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My Dad was a geologist and mining engineer. He used to say, “Keep your friends close and your enemies closer.” I’ll explain that in a minute.
This post is about the deal. What is a deal? How do you structure one? What is important to remember in a deal? How do you deliver to expectations? How do you make sure you are successful?
The first thing you need for a deal is to be prepared: A good business person invests time and money in equipment and tools. All the branding and promises don’t matter if she can’t deliver on her promises. A good business person thinks about: Who will do the work? Who can be a partner? What expertise can she tap short-term? A good business person has done her research – she knows the data cold. She knows the markets. She knows historical pricing. She’s totally current on trends so she can jump ahead to where the customer will be – not where everyone else is now.
The second thing you need for a deal is a potential customer: Does the customer WANT what she is selling? This is a different question from: Does the customer NEED what she is selling? The customer often wants what’s in front of them and not what they need – what would really help them. This savvy business person is ahead of others – so she educates the customer about the future. The understanding of trends and data comes in handy.
The third thing you need for the negotiation is a really clear idea of the whole deal. She can’t be swept up like a romantic interest in a two star movie. She has got to remember that human beings fall into the trap of WIFOYIATI – What’s in Front of You is All There Is. A deal must be structured so goals are clear for the business person and the customer. This means the goals include now-and-future expected results. The way to evaluate the deal at the end is decided in the beginning.
So, what did Dad mean when he said, “Keep your friends close and your enemies closer?” That’s the WIFOYIATI. When we are socializing with our customers, our competitors, our lobbyists -- they become familiar to us. The human tendency is to think they are friends because they are familiar. Dad’s reminder was that we should never forget that true friends are different from business contacts.
A deal has to be evaluated. Were the goals met? Did the results happen? Was the customer happy? A YES to these questions means future business. If that deal didn’t work out, she figures out what didn’t work and stops doing that. If a deal was so-so, she may continue what worked. If a deal had excellent results – she’ll keep doing that kind of deal.
The fourth thing you need to remember is that ONE deal is not enough. Researchers and consultants say the single reason most small businesses fail is because they don’t send out invoices.
She had a success today – but she has to keep having successes, over and over. She has to keep doing deals from beginning to end. She has to do the deal; do the work; do what it takes to finish the work for results.
The lesson is that long-term-success is based on consistent hard work. She has to approach her life and her business with a bent toward excellence. The next deal bid has to be excellent. The way she treats her workers and partners has to be excellent. The way she eats, rests, exercises her body, and her spiritual life have to be excellent. Because all these factors let her see now-and-future; let her create deals that are good for everyone.
For Alaska – oil and gas tax rebates are a deal – they have to be excellent. Investment has to be in place. Market and cost data must be known. Goals have to be clear for now and the future. Everyone in the deal should expect results they can check out later:
- Citizens leasing the resource
- Deal makers who are extracting and selling the oil and gas
- End-customers who expect a good deal themselves.
And that’s how to do a deal.
Ann L. Lovejoy is a consultant who helps organizations be better to do better.