Ice Cubes To Eskimos

Making A Deal

Before waging your sales campaign, do your homework.

If you think haggling is the route to sales success, think again. According to Marc Diener, Los Angeles attorney, speaker, columnist for Entrepreneur and author of Deal Power: 6 Foolproof Steps to Making Deals of Any Size (Owl Books/Henry Holt), "Too much emphasis is put on haggling. Preparation is the real key to making better deals."

Never fear, even the inexperienced can become savvy dealmakers. Diener offers this advice:

  • Know what you want from the deal. "People jump into deals too quickly--before they know what they want," says Diener. "Step back and ask yourself what you're really going after."
  • Get help and information. "Dealmaking is a team sport," says Diener, who urges entrepreneurs to involve professionals, such as accountants, lawyers and bankers, whenever a deal is important. "Or do self-help research. That's become very easy to do on the Web."
  • Check out the other side. "Are you dealing with a crook? An incompetent? You don't want their problems to become your problems," explains Diener, who insists entrepreneurs perform "due diligence" (meticulous research into the other side) before closing any deal.
  • Plan for the downside. "Know what can go wrong," says Diener, "and seek to minimize your risks." Ask yourself: If the other side doesn't perform as agreed, what do you lose--and how could you cope? "Using tools such as insurance and peformance bonds can be good policy," adds Diener.
  • Get it in writing. Don't let the glow of the moment prompt you to close a deal on a handshake alone, stresses Diener. A written agreement "is evidence of what everybody agreed to," says Diener, "and putting it in writing forces us to flesh out our thinking."
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This article was originally published in the August 2000 print edition of Entrepreneur with the headline: Ice Cubes To Eskimos.

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