Sales is either the toughest job in the world or the easiest, depending on who you interview first. The successful dealmakers will tell you it depends on energy and attitude. The less successful will tell you it depends on luck.
Like most things, the truth is somewhere in the middle. But one thing all sales people will agree with is closing a deal is hard work before anything else. If you are a small business person, you might be surprised at all the opportunities there are around you to engage in the art of negotiating, selling and dealmaking in order to benefit your business. Like the man once said, they’re out there waiting to give you their money. Are you ready to take it?
First Thing in the Morning
To be successful at closing deals, you have to learn to put a time limit on everything. From the first term sheet to the last installment payment, you need to be on top of the time situation over everything else.
The rule is that time always benefits the seller in any deal. The buyer is double hamstrung on time. Their first problem is the deal might get bought out from under them. Their second problem is the seller might get impatient and either change their mind, change the price or lock the buyer out.
As the dealmaker, you have to get the buyer to the table and then get them signed. So your job is to put a third ticking clock in the room, and that is your deadline for getting to the next step. Always have a deadline due in a business deal, or it won’t go anywhere.
Never Lead with Price
You know what you’re willing to accept in payment for whatever it is you are offering. Like your hole cards, you don’t reveal this information unless required to. You should never be the one to state the price ahead of time. Let the buyer talk themselves into a higher price. For all you know they’re willing to offer twice what the deal is worth up front. You would probably take that if offered, so don’t sabotage the offer by handing your counterparty a 50% off coupon.
Remember also any buyer who leads with price or starts hammering you on price before discussing the general points of the deal is broke. It’s up to you whether you continue negotiating with a buyer who has no money.
Advance to Finance
Having a premium quality financier standing by in the event you are only this many dollars away from closing is always a good idea. If you need financing, you can always fall back on your advisors. If your counterparty needs financing, you could consider directing them to your resources. Not only would this improve your relationship with your financial institution, but it could also become precedent for future deals which you can self-finance if they meet certain criteria.
Get Everything in Writing
Unless you are haggling over the price of a used lawnmower, get everything you negotiate in writing. Every point you agree to, no matter how insignificant it might seem at the time must be documented. The reason for this is simple. Deals are like sharks. The moment they stop moving forward, they drown. If they go backwards, that means they’re being hauled on to a fishing boat to be eaten.
Your deal is the same way. Getting everything in writing means your counterparty can’t unravel the whole process and start over. The best they can do is move one step back and try again with whatever is currently being discussed. This is more important than all the other advice you will ever get. Make sure everything is in writing.
Learning to close is a skill that takes a lifetime to master. This is something that just can’t be rushed. Always remember the first rule of selling. Every great deal starts with “no.”
