Improve Creative Thinking and Get Win-Win Deals

The best deals in business are win-win deals. Finding such deals requires thinking differently than the average person. If you are an entrepreneur or investor you’ll be more successful if you know how to Improve your creative thinking in business.

If you do an online search for creative thinking you’ll find suggestions like “re-conceptualize the problem,” “create psychological distance,” “surround yourself with blue.”  That may be fine for artsy people, but for entrepreneurs, investors, and all other business minded people, we need something more practical.  

Content

• When it Comes to Personal Finance, You’ve Almost Got It
• The ‘what if’ trick
• How the ‘what if’ trick improves creative thinking
• Experts on creative thinking
• How Creative Thinking Helps in Getting Win-Win Deals
• How to Improve Your Creative Thinking in Business – Example
• Creative thinking is more than just daydreaming
• Take a small step immediately
• Every What if Scenario Could be a Win-Win Deal

When it Comes to Personal Finance, You Almost Got it

I suspect most of our readers are well on their way in the construction of their bridge to financial freedom.  Chances are you are well aware that there is a better way to financial freedom than working for wages and you’ve been positioning yourself for success. 

As such, you’ve been reducing your expenses, increasing savings and you’ve been contributing to your 401K retirement account.  Most likely you have also established an investment account, where you have been investing in a few good mutual funds, and your nest egg has been growing.  This is great stuff! 

If so, you my friend are on the road to success and what you need to do is to take one more step in the direction of financial success. 

This next step is playing the game I like to call ‘what if’. This game will help you improve your creative thinking and help you find win-win deals.  Not only that, it will also boost your financial knowledge.

The ‘What If’ Trick

During my first job after college, I ended up sharing offices with a co-worker who was quite the character.  Everyone loved him, because he knew how to have fun, but he also got things done.  Despite having taken different career paths we remain good friends to this day. 

When I think of him, the one thing that stands out is his crazy ‘what if’ scenarios.  Whenever the office was too quiet, seemingly out of nowhere, he would break silence with a hilarious ‘what if’ scenario. 

He would say something such as ‘what if for some reason you decided to walk into the boss’s office and say “you know what, I think I can do a better job than you, so why don’t we switch jobs to see who is a better fit for the position?”   Then he would follow up with ‘what do you think would happen?’ 

And then he would keep going on with another crazy tangent such as “… and what if he actually said yes!? …What would you do?”

Most of the ‘what if’ scenarios were much more colorful than this. As you can imagine, the entire conversations were hilarious from beginning to end.  It was so much fun! 

This same concept can be applied to business and can help you get win-win deals

How the ‘What If’ Trick Improves Creative Thinking

I’ve continued to play the ‘what if’ game and I often play it with my wife and kids.  But, I mostly play it in my head and mostly pertaining to the possibilities of new businesses and investments.  In fact, this has been something I do even if I don’t have the money or expertise to execute the vast majority of my crazy ‘what if’ scenarios.

But even so, many of those ideas often end up scribbled on a piece of paper and sometimes result into an email, a phone call, and a meeting with a realtor or a seller.

Playing ‘what if’ has without a doubt helped me improve my creative thinking, which has ultimately helped me in finding deals others have overlooked.  And I am confident this will also help you unleash creative thinking. 

Even more, playing ‘what if’ is a way for you to invest in your most valuable asset, your mind.  In fact, every time you run through a business scenario, through a valuation, through a return on investment analysis, through a financing analysis, you are increasing your knowledge in a practical manner.  Indeed, the more knowledge you possess, the easier and faster it will be for you to find good deals and achieve success. 

Experts on Creative Thinking

When I was doing research for this article I spent some time looking for books on improving creative thinking.  Although there is a lot of psychological stuff out there, I wanted to find something about creative thinking from an investment perspective. Surprisingly, there aren’t a lot of truly practical resources out there on this particular subject. 

However, I did came across the book ‘No Limits: Blow the CAP Off your Capacity’, by John C Maxwell.  The book focuses on how our capacity is not set, but expandable.  Furthermore, an entire chapter is dedicated to creative capacity. Moreover, John Maxwell touches on the ‘what if’ concept and how it helps improve creative capacity.  So if a respected author on leadership and motivation recognizes the power of ‘what if’ thinking, this stuff isn’t just a game. Indeed this is a real and powerful concept that will help you improve your creative thinking.

In his book, John Maxwell provides the principles listed below.  So, as you consider this list note how the ‘what if’ concept adds value to these principles . 

1. Believe there is always an answer.  What if there is an answer?
2. Believe there is more than one answer.  What if there are multiple answers?
3. Believe that everything and everyone can get better. What if things work out perfectly?
4. Understand that questions help us to become more creative. What if? What if?
5. Become comfortable with half-baked ideas. What if this isn’t a terrible idea?
6. Become comfortable letting go of what was embraced yesterday.  What if there is a better way?
7. Ask creative people to help.
8. Give yourself creative retreats. Take the time to reflect.

What is a Win-Win Deal?

When thinking of win-win deals, most people think of Stephen Covey’s book, The Seven Habits of Highly Effective People. Covey’s habit 4, is known as ‘Think Win Win.’

This book goes deep into what ‘win win’ is all about. Suffice to say that a win-win deal is the type of deal where both parties are satisfied with the outcome of the negotiation.

Covey explains that thinking win win requires an abundance mentality. In other words, we need to feel there is enough for everyone and that we can gain more through cooperation, than through competition.

I love this way of thinking. And it goes hand in hand with creative thinking. This is because as we become deliberate about finding creative solutions, one of the things we do is explore things from different perspectives. More specifically, this can also means putting ourselves in the other party’s shoes, for the purpose of trying to find solutions.

Naturally, if we are able to see things from the other party’s perspective we will be better equipped to identify win-win deals.

The alternatives are less desirable outcomes such as win-lose, lose-win, and lose-lose negotiations. A win-lose outcome may sound appealing to some, but this is a shortsighted way of doing business.

The video below provides some additional information on Covey’s Habit 4, ‘Think Win/Win’

How Creative Thinking Helps in Getting Win-Win Deals

When I think of win-win deals, I am often thinking about buying real estate. And it has been my experience that a lot of times sellers are set on a traditional way of negotiating. And as a result of having set these barriers, sellers may not be getting the expected results, which can be frustrating for all parties involved.

But what if you could show the potential sellers that there are other non-traditional ways that may actually work better for the seller. When both seller and buyers are willing and able to think differently they’ll be more likely to find win-win deals that others may not have explored. However, the responsibility to initiate creative thinking and finding the win-win deal is on you. Thus, you have to have a habit of creative thinking long before you get to the negotiation table.

Months ago I was listening to a podcast, in which real estate guru Larry Harbolt shared some creative deal strategies. To some, these strategies aren’t new, but I am sure most people don’t know about them. But, what is more alarming is that even if people knew of these strategies they would probably not implement due to fear and lack of practicing creative thinking. These strategies pertain negotiating with a seller and are tailored to address the specific element of the negotiation that is most important to the seller.

1. Price is most important – In this case, a buyer can offer a full price, ask for owner financing using monthly payments and no interest.
2. Interest is most important – In this case, a buyer can offer less than full price, ask for owner financing and negotiate the interest rate and other favorable terms.
3. Some money now is most important – In this case, a buyer can offer a large amount of money now and no payments for a while, Then resume with payments at favorable terms.
4. Money now is not as important – In this case, a buyer can offer a lease option. This combines a lease agreement with the option of a purchase at a later time.
5. All cash now is important – In this case, a buyer can offer a full cash offer, but at a – lower price.

How to Improve Your Creative Thinking in Business – Example

Creative thinking can help you get win-win deals, but it can also help you find deals. When you think ‘what if,’ you automatically remove mental barriers. In fact, let me share a recent investment pursuit that I believe most people would not act upon, because the barriers were just too high.  Nevertheless, I pursued this possibility for the fun of it, but also fully aware that I would continue to tap into my creativity and gain knowledge from the experience. 

This ‘what if’ situation involves a large abandoned warehouse in a not very accessible, but busy area in Portland, Oregon.  Also, the property is in an odd place, depressed in elevation and between a highway and a residential area.  Despite its large footprint and location, I believe the average person driving on the highway doesn’t even notice it.  People like me on the other hand, are constantly looking and thinking ‘what if’, especially when an ugly building catches our eye. 

Indeed, my curiosity led me to the county website, where I hoped to find who owns the property and why it has sat there vacant and decaying for decades.  I learned the property used to be a fabrication facility for a private company that is still in business.  And doing additional research I also learned this company was founded by an immigrant that became a very successful entrepreneur.  Also, it didn’t take long to find the current owner is the son of the company founder, to learn the size of the land and the building, the assessed value, etc. 

I suppose many investing minded individuals, especially realtors, would easily go this far.  Still, I kept going.  I called the county and learned that a contractor had filed for a permit within the last 5 years.  So, in my head I said ‘what if,’ and I decided to give the contractor a call.  I found out what the intent was when the permit was filed and that a set of drawings is still available for someone to execute that earlier vision.  I also learned that the structure of what appears to be a decaying building from the looks on the outside, is actually very sound. 

Interestingly, the contractor also shared that the current owner owns a lot of other properties and that many of those properties are not being cared for. 

So I thought ‘what if,’ and called the owner. I tried various numbers and email addresses, but could not reach him. Then I emailed the owner’s son hoping to somehow initiate a conversation.  And that’s where things stand today, but I am not done yet.

Now, this may not sound crazy to you until you consider that even at a bargain price, this is a very expensive property, and I have no idea where the money would come from for me to buy it.  Nevertheless, I know that if a door opened for me on this investment, I would find a creative way to make something happen.

Indeed, what if I could pull off a lease option agreement or a purchase option?  In fact, there are many possibilities, as I could find other investors to partner with, or I could find a way to assign the contract to another investor and make a good amount of cash in process.  And keep in mind that I am aware of these possibilities because I’ve practiced creative thinking for many years.

Another big part of all of this is what to do with this property?  What if we (I don’t know who ‘we’ is, but thinking ‘we’ is very helpful in this situation) demolish everything and build a new apartment complex? If not, what if we keep the existing structure and convert the building into a self-storage facility?  In either case, what would the return on investment be?  

So yes, this property is a very unlikely scenario.  Despite this, for me, this is a fun way to keep learning and looking for deals where other people won’t. In fact, let’s not forget this owner has other properties and maybe, just maybe, one of those properties is a better fit for me. 

Creative Thinking is More Than Just Daydreaming

Granted, some may say all this stuff is just daydreaming.  I say absolutely not, but even if that were the case, I would argue that daydreaming could be a positive thing.

In the first place, consider most people have been taught what to invest in and how to go about investing.  Most of what is taught revolves around the idea than an investor needs money to make money.  However, this is a false, because all an investor really needs to make money is knowledge.  In short, most investors lack creativity.  As such, when it comes to investing, it is best to err on the side of creativity. 

Second, in any circumstance, a prudent investor is still required to understand the true value of the asset or investment and to understand risks.  Although we’ve been talking about creative thinking in the context of finding opportunities, creative thinking can also be utilized to identify risks. In fact, I believe creative thinking has also helped me develop an analytical mindset.  This helps me thoroughly assess investments before diving in. 

Last, I find most people are too afraid of making a bold move.  In that case, a little creative thinking can be a small step in the direction of a bold move. 

Take a Small Step on How to Improve Your Creative Thinking

Thus, to encourage you to practice creative thinking let’s look at two cash flow investment possibilities. In the first place, let’s look at websites and apps.  One website I use for this purpose is Flippa.com. 

To start with, click on the Websites tab on the top left.  Then, click on the ‘SEE ALL WEBSITES’ button on the top right corner.

Now, set up the filter on left side of the page.  In this scenario I filtered for slightly profitable iOS Apps.

Now, pick an app that looks interesting and start thinking creatively.  What if you could find someone to help you evaluate it this app?  What if you could get it for a really good price?  

For this example, I clicked on the third property. Next, study the financial information and try to understand how this app’s cash flows.

Now, let’s look at the second suggestion, which involves searching for real estate properties. One website I use often is Loopnet.com. 

First, click on the advanced search link shown under the ‘Search’ button.

Next, set up a filter.  In this scenario I filtered for multi-family properties under $1,000,000, in New Mexico, and with a cap rate between 5% and 10%.  

Now, pick a property that looks interesting and start thinking creatively.  What if geographical location wasn’t a constraint?  What if you could partner with someone?  

The third property looks interesting. This listing has a lot of information. But don’t let that bother you.  Learning all of this is part of the process, but you don’t have to learn it all at once.

Every What if Scenario Could be a Win-Win Deal

The bottom line is that if you want to maximize your potential for finding win-win deals you must be more creative than the competition. Thus, you’ll be significantly more successful if you know how to Improve your creative thinking in business and in general. The ‘what if’ concept we discussed here will remove mental barriers and will allow you to see opportunities others haven’t seen.

In addition, I encourage you to start immediately.  Always keep in mind that every new ‘what if’ situation should be a learning opportunity.  Recall that a voracious appetite for learning is key to success.  What’s more, every new ‘what if’ situation has the potential of resulting in a new lead, a new relationship, or even a deal. 

Last, imagine that you could play this game with a friend, or another investor?  Indeed, that really sounds like fun and it is likely to produce amazing results.  So, if you want to share with someone, I’d love to hear about some of your craziest pursuits and about how some of those pursuits may be preparing you for future deals.  

Moving Forward

We still have a lot of material to cover under financial knowledge, but we are getting closer and closer to evaluating investment deals. I think that’s where everything will start coming together. In addition, I hope you’ll discover evaluating potential deals can be a lot of fun.

As always, please drop me a note and let me know what other areas of business and finance you’d like to explore. Then I’ll write more about your suggested topics as we pursue knowledge, financial success, and financial independence together. In addition, you can also follow me on Twitter at @Cash_Keen