have of that reality. If the other side believes that you have something that they need, and if you could play up that perception by creating a sense of urgency and scarcity, you’ll hold all the cards, and you can get the best terms possible.
"Imagination rules the world.” ~ Napoleon Bonaparte