Proposals That Close More Business
Do you struggle to close prospects that seem to be a perfect fit?
I met with a successful retirement-age business owner last week to discuss representing him in the sale of his business. His business provides specialty maintenance-type services to natural gas companies. As he shared with me the operations of his business, he explained that he doesn’t have written agreements with his clients. He said he learned long ago that written agreements just get in the way. All that’s needed is a gentleman’s understanding of the terms of service and verbal approval to start. Once you have this, begin the work and start billing. He said this way of doing business has served him well over the years, and he’s never encountered a serious problem.
As it turns out, I’ve been doing some reading, thinking and experimenting on the subject. Heck, problems arise even when we DO have strong written agreements, so why mess with them?
Customer agreements are misused and misunderstood. They shouldn’t become a barrier to doing business. For most businesses, they need not be filled with legalese nor require review by the prospect’s legal advisor. Goodness, no. Lawyers kill deals. Delays do, too!
Proposals shouldn’t be used to introduce yourself or your firm. Nor to gauge a prospect’s interest.
Similarly, proposals shouldn’t be spread out like trotlines. Writing and submitting proposals takes time away from what you need to be doing – talking to prospects, assessing needs, helping the prospects understand your unique abilities to deliver the results they desire, agreeing on the value you can deliver to them, and performing the work.
A proposal is not a “starting point” or a document that’s a “work in progress.”
I don’t even like the name “proposal.” “Agreement” is a better word.
A proposal is a clear and concise summary of what will be accomplished for the prospect and the value they will enjoy.
Yes, the proposal will become the main part of your agreement with the prospect, once they approve it. It will also be a document that you, they, and others can refer to as a guide for what is being done and what will be gained. It should be brief – no more than three pages at the very most using standard margins, spacing and font sizes. Preferably, a single page. It shouldn’t look “legal” but it should be clear and professional.
It should NOT contain any mention of your fees!
Each agreement should be 100% tailored to the subject project. It should NOT be written by a lawyer, and it should not be designed to provide unilateral protection for either party.
When the desire is to bring in more business and spend less time chasing prospects, you need to break down the barriers that lie between your prospects and the pen they use to write the check. Here’s the simple formula:
Your fees should only be presented AFTER you and the prospect have agreed on everything else. The agreement on your fees can be attached as an addendum. Here are some other suggestions for formulating proposals that close more business:
One great benefit of the “multiple options” strategy is to get the client to move from “who do I choose?” to “which option of yours do I choose?” For you, the proposer, it’s a choice of yeses.
Ask if he is ready to get started. Signing of the document and payment of the initial fee is secondary to getting started on the work. Once you begin, the agreement is basically in place. Or, at least that’s the way I suggest you handle it. Of course, the client will want to get the agreement finalized as well. And he will. If, however, you simply receive a check, don’t bother with the signature. Add to the proposal that payment for services constitutes acceptance of the agreement.
Are you skilled at getting new business booked? If not, there’s no better place for you to improve your skills. The people that close business enjoy the spoils.
Your industry does things differently? Well, maybe you can be a pioneer. Maybe a non-traditional method can be an innovation that helps you earn more business and grow faster.
By the way, the business owner-seller mentioned at the beginning of this article hired me to represent him in the sale of his business. We shook hands on it and got started immediately. I followed up with an email that documented our agreed-upon next steps and the agreed-upon compensation. He does not even need to respond to my email affirmatively. I trust him (or I would not do business with him) and what is most important is we get started. An oral agreement is a legally binding agreement. If, in the worst-case scenario, he tried to wiggle out of the fee, I have documentation of our agreement and will have ample documentation of the work I do on the project that will have clearly given rise to the business sale. I’ve worked in this manner with other clients and have never had a
I met with a successful retirement-age business owner last week to discuss representing him in the sale of his business. His business provides specialty maintenance-type services to natural gas companies. As he shared with me the operations of his business, he explained that he doesn’t have written agreements with his clients. He said he learned long ago that written agreements just get in the way. All that’s needed is a gentleman’s understanding of the terms of service and verbal approval to start. Once you have this, begin the work and start billing. He said this way of doing business has served him well over the years, and he’s never encountered a serious problem.
As it turns out, I’ve been doing some reading, thinking and experimenting on the subject. Heck, problems arise even when we DO have strong written agreements, so why mess with them?
Customer agreements are misused and misunderstood. They shouldn’t become a barrier to doing business. For most businesses, they need not be filled with legalese nor require review by the prospect’s legal advisor. Goodness, no. Lawyers kill deals. Delays do, too!
Proposals shouldn’t be used to introduce yourself or your firm. Nor to gauge a prospect’s interest.
Similarly, proposals shouldn’t be spread out like trotlines. Writing and submitting proposals takes time away from what you need to be doing – talking to prospects, assessing needs, helping the prospects understand your unique abilities to deliver the results they desire, agreeing on the value you can deliver to them, and performing the work.
A proposal is not a “starting point” or a document that’s a “work in progress.”
I don’t even like the name “proposal.” “Agreement” is a better word.
A proposal is a clear and concise summary of what will be accomplished for the prospect and the value they will enjoy.
Yes, the proposal will become the main part of your agreement with the prospect, once they approve it. It will also be a document that you, they, and others can refer to as a guide for what is being done and what will be gained. It should be brief – no more than three pages at the very most using standard margins, spacing and font sizes. Preferably, a single page. It shouldn’t look “legal” but it should be clear and professional.
It should NOT contain any mention of your fees!
Each agreement should be 100% tailored to the subject project. It should NOT be written by a lawyer, and it should not be designed to provide unilateral protection for either party.
When the desire is to bring in more business and spend less time chasing prospects, you need to break down the barriers that lie between your prospects and the pen they use to write the check. Here’s the simple formula:
Your fees should only be presented AFTER you and the prospect have agreed on everything else. The agreement on your fees can be attached as an addendum. Here are some other suggestions for formulating proposals that close more business:
- Do not include details about what you will do to deliver the benefits outlined in the proposal. The client should already trust you and be convinced you can deliver the desired results. You can talk about process, develop methodologies, and help them understand what you will do, but this does not need to be in the proposal/agreement. If the client has a need to add great detail in these areas then you have a trust problem. Spend more time helping them understand you, your firm, your experience, your capabilities, your commitment, and the process you will work. Then, explain that all the details will bog down the agreement, and that’s not good for anyone.
- Provide in your proposal three options for accomplishing what the client desires – one with a minimalist scope of services, one with a middling scope of services, and one with an extensive scope of services. For our merger and acquisitions advisory services, here are the three sets we provide for seller clients, in summary form:
- Analyze the business; provide an estimate of market price and terms; prepare summary offering documents; and then introduce the client-seller to three buyers that are a good fit. The client handles it from there. Of course, we don’t recommend this one!
- Analyze the business; provide an estimate of market price and terms; prepare best-of-class offering documents; select three top buyers candidates; and represent the seller in working with the buyers and closing a transaction.
- All of b above but instead of limiting the buyer work to three, we run a full buyer search; attempt to secure offers from ten buyers; and then work them all to maximize the sale price. The time required of our firm is much greater here, but it typically results in the highest sale price.
One great benefit of the “multiple options” strategy is to get the client to move from “who do I choose?” to “which option of yours do I choose?” For you, the proposer, it’s a choice of yeses.
- Identify and work only with the decision maker/ultimate buyer. The person that can approve the agreement and sign the check. Proposals to non-buyers are a waste of time, paper and ink. When a non-decision maker explains that you have to work with him, explain that your company policy prohibits you from working with non-decision makers. You are only able to work with decision makers directly. The reason is there is a lot at stake and you cannot risk miscommunication or errors that can occur by not working directly with the decision maker/person that will ultimately be judging the results.4. Establish and include in your proposal the project’s business objectives. Not deliverables, methodologies or “tasks to be performed” but objectives that will be accomplished for the client. Include the value to the client of completing each. The items can be for either the company or the person you’re working with (or both). For business seller representation, it’s a sale price or range of sale prices for the business.
- Include measures of success for the project. These are the things that you’ll both look to evaluate to see that progress is being made. For business sellers advisory, it’s x number of offers in x price range, and then a signed letter of intent with a qualified buyer in the target price range.
- Don’t deliver the agreement until everything that’s in it is agreed to between you and the prospect. Each time they ask for a proposal, drill down on the terms that need to be clearly agreed upon. Explain that once you agree on terms, you can deliver a proposal that contains the agreed-upon terms. When you have an agreement and they’re excited to get started and see the results, tell them the proposal will be on their desk, in writing, the next day. Make it happen. No need to present it in person –– they’ll need time to review it anyway.
- Include in the written proposal that agreement is contingent on agreement of the fees to be paid. When the client asks for the fees, tell him or her that you need to agree on what you will be doing before you can provide fees. Then, once they’ve reviewed the proposal and agreed to all the terms and said they want to get it going, provide the fee proposal, in writing, with an investment stipulated for each option (as described above). Include in your fee proposal ROI estimates for each option. Then, agree with the prospect on when you will follow up (after he’s had a chance to review the fee proposal), in the event you have not heard from him already.
Ask if he is ready to get started. Signing of the document and payment of the initial fee is secondary to getting started on the work. Once you begin, the agreement is basically in place. Or, at least that’s the way I suggest you handle it. Of course, the client will want to get the agreement finalized as well. And he will. If, however, you simply receive a check, don’t bother with the signature. Add to the proposal that payment for services constitutes acceptance of the agreement.
Are you skilled at getting new business booked? If not, there’s no better place for you to improve your skills. The people that close business enjoy the spoils.
Your industry does things differently? Well, maybe you can be a pioneer. Maybe a non-traditional method can be an innovation that helps you earn more business and grow faster.
By the way, the business owner-seller mentioned at the beginning of this article hired me to represent him in the sale of his business. We shook hands on it and got started immediately. I followed up with an email that documented our agreed-upon next steps and the agreed-upon compensation. He does not even need to respond to my email affirmatively. I trust him (or I would not do business with him) and what is most important is we get started. An oral agreement is a legally binding agreement. If, in the worst-case scenario, he tried to wiggle out of the fee, I have documentation of our agreement and will have ample documentation of the work I do on the project that will have clearly given rise to the business sale. I’ve worked in this manner with other clients and have never had a
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