A reader asked about closing a deal in the business world:
KURTje said: “The marketing firm safely opened MANY doors for me. (Corporations quickly want/take your ideas) Rubbermaid expressed interest in my product. Rubbermaid wanted to talk to my patent attorney...my funds then & now are s.l.o.w. hence my issue.”
To someone who has never closed business deals it would seem that if you manage to get someone to express interest in your product, you are home free. Of course it isn’t like that at all. There are many pitfalls between getting someone interested and closing the deal.
First, you have to make sure that you are talking with a decision maker. Several years ago I was a speaker at an EEOC conference. I communicated with several government employees who told me that they wanted me to come to their offices to train their employees. After I spoke more to some of these potential prospects, I discovered that not all of the people attending the conference were purchase decision makers. The decision makers were back in the office. To close the deal you have to be talking to a decision maker with a budget. It is best if you are face to face with the decision maker when selling, as it is much easier for them to turn someone down on the telephone or via e-mail.
You will need to determine how the decision maker wants to be communicated with. You do not want to annoy them to the point that they decide not to purchase from you. The direct way to find this out is to call them or e-mail them and ask. “Is this the best way to get hold of you?” and “How frequently should I check in?” It is trial and error in the communication world these days. Some people respond to e-mails, some to telephone calls, some like to meet over coffee and some only respond to text messages. Keep notes of your contacts with the decision maker and determine which type works, then do that.
Once you are in communication with the decision maker, remember that the structure of the deal will be directed by the larger organization.
The next step is to determine what the budget is that the decision maker controls. Some people are authorized to spend $2,000 and some $2,000,000. You can normally find this out during a conversation with them, by talking about jobs or orders that you have had. This makes them tell about orders they have made. My business partner, Bob, always told the decision maker a range of costs and products that were being offered, and waited to see which one they were interested in. It is pointless to try to sell a product to someone who is not authorized to spend that amount of money.
Attorneys are often part of the process, but you have to make sure that you stay in the game. Do not allow your attorney to talk to their attorney without you and the decision maker in the room. We nearly had a big job sold a few years ago when the decision maker said that he wanted to run it by the company’s attorney, who was in a different state. He took our presentation and gave it to the attorney, without us present. Sure enough the attorney decided that they didn’t need to do the project. We should have gone along, even though we couldn’t afford it (credit cards now make this possible, though it is a risk.)
The difficult part for this reader is that he is out of funds to hire an attorney. Once again, you might solve this by talking with the decision maker. First determine if an attorney is really needed, or if it is just a formality or perhaps they are just checking to see if you even have one. If an attorney is needed, in this reader’s situation, it should be an Intellectual Property attorney, and if the decision maker wants the product enough it should be possible to structure a deal that will work for you. We had a large corporate client who required us to have “Errors and Omissions” insurance. The premium was over $6,000 per year. We didn’t have that kind of money free. As we discussed it with the decision maker, he decided that he would pay for our insurance out of his project budget. It is possible that in the situation under discussion, the client will be willing to pay for the attorney as a part of the deal. Alternately, you might see if your attorney is willing to structure a payment plan you can live with.
So now, you have interested a decision maker in your product, you have solved your attorney problem, you have a contract or a sales order. You are done, right? Of course not!
You still need to be paid. Once again, you will have to agree to be paid on their terms. The bigger the company, the slower they are at paying. Small firms pay in 2-4 weeks, mid-sized firms pay in 65 days and the really big ones often hold out for 90 days. One way around this is with credit cards. You can accept credit cards by setting up an account through an on-line service such as PayPal™ or Square ®.
If you can’t charge their credit card, you will need to make sure that you invoice or bill is in a form that the decision maker likes, and is sent to the correct person, at the right time. Once it is overdue, you politely contact the decision maker and mention that it appears to be overdue and ask if there is anything else you need to do. You never accuse the decision maker of being slow in payment; always act as if you have probably made a mistake. You may find that the invoice is traveling through the company; you can ask who has it and then call them. Politely chase your invoice through their system, often it is under a pile of things on someone’s desk and an administrative assistant can help you find it. Keep tabs on it and you will be able to get it paid.
Closing a deal takes patience and tenacity, but once you get the hang of it, the process can be fun, and profitable.