If a friend owes your business money and they’re not repaying that debt, you may feel somewhat reluctant to press for your money back. Somehow it seems wrong to put money before friendship.
However, the greatest threat to your friendship is actually not recovering your money. After all the life blood of your business is cash-flow and starved of cash everything you work so hard to build could come crashing down around your ears.
Hence, by not repaying their debt your friend is the one whos setting both your business and as well as your relationship up to fail.
Be that as it may you probably still feel reluctant to chase a friend for money. If that’s the case you’ll be delighted to hear there’s a quick and easy strategy to recover your money and preserve your friendship.
So if you find yourself in this position, the first thing you must do is either in writing or in person speak your truth. Simply say something along the lines of…
“I value our friendship and would do nothing to jeopardize it. However, now that my business is going through a tight spot not asking you to repay the money you owe me puts both our friendship and my business at risk. And because the last thing I’d want to happen is for us to fall out over money I’d be most grateful if you could settle your account by the end of this week.”
As long as you say this calmly and empathetically no true friend would begrudge your request for payment.
Having made this request, one of four things will happen.
Obviously the best outcome is for your friend to pay what’s owed. Not only is this good for your business it also demonstrates your friendship is actually worth something.
The second possible scenario is that your friend confesses that they’re so strapped for cash that they don’t have the means to settle their debt. In this instance while it’s fine to feel sympathetic the harsh reality is they’re putting themselves before your friendship.
The third possible scenario is where your so called friend either tries to pull a guilt trip or instead blows a fuse. In either case they flat out refuse to pay. Now while this may come as a shock they have in fact done you a huge favor. They’ve made it perfectly clear that the only reason they pretend to be your friend is to exploit your good nature. So at least you now know where you stand.
And the fourth possible outcome is that they promise to pay but subsequently don’t. Once again by breaking their word they’ve demonstrated that your friendship is worthless. What’s more they’ve also revealed that they’re also in serious financial strife.
In each of these last three outcomes it’s clear that you’re not going to get your money back on your own. To recover your money and protect your business you need to refer your debt to an external debt collection agency.
Having accepted the fact that you need outside help all that remains for you to decide is whether or not you want to minimize damage to your friendship.
If you want to extend some leniency towards your friend then you should definitely engage the services of a collection agency that provides a “Velvet Glove” phase of recovery. With this style of recovery the collection agency works along side your debtor to recover the debt within 30 days using a respectful, assertive yet inoffensive approach. Significantly, should the debt be settled within this 30 day window neither you nor your friend will be penalised with collection agency commissions. Using this approach, if your friendship means anything to them they’ll do what ever it takes to settle their debt within in this 30 day window.
If however despite this “Velvet Glove” approach they continue to default on payment OR they commit either of the last two scenarios above then they’ve forced your hand to take immediate and aggressive steps to recover your money. Let me be very clear… under these circumstances they’ve declared your friendship over and they really don’t care if you and your business sink. As such you need to hit them hard with whats known as an “Iron Fist” approach whereby your debt collection agency goes straight for the jugular.
Now this may all sound harsh but at the end of the day you’ve done nothing wrong by asking for your money back. After all, it’s rightfully yours. No true friend would ask you to put your business as well as your friendship at risk over money.
To help you recover bad debts from friends who won’t pay The Debt Doctor’s debt collection blog reveals where to find debt recovery agencies that provide “Velvet Glove” and “Iron Fist” debt recovery.
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