Episode 190: How To Close the Deal with Corey Kupfer
After finding the deal, structuring it, doing due diligence, and possibly a lot of negotiating with the counterparty, the most awaited part has arrived: closing the business deal. Whether you’re a first-time business owner or already experienced one, there’s always room to learn new approaches for getting deals closed. In this episode, I’m going to discuss some high-level but fundamental things you need to know to get your deals closed.
Do Not Close The Deal In Your Mind
One of the first mistakes that people make is closing the deal in their minds when it is not closed in reality. Just because the negotiation has been done, a letter of intent has been signed and things seem promising, it is not time to be careless. Before you ”close the deal in your mind” pay attention to these items.
- Your due diligence is clear: make sure there is nothing the other side could find to ruin the deal. Check out the last episode about this topic for more information.
- Keep your eye on the prize by providing the information to the accountable professionals on time. People who work with you need to have all the information in advance to ensure that everything goes according to plan, so you don’t risk legal exposure and damages.
- Put effort into reviewing the agreements with your attorneys, the financials, and other key due diligence items; do not risk missing any clause in the contract due to lack of care.
The Risks Of Checking Out Before Closing The Deal
- The counterparty may ask to renegotiate some terms. If they see you want to close the deal, no matter what, they can use it against you and diminish your benefits from that deal.
- You don’t get the deal done because you have lost focus. Work with your team to make sure you are responding to the information request, doing the diligence check, and being available to resolve the inevitable issues.
Watch Out For Your Ego
When you are close to closing a deal, the counterparty may raise problems and create misunderstandings between the two of you. This type of moment requires a calm mindset: do not let your ego get in the way of a good deal. Keep your emotions out of it and trust your gut.
That doesn’t mean that you have to do the deal. It’s important to be sure you can trust them, especially if it’s an ongoing partner. Maybe you realize that you’re not the ideal partner, or something may come up that goes against your principles. The way forward is to watch your emotions and reactions to make sure you’re clear-headed before giving up on a deal for good.
Align When Third Parties Will Take Part
The decision of when you or your counterpart should introduce new parties into your organization requires balance. Consider carefully how the insertion of additional parties into the business will be viewed by your counterparty is key, even before closing the deal. Balance the need to continue to operate the business and make good business decisions and how it might impact your potential deal All relevant people on your team also need to be aligned with this knowledge, so they can organize tasks in the best possible way. If this is not defined, it may adversely affect getting the deal closed.
A fundamental negotiation principle is getting total clarity on exactly what’s acceptable to you in the negotiation. If you do not know your deal’s goal, anything - such as economic issues or if a key employee leaves - can rock the stability of your business and prevent you from closing the deal.
Concentrate On The Pre-Due Diligence
A lot of deals fall apart in the due diligence phase. One of the best ways to prep and make sure deals get closed is through pre-due diligence. A tip is to focus on who your buyer is and do the due diligence accordingly. For example: if somebody is making an investment in your company, your professionals (investment bankers, business brokers, consultants, attorneys, and accountants) should know what kind of due diligence (such as friends and family, angel, private equity, or venture capital investors) is going to want, and you should work with those professional in advance to ensure that you are fully ready for all due diligence requests.
The Deal Checklist
As a final piece of advice, do not let the momentum die down, ensure that stakeholders and other professionals are aligned with all aspects of the business, so they do not lose interest. Loss of momentum or interest can cause a potentially great deal to be lost.
Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.
If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!