Nobody likes an awkward conversation. As tough as it may be, it’s hard to avoid difficult conversations when you’re in business. Here are some tips to help you plan ahead and ensure difficult conversations run smoothly and calmly.
Difficult conversation #1: A client hasn’t paid you
When you spend so much of your time working to attract new clients and looking after their needs, it can be awkward to have to chase a payment. It’s even more difficult for you if this late payment affects the cash flow of your business – so it’s worth taking kind but firm action early.
If a client hasn’t paid an invoice, here’s what you could do:
- Contact your client in writing. You could let them know their payment is showing up as overdue and ask if they need you to re-send their invoice for payment. Be calm, professional and clear about the situation.
- If you’ve already let them know their payment is late and they haven’t taken action, you may need to send them a letter of demand.
- Establish a clear process to follow up with any non-payments as soon as possible. You could consider whether you need to credit-check clients before allowing them credit, or have a deposit or part-payment system in place for all clients.
For more tips, see ‘Common business disputes and how to handle them’ on our blog.
Difficult conversation #2: Disagreements between business partners
Going into business with close friends or family can sound like a great idea, but things can become awkward if things start to go wrong or you disagree on major business decisions.
If you avoid having tough conversations, you could jeopardise your business. Here’s what you could do in this situation:
- When you’re starting a business, plan ahead. Consider the business structure and get legal advice to draw up a contract.
- Be clear on your roles and responsibilities – and discuss from the beginning how you will handle any disagreements that may arise.
Try to stay calm and professional. If you need help, consider getting a mediator to help you navigate the issue to achieve the best outcome for your business.
Difficult conversation #3: Sharing bad news with family members
If your business is experiencing financial difficulties, you might not want to worry your spouse or partner by sharing it. Here are some tips to help you:
- Don’t hide the bad news. Being honest and open about what’s going on in your business is likely to have a much better impact on your relationship – and your financial future. Your partner might be directly impacted by the financial difficulties, for example if your business loan is secured against your family home, so it’s important to keep them up to date.
- Share your concerns early. Your partner could be a source of support to help you through the issues. If things do get serious it could be better they knew about the escalating issues instead of getting a sudden shock.
If you find your business facing financial difficulties, speak to your accountant or business adviser to discuss the situation and possible solutions. For more ideas on how to deal with this issue, read our tips on managing stress and anxiety.
Difficult conversation #4: Issues with suppliers
You might find yourself facing an issue with your suppliers, with late deliveries, poor quality products, lack of customer service or if they won’t honour their warranties under the Australian Consumer Law.
If you’ve avoided discussing issues with your suppliers in case it jeopardises your business relationship, here’s what you could do:
- Deal with the problems as they arise. These issues tend to escalate and can have a major impact on your business.
- Communicate any concerns you have with your supplier. You might want to raise it first in person or phone and then in writing.
- If you’ve already let them know about the issue and they haven’t taken action, you could send them a letter of demand if necessary.
- Keep the tone of any conversations or communications professional and allow your supplier reasonable time to address your concerns.
You can find out more in our ‘Building your knowledge’ publication on resolving disputes. If you’re having trouble sorting out a dispute in your business, we encourage you to get in touch with our dispute resolution service.