How to Close a Business Agreement

Signing a business agreement signals the closing of the deal.

Closing a business agreement signals the end of business negotiations and the formalization of the requirements, arrangements and financial terms of a business transaction. Agreements can be made for the purchase of products, real estate, or services; to formalize a joint venture; to sell a business; or to establish a business partnership. The most successful business closing methods are based on agreements from key decision makers; they minimize objections to the business proposal through a process that maintains momentum towards closing the deal.

Instructions

The Art of the Deal

1. Draft a business proposal. Present the objectives of your business arrangement, the estimated value of the proposal, and the basic agreement framework. Provide sufficient information for analysis and a breakdown of key agreement elements. Consider obtaining a legal review from in-house counsel or an outside legal representative to ensure the language of the proposal is actionable.

2. Submit the proposal and determine any roadblocks for agreement. Solicit feedback on the proposal to establish points of contention such as pricing concerns, product limitations, or ongoing service requirements. Evaluate each problem addressed and establish any deal-breaking items. Present these items to your internal business management team for assessment.

3. Counteract any negative feedback or problems through a secondary proposal. Present a compelling offer, but ensure your own business requirements for revenue and profit would be satisfied under the new terms. Specifically ask for their agreement to the plan to maintain sales or agreement momentum.

4. Target decision makers for final agreement. Talk directly to the purchasing manager, executives or financial officers who determine whether the business agreement will move forward. For large deals, be prepared to solicit the help of your own executives or senior business management staff to help close the deal.

5. Sign the deal. Obtain signatures from officers with decision making authority from all partners to the deal. Ensure the document is legally binding through notary stamps and proper document processing procedures, especially if selling a business. Be sure the agreement includes a time line for delivery of products, ownership documents, or project outputs. Establish a follow-up process to ensure the agreement components are upheld and completed on schedule.

Tips & Warnings

• Submit your business proposal directly to a business decision maker, if possible, to speed up closing the deal.

References

• Geoffrey James: How to Close the Deal -- Perfectly
• Michael Stahl: The Culmination of Your Efforts- How To Close the Deal
• The Sloan Brothers: 5 Tips for Closing a Sales Deal