RELATE: An Acronym for Deal-Making Success with Corey Kupfer
Scott Walton joined as a guest on this podcast to talk about relationships and their pivotal role in deal-making. Scott built his deals and succession plan on his relationships, and that’s true for many deal-makers. Something popped into my mind after Scott’s episode, and it was the word RELATE. An acronym came up, and I was thinking about how I often ask guests on this podcast what they think about the mindset of a deal-maker.
What makes somebody different? Many entrepreneurs out there don’t do deals, and many successful entrepreneurs I know do deals. They also have organic growth, build sales and marketing, and get more customers using their methods. However, I’m aware of a few companies that have failed to close the sort of deals they need to scale.
The question is, why do some close deals and others don’t? There are many ways to describe it, but I’ll share them with this little acronym.
What Is The Acronym For RELATE; Relating To Deal-Making
R Is Relationship
There are several ways to close deals. You can go to investment bankers, check business brokers or various listing services. However, some of the best deals (business partnerships, acquisitions, joint ventures, or strategic alliances) occur from relationships built over time. People who do deals well are usually good relationship people, and that makes a big difference in helping to find deals. When they love and respect you, they present you with opportunities if they know you’re looking. It’s certainly true for me! My success with deals, DealQuest, and this podcast are deeply connected to the relationships I’ve built.
E Is Entrepreneur
Not every entrepreneur does deals, but most true entrepreneurs do deals. When I say true entrepreneur, I don’t mean that in a judgemental way, but there’s a difference between self-employed people and entrepreneurs.
Many people leave working for someone else, and they become self-employed. They got themselves their job and provide whatever services they do - they may be solo or have a small staff working for them. They have a good thing going on, and they are happy. Compared to the entrepreneurial world, anybody with an entrepreneurial mindset is trying to build a business that’s not dependent upon having people working for them alone.
An entrepreneur is usually looking for new opportunities to grow and scale. I’m not talking about fast growth or the pressure to raise capital because it is not always the best decision for everybody.
I’m talking about the growth mentality, the innovation and creativity mentality. They get the constant drive to improve their businesses and are less influenced. I think the best way to describe them is their willingness to take risks.
There are obviously risks and learning curves involved in deals. There’s a much higher likelihood–not a hundred percent–that they owe some of their growth to deals. It is simply the mentality of entrepreneurs. They are looking for different opportunities and organic growth is the only sustainable way. Over the years, I’ve noted that most successful entrepreneurs engage in deal-making, especially when it comes to scaling and growth.
L Is Leverage
What do I mean by leverage? Deal-makers understand that there are ways they can leverage different assets, capital, relationships, team, and expertise to accelerate their growth and make them more money to help them achieve their other objectives. That also means they are often willing to leverage their business in terms of putting themselves and their capital on the line.
They could take on debt or equity financing to handle the pressures that come with it. However, they can leverage growth, opportunity, capital, and their team’s expertise. They can leverage the trust and respect they have in a particular geography or industry to close deals. The L basically means to use the asset you have to leverage a result.
A Is Awareness
The way I relate to that in the mindset of a deal-maker is they’re always looking out for opportunities. They are aware, observant, and always looking at industry trends. They are looking at what the competitors are doing, they’re looking internally for key talent and relationships, and keeping their ears and eyes open. They put themselves out there in a way that opportunities show up to them, they’re that kind of people you see and say;
“Wow! how do they always end up finding these great opportunities.”
I’m here to tell you it starts with awareness - it starts with shifting that mindset. Instead of being so focused on the day-to-day operations of your business or just only getting sales, you need:
- To expand your awareness
- You need to look and see if there are other opportunities
- You need to listen more
- You need to see what other people are doing to grow successfully.
When you do that, the odds of closing good deals and the mentality shift increase your chances to come across excellent deals and opportunities.
T Is Thick Skin
Let me put it out there that I didn’t think a lot about these, they just came to me, and they are all true. Besides these, I’m sure there are other characteristics that fit into this acronym. These are the ones that come to mind.
When I say thick skin, I don’t mean coarse persona. The entrepreneurial journey has many ups and downs and things that don’t always work in the deal space. You may spend a lot of time looking at potential deals and not find the right ones. After going through the due diligence and processes to find good deals, they turn out to be duds. Even in doing a deal and finding it does not work out. Thick skin is not getting attached to the outcome. You understand this is part of the process, and you don’t get emotionally thrown off or upset. You get over it quickly and look for the next opportunity. This is a quality that every good entrepreneur has, and it’s true for deal-makers as well.
E Is Equilibrium
Equilibrium in the deal-making context means you don’t get thrown off when you’re sitting in the negotiating room. You maintain your equilibrium, and you don’t get triggered by what people say.
Some equilibrium elements require having a “thick skin,” but this is the other piece of it. During the process of going through the deal, you maintain that equilibrium. You don’t get into a place of “scare-city,” and force a deal over the line, ending up with dissatisfied parties. Your fears do not rule you, and you do the internal bodywork we often talk about as a deal-maker to maintain that state where you see clearly and make rational decisions.
This acronym is so many characteristics that I see in deal-makers. We’ve got skills and resources, but then there’s also mentality - mindset shifts and that’s what this episode is all about. Hopefully, this acronym will be helpful if you’re someone that hasn’t done as many deals as you’d like. Remember, the relationship you build today might be the deal you’d do five years from now.
Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.
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