There are a number of things that we, as humans, universally dislike:
Visiting the in-laws (obviously), traffic, lukewarm coffee and the Collingwood Football Club all ranking highly in the hate stakes. Chief amongst these, however, for anyone that has ever run their own business, is asking for money from clients.
It’s just downright… awkward.
What We’ve Found
In our travels, we’ve found a lot of small to medium business owners on the one hand that love the concept of Late Payer List, especially the fact that it helps redistribute power back to the business owners and helps them improve their credit control and debt collection practices.
On the other hand, however, there’s some people that are stubborn and question whether asking for money from clients who are late to pay – cash that is actually theirs – is the right way to go about it.
One example of this is of a small business we’ve encountered that, despite being only months into its infancy, is owed a considerable amount of money. In fact, more money than most people see in a year – well above the average Australian’s wage. This small business was recommended to use Late Payer List to get on top of their cash flow problems but, replied with, ‘it’s not our way of doing things’.
A small business that is doing everything it can to survive except the most important thing: actually getting paid?
Why Is This the Case?
Rightly or wrongly (actually… all wrongly) asking for money is a desperate act. It’s like you’re the proverbial Oliver holding out your bowl and asking for food from your master.
It also dredges up a whole heap of questions and anxieties about one’s worth: am I good enough? Do I actually deserve this money? Will my clients be using me again if I come across as demanding?
Being Seen as The Good Guy
Small business owners want to be seen as ‘the good guys’. It’s how they think that they’ll incite some form of repeat business. And asking for money is kind of the opposite of being the good guy.
What’s more, it’s incredibly difficult to go from a business that is doing everything to please its clients, to becoming a demanding payee – drawing a line in the sand and demanding money can be a tough transition for a lot of small business owners to make, despite being a necessary one.
In essence, there is clearly a stigma attached to asking people for money owed. And it’s something that small businesses need to get over if they are to thrive.
So, What Can You Do About It?
Ramit Sethi does a good job of breaking up the process of asking for money into two sections:
- Asking politely
- Asking firmly for payment
Involved in asking politely, he says, is to send clients prompt payment requests. Once the job is done, explain to your client how they can settle the account and by when. If that doesn’t work, send a follow up email.
If that doesn’t work, it’s time to ask firmly. And this can be where Late Payer List comes into the equation.
Rather than pick up the phone and/or employ the services of overpriced debt collection agencies, Late Payer List is the perfect way to become more demanding of your late payers without going over the top. It’s the gentle prod, the ‘nudge-nudge’ clients sometimes need.
And it helps you ask for payment without the anxiety.