How To Be An Entrepreneur - Without Risking It All!
 

I've recently been re-reading Donald Trump's first book, "The Art of the Deal". I can't comment on his other books (I haven't read them), but "The Art of the Deal" is great! It gives you the insights of someone who made his mint on his "wheeling and dealing" skills...

(Admittedly, he did have a head-start with a successful and rich Dad. I think I read his first property deal, which he did in partnership with his Dad, was for an apartment block with 1,200 apartments in it. So you can see, he didn't exactly start from nothing! But there's still useful stuff in there...)

Anyhow, in his book, Donald Trump always talks about how he doesn't really see himself as a risk-taker. (This is a common theme among highly successful entrepreneurs.) Rather, he always looks at the "downside". What's the worst that could happen?

(By the way, Buffett does the same thing when he's buying stocks...)

It's a good attitude to have. What's the worst that could happen? If you can live with it, then you can do the deal!

Another thing I've picked up is, how can you reduce the downside? Donald Trump reduces his "downside" in many ways... Sometimes by selling to someone. Sometimes through partnerships.

For example, there was a derelict hotel in New York City, called the Commodore Hotel. It was losing money hand over fist. Donald Trump liked it, because it had a great location. Even though it was in a "lousy" neighborhood, lots of people walked past it every day on their way to work, since it was near a subway station.

At the time, he could have bought it and spruced it up a little, to see if he could make money where others couldn't. Doing that, he could have easily failed. Instead, he did different things to reduce his risk...

• He negotiated an option to buy the building, but conditional upon him getting other parts of his planned deal in place. This reduced his money risk - because he didn't have to pay up front, until he knew everything else was in place.
• He negotiated with New York City for a total abatement of property taxes on the building for 40 years. This reduced monetary risk in the future.
• At the time, Hyatt hotels didn't have a hotel in New York City. He did a joint-venture deal with Hyatt, where they would both own the hotel 50/50. Donald Trump would build it, and Hyatt would run it. This also reduced his risk because the Hyatt brand name would attract customers. (There was no "Trump" brand name back then...)
• As part of his deal with Hyatt, he negotiated a "non-compete" clause, that Hyatt couldn't build another hotel in New York City or JFK airport without his (Donald Trump's) approval. This reduced the risk of another competing Hyatt hotel in the area, which might reduce the appeal of his half-owned hotel, and so could have reduced profits.

Through lots of lengthy negotiating, he got all the parts of the deal in place... And it was a success!

By the way, the hotel is still there - it's the Grand Hyatt New York.

There are many ways to reduce your risk in any project... So, you can take a "leaf" from Donald Trump's book (and the book of a lot of serial entrepreneurs, I might add). That's to think - what's the worst that could happen? Then, think - how you can reduce that risk?

Hope you find this a profitable post... :)

Best wishes,

Dien

P.S. Donald Trump has had the occasional "downs", as well as "ups". "The Art of the Deal" was written before any downfall he had - but he did admit in the book that only once (at the time the book was written) did he do a deal without seriously considering the "downside". In that case, he ended up losing money on it. So, he doesn't always follow his own rules - but perhaps pays the price when he doesn't. (Sometimes, you can get emotionally attached to a deal, which can stop you from being objective.)

Re: How To Be An Entrepreneur - Without Risking It All!
 

Dien....Well, you HIT my "Hot Button" with this one.

You used the phrase that I have used for my entire life;

"WHAT'S THE WORST THAT CAN HAPPEN?"

When I got my first job out of College, working for General Elec Corp as an Industrial Sales Engineer...I soon discovered I had replaced a guy who had been working at GE for 30 yrs...and...to "save money from having to pay HIM a nice "cushy retirement package"...they could "save hundreds of thousands by getting rid of him BEFORE his "vested rights" kicked in....and hire ME at 1/4 the price.

Well...when I discovered this I wondered if "I" would be "let go BEFORE my "vested rights" would kick in.

So...when I saw 2 other guys in my office be "laid off" and replaced by younger people...I decided that, rather than wait for 30 yrs to see if "I" would be "let out to pasture PRIOR to MY vested rights kicking in"...I made a decision to "FIND SOME OTHER MEANS OF MAKING MONEY!...either with a new "job" of "starting my own biz".

I decided to Start Hunting for a way I could earn a living "WITHOUT BEING SUBSERVIENT TO or Under The CONTROL of...someone else!"...who...at THEIR WHIM...could choose to "REMOVE ME"!

I started feverishly looking thru every "Business Opportunity" program I could find...even though "I" was NOT an "entrepreneur"...in ANY shape or form. (Not one person in my family or anyone I knew...were "entrepreneurs" (someone who starts businesses))

And then...one day...in the "Dealerships Available" section of the Wall Street Journal...was an ad to be a dealer of a new kind of "Burglar Alarm System".

This product would call the police or fire dept when triggered by a sensor device.

So...because of my electrical engineering background AND...the fact I was living in a very "affluent" area of Chicago (THE North SHore)...I researched the amount of "Burglaries" and the businesses that were available to cover that "potential market"...and I reasoned..."HEY! I COULD FIT IN HERE!"

So...I bought the Dealership for the North Shore of Chicago for this product.

My FIRST explanation TO MY WIFE....AFTER...I had sent a money order for $1995 was...

"HEY! WHAT'S THE WORST THING THAT CAN HAPPEN?!

Well...she proceeded to LIST some of the possibilities of "what's the worst that can happen?

1) I could LOSE $1995
2) I could LOSE...lots of TIME trying to get "THIS" thing going
3) I could LOSE..."TIME" hunting for another "job"

She brought up a few more things I thought were "reaching"...but...I decided to go ahead and send my money....because I TRULY...wanted to be FREE from someone else controlling "My Destiny".

AND...I could STILL keep my "job" at GE until or "IF" I got my new biz started, so I was sort of "hedging my bet".

Well...I received the product and the Manual on "How To Sell Burglar Alarms" and proceeded to "work my butt off, in the evenings and on weekends, trying to get it going".

Everything I tried...failed...UNTIL...one evening...about 2 or 3 wks after I started setting appointments with homeowners...and "bombing out"...where I'd go home feeling "dejected"...when...BAMMO!...a dentist said, "LET'S DO IT!"...for $2500 for a System for HIS home.

WOWEE! COYABUNGA! I was on "cloud 9" (that's an oldtime expression for you young generation)

I then..."had to grab my ass with both hands" to figure out HOW to get the thing installed. (One of my "Rules" has been, "Sell It First"! If ya cain't sell it, why worry bout how to provide it?)

So...I found an "installer guy" (who became my Installation Foreman) who helped me get my first installation in AND...2 neighbors came over while we were installing and they bought a system and my business was ON IT'S WAY!

Thus...over the years...THIS PHRASE has been the mainstay of ALL the many ventures I have started;

'WHAT'S THE WORST THAT CAN HAPPEN?"

Again...thanks Dien for bringing up THESE WORDS....they are the BASIS to the success I've had in MY life!

Don Alm
http://www.midasreports.com
Some of my successful business programs

Re: How To Be An Entrepreneur - Without Risking It All!
 

Dien,

Thanks for bringing up Donald Trump and Deal making...

There have been some recent TV interviews and reads on Ivanka Trump that are also quite interesting...

With more than one reason to Keep an Eye on her... :)

When Ivanka's books on Deal making come out I'm sure they'll make for some very interesting reading...

Donald's daughter masters his art of self-promotion...
http://dispatch.com/live/content/lif...9.html?sid=101

On the Topic of Deal making...

If some haven't come across David Dutton in David Frey's newsletter or heard Ben Settle's interview with David Dutton...

Have a Listen to...
David Dutton’s Deal-Making Interview (42:30):
http://bensettle.com/blog/joint-vent...-the-internet/

Ben puts out some Great info...
http://www.bensettle.com/

One more Good read on Deal Making Skills...
http://www.sowpub.com/forum/showthre...ht=deal+making

Have you Noticed that Many Forums are getting extremely Quiet these days?

Trends are showing that Forum's need to consider Converting into their own Social Networking sites... But with the whole Social Networking thing... How many will actually survive?

http://www.techcrunch.com/2007/08/14...ocial-network/

Phil

The DEATH of forums.
 

Thanks Phil,

Sounds like the next manifesto type work...THE DEATH OF FORUMS.

http://www.im4newbies.com/internetma...-directory.htm

Spend a few minutes clicking on the list...and you'll find that MOST forums that existed when this list was made...are now DEAD.

And it will continue, I think there will be few forums left standing...and blogs will continue to multiply, but get less and less traffic.

NICHE NETWORKS... that have it all, including video interactivity within the "group"...on demand will be the future for some savvy marketers.

We'll watch Jay Leno as he works on that Vette, and ask him questions, he'll or one of his mechanics will answer...and then we can hit the button to talk to our pals at SUMMIT RACING and order the parts directly from a live "member" of the Leno Network. Jay gets a piece of the action from the suppliers in his Network.

NEVER???!!!!!

Wait, watch and see for yourself.

SOWPUB, however won't die...as long as there are two people left to yell at each other...we'll keep it on life support...HA!

Gordon Jay Alexander