In business relationships, money is part of the equation. The thing to remember is that both parties are looking for value and trust. Your client may ask for discounts. You may want to be paid up front. Your client may need to settle old debts with you. These conversations don't have to be uncomfortable if you know where to start.
Here some tips for negotiating money with your clients.
Know Your Value
You are entitled to payment for your services. If you're concerned that you're asking for too much, for instance if your client is asking for a discount, you should have a clear idea or scope of what you're offering and how much the market rate is. Until you know exactly what you're pricing, you cannot know how much you can cut off the price.
Is your client offering any reason as to why they require a lower cost or need to settle their debt? Listen very carefully to your client. They may be going out of business and cannot afford the original cost of hiring your business. They may have a tight budget to work with. If you understand why they are hesitant to spend money, you may be able to work with them while being mindful of their limitations.
Break It Down
When a client is unable to pay what's owed to you in one lump sum, they may be able to break it down into smaller, more manageable payments. The same can be said for negotiating price or the cost of a project. If the client can only pay so much, perhaps the project timeline could be stretched out. The client can pay month-to-month or pay over time to accomplish the same goal.
The "walk away" can be pretty powerful during negotiations about money. In order to walk away, you have to know the value of what you're offering, the value of what you're getting and the value of your time. A potential client will realize that your price is firm and decide to go elsewhere or find the money in their budget to hire you. The walk away looks a little different to a client who is indebted to you and is refusing to pay. In this case, it means that you're no longer going to spend your time trying to get paid and instead, you're sending the account to collections or litigation. Often, the risk of facing a court of law is enough to encourage a client to pay.
If you've reached the point of the "walk away" from an unpaid client, Enterprise Recovery can help.
Contact us with any questions regarding B2B debt collections.