“Key Insights from ‘The Art of the Deal’ by Donald Trump: A Book Summary”
In “The Art of the Deal,” former President of the United States Donald Trump reveals his biggest secrets about his personal and professional worldview. It is a classic eye-opener into how America’s foremost dealmaker gets his businesses done.
What's Inside.
1.Following your instincts can make a 1 huge impact in your life and the success of your enterprise
2.The elements of the deal; Donald Trump’s style of making deals
3.Donald Trump’s childhood influenced his behavior and blunt approach to life
4.The Swifton village: a huge return on a short-term investment
5.Reviving the Commodore in the heart 5 of New York at 42nd Street and Park Avenue
6.Knowing what to invest in is essential 6 to the success of any individual or organization
7 Conclusion
Description
In this book summary of “The Art of the Deal” by Donald Trump, we delve into the core principles and strategies outlined by the former President and business magnate. This summary provides concise key takeaways from the book, offering readers a clear understanding of Trump’s approach to deal-making, negotiation tactics, and the mindset behind his success in various business ventures. Whether you’re interested in business, entrepreneurship, or simply curious about the strategies employed by one of the most prominent figures in the business world, this summary will provide valuable insights without the need for an in-depth read. Explore the art of the deal with this insightful summary and gain knowledge that can be applied to your own endeavors in the world of business and negotiation. This summary contains how.
Following your instincts can make a huge impact in your life and the success of your enterprise.
Believe in yourself and your tactics, and assess the degree of competition. Take precautions and stick to your original intentions as much as possible. Although being adaptable is essential for success, there are instances when it is important not to allow even the slightest uncertainty to enter your thoughts.
“The best winners aren’t those who succeed, they are those who refuse to be defined by failures.” — Donald Trump
Prepare yourself for what is about to happen next. If you were hoping for a nice journey, you were mistaken. The reality is far from what you had imagined. When circumstances take an unexpected turn, having a laid-back attitude might backfire on you since you won’t have all of your weak points covered. You have no control over what the market does, and you have no way of preventing things from going bad. As long as you’re prepared to win some and lose some, you’ll be able to conclude deals that would boost your business career.
As a result of his controversial approach to life and business deals, Donald Trump has always been both criticized and applauded. His techniques are seldom foreseeable, indicating that he is an unpredictable individual whose behaviors cannot be predicted in advance.
Donald Trump describes his early life and work in this autobiography, from creating low- and middle-income homes with his father to developing premium units for business moguls. In this tidbit, he lays forth some of the principles that influence his business choices, as well as how they manifested themselves in the transactions that shaped his early career.
In this summary, you’ll learn about the essential factors of negotiating a successful contract.
The elements of the deal; Donald Trump’s style of making deals
Donald Trump’s method of making deals is quite simple. In every deal, he aims high and keeps pushing till he gets something proportional to what he wants. As simple as this may sound, not everyone is capable of making deals using Trump’s methods.
Deal-making is an ability you’re born with; it’s in the genes.
Besides having the instinct, you also need to have the courage to follow your instincts. There are people somewhere out there with the potential to do greater things, but don’t, because they lack the courage to try.
You might never know your true potential until you try to push beyond your abilities.
Think Big
Everybody thinks, but very few people think big. According to Donald Trump, if you are going to think, think big! People are often limited in their thoughts because of fear, they are scared of growth, success, making decisions, and winning. Trump is the direct opposite.
Know Your Market
The importance of knowing your market can’t be overemphasized. You need to know what you have to offer, and who wants what you got.
Use Your Leverage
When making a deal, each man will constantly be searching for signs of desperation. This is because he knows that once this happens; the guilty party will be dead. When making a deal, don’t allow the buyer to perceive you as desperate.
Fight Back
This step is not meant for everyone because you could end up making a bad situation worse. It is very important to keep a positive mind at all times, but at times, you will be left with no other choice than aggression.
Deliver the Goods
Conning people is extremely bad for business. Often, people will fail to catch on to your lies on time, but if you want to build a business that will last, you will have to deliver the goods. In the business world, your word is your worth.
Donald Trump’s childhood influenced his behavior and blunt approach to life
According to Donald Trump, Fred Trump, his father, had the most influence on him when growing up. He taught him toughness in a very tough business environment, he learned about competence, motivating people, and efficiency.
Fred’s mother, Elizabeth, worked as a seamstress to support her 3 children. The oldest, named Elizabeth, was 16 at the time, John, the youngest, was 9. Fred was the middle child, the first son; he was the man of the house.
Fred Trump was born in New Jersey in 1905. His father lived in Sweden as a child, an downed a successful restaurant, but he was also a hard drinker.
In 1936, Fred Trump married Mary MacLeod, and they began a family. When Donald Trump turned thirteen, his father decided to send him to a military school. Beginning in the eighth grade, he went to the New York Military Academy in upstate New York. In his senior year, he was appointed a captain of the cadets.
Trump learnt everything he knows about the business world from his father. At an early age, he built rent-controlled and rent-stabilized housing in Queens and Brooklyn. Still, he desired faster money, so he went into a different type of business. He wanted to make his own mark, he did not want the world to simply regard him as Fred Trump’s son.
Most individuals who have the instincts never realize they have them because they lack the confidence or luck to realize their potential
Trump’s interest in business began at a young age. Unlike the others around him, he questioned his father’s beliefs and opinions, which gained him respect.
Trump was always interested in business and was never frightened by his father.
“My style of deal-making is quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.”-Donald Trump
Trump believes in containing the cost and spending only when necessary. When he attempted building low-income homes, his focus was on building quickly, inexpensively, and adequately. He wanted the building completed so he could begin renting out. In this case, he spent what was necessary.
Trump learned from his father that pennies turn into dollars. As a result, he is conservative with his spending.
The Swifton village: a huge return on a short-term investment
When Trump got to college, he kept studying the listings of Federal Housing Administration’s foreclosures. To his colleagues back in college, this was abnormal. It was strange for a college student to be studying federally financed housing projects in foreclosure, but that was what Trump spent his time doing in college. In time, his studies paid off, he came across Swifton village.
Swifton village was Trump’s first big deal, it was a 1200 unit apartment development project in Cincinnati, Ohio. There were 800 empty flats, the developers had gone bankrupt, the government had foreclosed, and the whole project had been a failure. All these circumstances lined up as a great opportunity for Trump.
After negotiating the deal, success was left to management and marketing. The challenge was now to get the place rented to good tenants.
“I don’t hire a lot of number-crunchers, and I don’t trust fancy marketing surveys. I do my own surveys and draw my own conclusions.”-Donald Trump
Trump spoke to his father, and the building was bought at less than half the price. Once they finished refurbishing the building, they had to begin managing and marketing. They ejected the old tenants who refused to pay their rents and beautified the complex in order to attract paying tenants. To give the building a sense of class, they fixed white shutters for windows. They also ensured that the building is kept clean at all times.
The real estate market is constantly evolving, and when there’s a downturn, cleanliness becomes a major value.
Trump and his team completely renovated the building and its surroundings. They then published ads in newspapers, and within a year, the building was filled with paying tenants. After a couple of years, the houses were put up for sale, and sold for double the buying price. This was a big win for the Trumps and the first personal win for Donald Trump.
Did you know? According to Forbes, as of 2021, Donald Trump has an estimated net worth of $2.9 billion.
Reviving the Commodore in the heart of New York at 42nd Street and Park Avenue
Bringing the Commodore back to life is definitely one of Trump’s major accomplishments as a businessman. The transformation began in the latter months of 1974 when Trump asked Victor Palmieri if he could buy any of the properties owned by Penn central for free. At the time, Victor Palmieri was in charge of selling the company’s profits. He responded to Trump’s question by showing him a couple of hotels.
Penn central owned several hotels within a few blocks from each other. They owned the Biltmore, the Barclay, the Roosevelt, and the Commodore. The least successful hotel was the Commodore-the hotel Trump went for.
“In negotiations, knowing how to leverage a situation can help you achieve what you want.”
Trump learned of another project via his contact with Palmieri: the Commodore Hotel on 42nd Street and Park Avenue. Half the buildings were already in foreclosure.
The struggle to make the commodore deal kept going back and forth. Trump kept Penn Central believing he was their best bet (leveraging), while simultaneously postponing cash payment.
In the late fall of 1974, Trump began talking seriously with Palmieri about a deal. Eight or nine months before, Penn Central had invested $2 million on a renovation of the Commodore. Even after the renovation, Penn Central was projecting a huge loss for 1974. The Commodore was a terrible cash drain on a bankrupt company.
As time went on, the Commodore kept causing Penn central more and more money. Due to the high losses the company suffered that year, they drafted a deal that offered Trump the hotel for 10 million dollars, subject to his ability to get tax abatement, financing, and a hotel company partner. The only problem was Trump was still unwilling to put down the required $250,000 for an exclusive option on a deal that was still a long shot.
Fortunately for Trump, the Board of Estimate granted him tax abatement. The tax abatement has saved Trump tens of millions of dollars. However, banks were still unwilling to loan him money.
In time, Trump was able to obtain financing from two institutions. He renovated the hotel by placing a curtain wall of highly reflective glass, and in September 1980, the Grand Hyatt, formerly known as Commodore Hotels, opened. From the day of its opening till date, it has amassed an annual profit of above $30 million.
Knowing what to invest in is essential to the success of any individual or organization
Late in the year 1975, Trump was driving in his car when a news report on the radio began playing. According to the reports, hotel employees in Las Vegas, Nevada, had just voted to strike. This strike caused the stocks of the company to fall.
The fact that their stocks fell stunned Trump and he began to investigate. This was a
company that owned 150 hotels worldwide, but they lost 40% of their stocks simply because 2 companies went on strike.
This made Trump develop an interest in the Casino business. In the following year, an attempt was made to legalize gambling in Atlantic City. The referendum was passed in November 1976 and was signed into law by the middle of 1977.
“Trump’s main concerns regarding legalizing gambling in Atlantic City were time, cost, and location.”
This made the cost of land in Atlantic City rise tremendously. It was not until 1980 that Trump got a favorable deal. Despite the delay, the timing was in his favor. At the time, things were tougher, people were less enthusiastic about constructing casinos in the area, and the most recent casino ventures were in numerous financial and license related problems.
Trump was offered a two-and-a-half-acre piece of property which was placed in the center of the Boardwalk. The location of the building was very favorable. Trump found it very easy obtaining financing, architectural approvals and licensing as a casino operator.
On March 15 1982, Trump was licensed along with his corporate identity, The Trump Plaza. In June, 1982, Trump was made an offer by a man named Michael Rose, he was the chairman of Holiday Inns. He offered to manage the hotel if Trump built it. He put 50 million dollars upfront for construction and a couple more benefits. Trump took the deal.
“Much more often than you’d think, sheer persistence is the difference between success and failure” .-Donald J. Trump
The construction budget was worth 222 million dollars, and Holiday Inns paid 50 million upfront. They also guaranteed a loan of 170 million. The casino was opened on May 14, 1984. The casino earned a gross profit of $35 million before interest, taxes, and depreciation the following year.
Conclusion
The most misunderstood concept in all of real estate is that the key to success is location. Usually, this is mostly said by people who have no idea what they’re talking about. First of all, the best location is not necessary. What you need is the best deal. With the right type of leverage, you can enhance a location, through psychology and through promotion.
The art of deal-making, according to Trump, is not dependent on IQ. You could be the smartest kid from Wharton, but as long as you don’t have the instincts to remain successful, you will not be a successful entrepreneur.
Business is about two things, buying and selling. It does not matter if you have the best products or the best gadgets, as long as you are not buying or selling, you are failing. To prevent this from happening, you have to get the word out, let people know that you are offering better options and services. When you are able to market your business as well as yourself, it will become easier for people to trust you to deliver. Getting people’s trust is also essential, and once people trust you, you mustn’t disappoint them.
Donald Trump has successfully built a business and a brand that targets a specific set of people. This strategy is worth emulating. Finding your target audience is crucial to your business, and doing so requires patience, intelligence and expertise.
Try this
Protect yourself by being flexible. Do not get too attached to one deal or one approach. For starters, keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first. Also, once you have made a deal, always come up with at least a half dozen approaches to making it work, because anything can happen, even to the best-laid plans.