Don’t Be Afraid… It’s OKAY (If Not Detrimental) To Collect Payment!
Ever ‘brushed something under the rug’ simply to avoid an argument? Don’t want to deal with the hassle? The conflict?
We’re all guilty of it… Nobody likes conflict!
That’s why the number one reason trade business owners don’t collect outstanding payments is because they’re afraid. Afraid of conflict!
They just don’t want any trouble with their clients!
Some are scared that the client will kick up a stink and ultimately leave them… then they’ll never get their money and they’ve lost a customer.
However, you need to keep in mind that you’re running a business, a business that needs cash flow (customer payments) to continue running. And ultimately, that’s YOUR hard-earned money!
It’s time to realise that there’s IMPORTANT reasons why you shouldn’t think twice when collecting debt…
1. Debts Can RUIN Your Cash Flow
Outstanding customer payments can cause your cash flow to destabilise.
The bills will pile up you won’t be able to keep up with expenses, and ultimately, it could lead to business failure!
A continuous and steady (stabilised) cash flow will help your business operate (and continue to!) in optimum condition!
2. Failure To Take Action ASAP Produces BAD Results…
It can become even more difficult and time-consuming if you delay collecting your debt!
In our own plumbing business, we collect payment from Residential clients upon completion of the job payment via credit card or cheque at the end of each job.
For Strata clients who have accounts with us, we call them and send multiple reminder letters until their account is paid. If it is still unpaid, we then escalate it and turn to debt collectors and lawyers.
(For more information on this process check out our Debt Collection Mastery which goes into detail the EXACT steps we took to get our outstanding customer payments down from $200,000 to $10,000. Including letter templates! CLICK HERE to check it out…)
If we did not start this payment process a) upon completion of the job for residential and b) the day after completion of the job for strata… it would take us WAY LONGER to collect payments than it already does!
AND the longer the payment goes unpaid, the less chance there is of you getting the full amount due or even any of it!
3. Customers Have Other Bills!
Don’t kid yourself by thinking that you’re your customers top priority when it comes to bills!
They’ve got a multitude of other debts to pay (electricity, food, water, mortgage, etc.) before they might even CONSIDER paying you!
Make sure you’re receiving payment upon completion of the works to ensure you are the priority!
If this is impossible… what can you do to make yourself stand out in the piles of bills on their kitchen bench?
Create a sense of urgency. Use bold red text. Coloured paper. Send multiple letters a week. Whatever it takes!
Don’t be afraid of confrontation! Embrace it!
The customer has employed YOUR services and understood when doing so that this would cost… So don’t be afraid to collect YOUR money!
Interested in learning more about your trade business financials? Come check out our LAST round of ‘Next Level Tradie’ events for 2018 in Brisbane, Melbourne, and Sydney!
On the day, we will be sharing the steps we undergo in our own plumbing business to master our money to maximise profits! CLICK HERE to grab your free ticket…