Despite its age, The Art of the Deal remains a glorious insight into Donald Trump. Inside its pages are the essential philosophies and modus operandi that have sustained Trump’s success over three decades.
Catching a flight? It’s the perfect on-flight companion, quick and easy to read, the book runs through the Don’s 11 strategies to morph you from some lukewarm, mediocre negotiator to Martin (or Martine) the magnificent, able to strike and close deals that others only dream of.
The Art of the Deal is still in print, so it’s easy to buy from a myriad of bookstores, especially online.
As a small sampler to whet the appetite, here are the highlights, straight from the Don:
1. Think big.
I like thinking big. I always have. To me it’s very simple: if you’re going to be thinking anyway, you might as well think big.
If you’re satisfied knowing that you can comfortably make a deal that doesn’t require much effort, then you’re not thinking big enough.
Most people think small, because most people are afraid of success, afraid of making decisions, afraid of winning. And that gives people like me a great advantage.
Be positive, think of all the great things you’ll accomplish. You aim high and keep pushing. Don’t quit. Deliver results.
2. Protect the downside and the upside will take care of itself.
I always go into the deal anticipating the worst. If you plan for the worst–if you can live with the worst–the good will always take care of itself.
The only time in my life I didn’t follow that rule was with the USFL [the defunct United States Football League]. I bought a losing team in a losing league on a long shot. It almost worked, through our antitrust suit, but when it didn’t, I had no fall back. The point is that you can’t be too greedy. The dealmaker must sacrifice personal preferences to ensure a profitable outcome.
Get into deals that you can afford to recover from if things go poorly, and know when the opportunity cost for making a small deal is lower than had you not made a deal at all.
I like handling complexity. What to others look like big problems are massive opportunities. The more complex the deal, the fewer developers will be interested.
3. Maximize the options.
Keep as many options as possible. Leverage comes from options.
I never get too attached to one deal or one approach. For starters, I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first.
In addition, once I’ve made a deal, I always come up with at least a half dozen approaches to making it work, because anything can happen, even to the best-laid plans.
Always be flexible. Flexibility comes from having many options to act on.
No matter how great something seems, it may never pan out. Sure things can go belly up and fizzle within seconds even after years of hard work.
4. Know your market.
I like to think that I have that instinct. That’s why I don’t hire a lot of number-crunchers, and I don’t trust fancy marketing surveys. I do my own surveys and draw my own conclusions. (Editor note: Trump tends to collect opinions from a range of people rather than rely on consultants, statisticians, or critics.)
Trump Tower is a building the critics were sceptical about before it was built, but which the public obviously liked. I’m not talking about the sort of person who inherited money 175 years ago and lives on 84th Street and Park Avenue. I’m talking about the wealthy Italian with the beautiful wife and the red Ferrari. Those people — the audience I was after — came to Trump Tower in droves.
5. Use your leverage.
Have patience, then be ready to swoop. Much more often than you’d think, sheer persistence is the difference between success and failure.
Many of my successes came from offering to buy assets before they were on the market. To many sellers, a bird in the hand is worth two in the bush.
The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead.
You need leverage: Find out what the seller needs or wants and give them this in addition to the purchase price.The only way you’re going to make the deal you want is if you’re coming from a position of strength and can convince the other side that you have something they need.
I’m not afraid to blur reality to utilise leverage. When the board of Holiday Inn was considering whether to enter into a partnership with me in Atlantic City, they were attracted to my site because they believed my construction was farther along than that of any other potential partner.
In reality, I wasn’t that far along, but I did everything I could, short of going to work at the site myself, to assure them that my casino was practically finished. My leverage came from confirming an impression they were already predisposed to believe.
6. Enhance your location.
Perhaps the most misunderstood concept in all of real estate is that the key to success is location, location, location…First of all, you don’t necessarily need the best location. The adage that location is everything in real estate isn’t true. What you need is the best deal.
You can take a mediocre location and turn it into something considerably better just by attracting the right people. Beyond the real estate industry, rather than overpay for something that is already established, consider cheaper alternatives that have the potential to be moulded to your taste.
7. Get the word out.
Once you’ve made a deal, the only way it’s going to be worth anything is to then attract customers. Similarly, creating a public persona helps you get the most out of your next deals.
I’ve always embraced a healthy dose of sensationalism and controversy to pique the media’s interest.
I play to people’s fantasies. People may not always think big themselves, but they can still get very excited by those who do. That’s why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular.
“One thing I’ve learned about the press is that they’re always hungry for a good story, and the more sensational the better…The point is that if you are a little different, a little outrageous, or if you do things that are bold or controversial, the press is going to write about you.”
Journalists are always hungry for a good story. The more drama and controversy they can sell, the better. The press can be good, bad or even insulting. What matters is getting the word out. Any mention in the press, outside of a paid advertisement, is invaluable to your business or deal.
Good press is always good and certainly better than bad press. Although bad press can often times be better than no press at all. I haven’t always had great relations with all members of the press; they don’t always say nice things about me. It doesn’t matter though since controversy will sell a lot more than no press does.
A small article in The New York Times will be worth many times more than a full-page advertisement – even if its slant is negative.
In the event of bad press, you should never lie or deny what is happening. Instead you should reframe the issue. For example, instead of talking about rich people who buy apartments, talk about all the jobs being created.
There is always a win-win to The Art of The Deal. Never forget that and let other people know about it too.
8. Fight back.
In most cases I’m very easy to get along with. I’m very good to people who are good to me. But when people treat me badly or unfairly or try to take advantage of me, my general attitude, all my life, has been to fight back very hard.
The risk is that you’ll make a bad situation worse, and I certainly don’t recommend this approach to everyone. But my experience is that if you’re fighting for something you believe in — even if it means alienating some people along the way — things usually work out for the best in the end.
You should make every effort to be as nice as possible, but you should never take unfair treatment lying down. Of course, you should have the judgement to pick and chose your battles wisely. You don’t need to fight over every single detail.
In cases where you sense that giving up an inch will eventually lead to the loss of a mile, you need to fight.
It is always possible that some people may get cranky and not like what you are doing. Don’t back down and never apologize. These people are “life’s losers” in the art of the deal. Keep going.
9. Deliver the goods.
You can’t con people, at least not for long. You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don’t deliver the goods, people will eventually catch on.
10. Contain the costs.
I believe in spending what you have to. But I also believe in not spending more than you should.
My father taught me to never pay a penny more than you should for something, since pennies can easily turn into dollars.
From observing my competitors, I’ve found that throwing money at a project is never the path to success if it was shoddily planned.
11. Have fun.
Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.
Successful deal-making should be about the thrill of winning and accomplishing something, not solely for making money.
I don’t do it for the money.
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