These 11 mega-successful entrepreneurs, and members of The Oracles, share the most important piece of advice that helped them close millions of dollars in deals. Their tips will save you years of wasted effort and help you mirror their success.
1. Build a strong foundation.
If raising capital, first seek advice from investors. It’s a smart way to avoid rejection and learn how to improve your pitch deck. Execute your company goals, return with an improved pitch, and eventually, you'll land investment (it took us three years from the first meeting).
Here are some hard lessons we learned. One, don't promise to raise capital by a certain date; you'll look like a failure if you don't close the deal in time. Two, avoid needing capital. Investors ironically want to invest in companies that will succeed regardless. Three, don't prematurely raise capital. Grow your company as far as possible alone; you'll learn many important lessons and how to execute. Most importantly, you'll have time to figure things out without a ticking time bomb as you ramp-up expenses. (We had our first company for five years before landing investment for Canva. This ensured we learned many critical lessons before turning up the heat.)
—Melanie Perkins, co-founder and CEO of Canva, who just doubled her company’s valuation to $345 million
2. Use tactical empathy.
When the stakes are high, they are usually high for everyone. Be reasonable, but stay firm on the issues that matter most to you. Everyone will have slightly different motivations—try to ensure you understand them all. Treat everyone fairly, lay out your concerns and issues honestly, and expect the same from others. Issues that can matter in addition to cash, debt and equity are timing, responsibilities, stakeholders, communications and future opportunities.
3. You must be liked.
A finance mentor once told me, "Most deals are done on the golf course.” People do business with those they like. You need to be likeable. Here’s how: One, master reading personality types. Are they extroverted or introverted? What motivates them? Financial gain? Freedom? Status? Two, adjust your pitch. If I’m negotiating in China, it’s courteous to speak the language they understand. Three, like attracts like. People are more attracted as you adjust your personality to theirs. I’ve made money online and in conventional business by reminding people of their values and showing how I support their worldview.
4. Help the other side of the table win.
When in negotiations, find the negotiator’s personal and professional wins, and do all you can to help them achieve those wins, even if they are outside your negotiation. It could be a new job, a promotion, an introduction—make it happen. Remember, the person on the other side of the table is just trying to keep their team safe. Help them achieve this goal, because they are afraid, on some level, of making a career-ending decision. It is your job to help this person look good!
5. Don’t be afraid to walk away.
At one time, we were making $50,000 a week in profit. Life was beautiful. But one of our key clients made a change in their business—suddenly we were losing $70,000 a week. We were forced to cut everywhere. Frustrated, I asked a friend for advice. He explained that U.S. businesspeople are the worst negotiators in the world. We think a final offer is a final; in other countries, a deal hasn’t been properly negotiated until someone walks away.
We used this strategy in every area of our business. We proposed extreme cuts with every vendor. They all tried to negotiate, so we told every vendor that we were leaving. After a few days, we reached out with one last opportunity to keep our business. Eventually, we saved about $4 million in annual expenses. Don’t be afraid to walk away. Rather, you should walk away and return to the table to get the best pricing.
6. Learn how to sell before it's too late.
Learn how to sell now. In one year, I sold $2.7 million worth of programs over the telephone—after I finally learned sales techniques. This has probably cost me $20 million in lost revenue from missed sales in my 30s. Even if you feel that you don’t like sales and it makes you uncomfortable, too bad. Learn it anyway. Sales is a great thing. Get a sales mentor to coach you. Get on the phone. Start practicing sales techniques. You are helping customers solve problems and take action. When you rewire your brain around it and feel good about selling, you can make millions of dollars.
7. Create win-win-win situations in every deal.
I enter every negotiation with two premeditated outcomes: One, the line in the sand that I’m not going to budge from regarding specific terms and conditions. Two, how to create win-win-win situations for everybody involved in the deal. Many deals fall apart because someone doesn’t get what they want.
8. Limit exposure to 20 percent of assets.
Exposure to any project should be limited to 20 percent of one’s assets. I’ve seen people do 10 transactions with nine of them profitable, and do one transaction that took out all the profit from the other nine. And, that one transaction took out the whole company as well.
9. Leverage the power of human capital by creating systems.
Always leverage human capital to multiply your time and output. I do not write a single line of code, but my employees collectively have written millions of lines of codes to execute my projects. While they are paid dollars for the hours they put in, I’m paid millions for the projects they build. I have set processes in place that my employees follow. I don’t visit my office for months at a stretch because I am busy living life or traveling around the world.
10. Create a predictable way to generate leads.
Don't rely on luck. I see a lot of businesses rely on relationships, networking, proposals and the next referral. I built a multimillion-dollar business on this. Then it failed. If you don't have a predictable way to generate leads such as the SSFMethod of lead generation, your ability to grow quickly and sustainably will be tough. It took me going $726,000 into debt to learn the hard way. If you don't have automated lead generation, you don't have a business—you have a hobby.
11. Get out of your own way.
Once upon a time, I'd spend way too much time talking the about a deal and not talking to the people behind it. Once I learned the difference, that all deals are people and all people matter, I learned to focus on their outcome and got to know the person first. The years I wasted, the deals I lost, the goals I could have accomplished, these are all the things I could have avoided by just putting the other person’s needs first.
—Neil Twa, cofounder of eCom Pro Academy
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Originally published on Entrepreneur.com. ©2017 by Entrepreneur Media, Inc. All rights reserved.