Donald Trump says if his first few deals hadn’t succeeded, he’d probably still be building rent-controlled housing in Brooklyn.
Lessons he has learned include:
Protect your downside. Make your worst-case scenario as good as possible.
Think big and focus all your mental energy on what you’re trying to accomplish.
Real estate values move in cycles, so it’s better to wait than to overpay for property.
Fortunate timing is essential when you are putting a complex deal together.
Use leverage and always negotiate from a position of strength. Figure out what the other person wants, and use it to get what you want.
Don’t just talk a good game. Do what’s necessary to deliver the goods.
When you feel someone is taking advantage of you, fight back hard. If you really believe in what you’re doing, you’ll probably come out okay.
Share the risk. Trump got others to minimize his risk on two of his biggest deals
What you need to succeed:
“Think big” – Donald Trump wasn’t just out to earn a good living, he wanted to make a splash. The key to thinking big is to focus all of your mental energy on your business. It’s an almost neurotic trait of many successful people.
“Protect the downside and the upside will take care of itself” – Trump doesn’t like to gamble; casino owners are likelier to win than the guys playing the slots. When putting a deal together, always have a viable fallback position. Don’t leave yourself exposed if your original deal falls through. If Trump hadn’t gotten the zoning approvals for Trump Tower, he would have built a profitable office building instead.
“Maximize your options” – Don’t get so attached to one deal or idea that you aren’t willing to change tracks if a better alternative appears. Trump keeps a lot of balls in the air because he knows most deals don’t come to fruition. Keep your alternatives open and stay in the strongest bargaining position possible.
“Know your market” – Steven Spielberg, Lee Iacocca and author Judith Krantz are three very different people who all have an instinctive sense of their audience and market. Trump believes he has it as well, so he doesn’t consult much with number crunchers or consultants. He prefers to get a gut feeling and follow his instincts.
“Use your leverage” – Never appear desperate to make a deal. Always bargain from strength. Have something the other fellow wants, needs or can’t do without.
“Enhance your location” – It’s not as simple as spending top dollar to get the best location. Sometimes you pay less for a less desirable location, and use promotion and trendiness to make it more desirable. Never accept a bad deal just to get a location.
“Get the word out” – If you do things in a way that is just a little bolder than average, the press will cover you. Use that to your advantage. Sometimes you may get negative publicity, but the value of being written about usually outweighs the negative.
“Fight back” – When people try to take advantage of you, fight back hard. When you fight for something you really believe in, things will probably work out fine.
“Deliver the goods” – You can promote yourself and your project, but you eventually have to deliver the goods to be taken seriously. Many people talk a good game but don’t deliver. Trump promoted Trump Plaza hard, but he delivered a great property.
“Contain the costs” – Spend when you must, but don’t spend more than you should. Trump complains if he feels a contractor is overcharging, even by a few thousand.
“Have fun” – Money isn’t the object. The game should be fun, so enjoy it.
Trump works on several deals simultaneously, because he figures that most of them will fall through.
Always keep your options open.
Biography & Autobiography
October 6, 2015
New York City Real Estate Magnate, Atlantic City Casino Owner, & International Television Celebrity. Host Of The Apprentice. 45th President Of The United States Of America.
Donald J. Trump is the very definition of the American success story, continually setting the standards of excellence while expanding his interests in real estate, sports, and entertainment. He is a graduate of the Wharton School of Finance. An accomplished author, Mr. Trump has authored over fifteen bestsellers and his first book, The Art of the Deal, is considered a business classic and one of the most successful business books of all time. Mr. Trump has over eight million followers on social media and is a frequent guest across a variety of media platforms. Photo by by Michael Vadon [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons.