Because I'm an occasional rock 'n' roll lawyer, aspiring pop idols sometimes seek me out. Usually the deals they're offered are awful. Yet one desperate singer showed me a contract that promised to put him not in the "surf music" but the "serf music" genre--the terms would have made a feudal overlord blush. I was frank with my prospective client: "It is mathematically impossible for you to make one nickel on this deal. Why bother?"
"But you don't understand," he pleaded. "I just gotta get a record deal!"
Superior dealmakers know exactly what they want and why. Start every deal with a little soul-searching. Ask yourself: "Why am I doing this?" And don't assume you know the answer. If you're honest, you may be surprised. Psychologist Abraham Maslow theorized a hierarchy of human needs starting with the basics like air, water and food; through sex, safety, love and belonging; to the higher ones like truth, justice, beauty and self-sufficiency. Let's adapt this idea to dealmaking.
Money is a universal need. Deal terms such as time, service or any kind of tangible or intangible property usually convert to plain dollars and cents. That much is obvious. But not all business needs are based on money. For example, a successful venture capitalist may harvest his company because he wants to spend more time with his family. An executive may quit the company that slighted her to launch a competing one. A retiring owner may not tolerate being put out to pasture and prefer to stay on as a part-time consultant.
Satisfying your emotional and psychological needs can be even more important than satisfying your financial ones. By being candid with yourself, you may uncover your real motives, crystalize your goals and push forward vigorously. Or you may reject a deal and find simpler ways to satisfy your true needs. After all, there's no point wasting time and energy on a deal that can never give you what you really want.
Your Wish List
Great dealmakers are also great list-makers. Putting your list in writing is the second step to effective goal-setting. Start by identifying all the things you want and all the things you don't. Go into detail. Then group and prioritize these goals into what you must have, what you'd really like to have and what you can take or leave. Make this exercise even more effective by getting someone to act as a sounding board and listen to your ideas. Or consult a professional, such as an attorney, or other resources (books, magazines or the Internet, for example) to find out what each side typically gets in a deal like yours.
I know this may seem like undistinguished advice, and the exercise so simple-minded you'll want to skip it. Don't. It is remarkably powerful. At its most basic, your checklist will keep you from missing something, from forgetting to insist on an important deal term or concession. It also articulates your bottom line--the minimum you'll accept before walking away. But even more important, having clear, specific goals gives you the focus, energy and self-confidence to negotiate on your terms. In business, attitude can be everything. And the strength that comes from knowing exactly what you want translates to true power at the bargaining table.
By Robert McGarvey
Business ethics and dealmaking don't have to be like oil and water. If being an ethical member of the community is one of your priorities, feast on some substantial food for thought in the business ethics section (http://www.us.kpmg.com/ethics) of KPMG LLP's Web site, where the goodies include a white paper on avoiding the myths about business ethics and another on the how-tos of measuring business ethics. None of this is light reading, but it's indispensable for any entrepreneur who's bent not on making the quick deal but on building a company of lasting import.