Go big like Buffett
This is an excerpt from Tom Searcy's upcoming book, "How to Close a Deal Like Warren Buffett - Lessons from the World's Greatest Dealmaker," written with Henry DeVries and published by McGraw-Hill.
(MoneyWatch) Warren Buffett is not afraid to go big. Back in 1986, he acquired the Scott Fetzer Company, a collection of 22 separate businesses. Scott Fetzer produced everything from Ginsu knives and the World Book encyclopedia to Kirby vacuum cleaners and Scot Laboratories' cleaning products. The deal was one of Warren's largest up to that point, and it has well exceeded his high expectations. "We paid $315.2 million for Scott Fetzer, which at the time had $172.6 million of book value," Warren wrote in his 1994 letter to Berkshire shareholders. "The $142.6 million premium we handed over indicated our belief that the company's intrinsic value was close to double its book value."
In the first 13 years after Warren made the deal to acquire Scott Fetzer, it netted more than $1 billion for Berkshire.
You may be asking yourself, so how can I land a deal like Buffett?
We've asked salespeople around the country this question: "Are you going to sell a big deal this next year?" A common answer is, "I hope so. I hope the opportunity comes along soon." Your big Warren Buffett kind of deal will not just "come along." You'll have to work to make it happen. You'll have to push your own envelope. Landing this kind of big deal requires a major shift in your selling approach. It also requires that you solve different problems from the simple one of "declared need = demand."
But relax. We're not going to suggest that you move from real estate to medical equipment or from advertising to technology. However, we will be suggesting that you adopt some new concepts and principles of selling.
Making a Warren Buffett-size deal requires:
1. Working with a large number of people from the prospect company
2. Developing a solution and a message that have an impact on the entire company, not just one department
3. Enduring a long and often complex process
4. Selling to a prospect at the CEO or VP level with new attitudes and ideas
5. Gathering a team to work with you and attend meetings with prospects
6. Producing an opportunity that you make for yourself instead of waiting for the "right" opportunity to come along
If your current method of deal making includes the things in this list, then you're all set to land that big deal a la Warren Buffett. If not, you can start changing your process with the principle that you have to solve bigger problems for bigger people.
Here are some easy first steps to take:
1. Identifying your prospect or prospects
2. Knowing your prospect's biggest problems
3. Pitching to the highest-ranked people in your prospect's company
4. Developing a solution for your prospect's biggest problems
With the implementation of these strategies and tactics, you can begin to go big like Buffett in all your deals.