Entrepreneurs: How To Approach Awkward Conversations About Money
Apr. 8 2022, Published 8:00 a.m. ET
Talking about money is an essential piece of running any business, but that doesn't make it any less awkward. Whether you're raising your prices, chasing down a late invoice payment, or explaining to someone that you don't just give 50% discounts, these uncomfortable conversations happen regularly when you're an entrepreneur.
Being vocal about the financial side of your business is rarely comfortable, but learning how to stand firm, set boundaries, and negotiate tactfully is essential to maintaining strong client relationships—and a healthy cash flow.
Read on for a few tips from experts and experienced entrepreneurs on how to minimize misunderstandings and get better at talking about money.
1. Clearly define your pricing.
While awkward money conversations are inevitable, there is one way you can significantly reduce their frequency: by being crystal clear about your prices from the get-go.
Jane Goodrich has had more than her fair share of awkward conversations while running her photography business. She eliminates as many of them as possible by being very clear about her rates by:
- Putting clear pricing on her marketing materials and email correspondence with potential clients
- Having a price guide PDF
- Providing clear, written guidelines on the payment schedule
- Creating a contract that also states pricing and payment schedules
- Creating templated emails to respond to price shoppers and people asking for free stuff
While this usually helps, Goodrich says that these conversations can be a sign of a bigger problem with your business.
"If you are constantly getting questions about your pricing being too high or asking for a discount it might be a good time to revisit your marketing as you aren’t attracting your target audience," she says.
2. Get it all in writing.
The best way to avoid awkward conversations about money is to get everything in writing up front, according to Andrew Taylor, director of Net Lawman. That way, there are no misunderstandings or surprises later on.
"Clearly define the issue of money, payment methods, and payment deadlines in the contract," Taylor says. "If the customer is late, send a written reminder to pay, and repeat the same every few days until payment is made. Don’t continue to cooperate until they settle the bills. When it comes to larger amounts, always secure your claim with a lien, especially with risky clients."
3. Follow up.
No one likes chasing down an unpaid invoice, but unfortunately, it's a situation many entrepreneurs find themselves in. Business growth strategist Maria Tan says the best way to handle clients who try to ghost is to be persistent and proactive in following up.
She suggests starting with a follow-up email with the subject headline of "Friendly reminder," if they miss a payment deadline. "If that doesn't work, I'd leave a voice memo," Tan says. "If that still doesn't work, I'd have my lawyer write a demand letter, but give the other party another chance by saying, 'Hi, just a heads up. Since I haven't heard back from you on invoice #, legal is now taking over collections. Please expect to hear from _______ in the next 72 hours.' That normally does the trick."
4. Don't forget your value.
While it can be tempting to give in to a haggler or someone who requests a discount, it's important to remember the value you bring to the table. Liz Heflin has been running her content marketing consultancy MACE Writing for 15 years, and she learned a key pattern that changed how she approached rate negotiations.
"When I was starting out, I used to view negotiation as part of the process," Heflin says. "I was willing to concede to win the client. Over the years, though, I learned something. Clients who negotiated were inevitably the ones I didn't enjoy collaborating with.
They undervalued the writing and were always trying to get more for less. When you know your price and stick to it, you avoid the awkwardness of haggling altogether. You feel more valued, your work feels more valued, and you usually end up working with people who make better long-term clients."
Money is always going to be a touchy subject, but by taking the time to prepare and educate yourself on best practices, you can make those awkward conversations a little bit easier.