We’ve all had a younger brother borrow our car, or a sister use one our jewellery, often without permission. It can be annoying asking them to give the item back. They often deny having taken it in the first place, even if you’ve seen them using it. Maybe it’s not a housemate that did the borrowing. Maybe it was a neighbour’s hosepipe or lawnmower. Whether you’re the borrower or the lender, the situation quickly gets awkward.
Under any circumstances, indebtedness can bring out an interesting side to our personalities. The borrower often feels attacked, and may get defensive, while the lender might feel disrespected. After all, the item is theirs by right, and it can be difficult to ask for something that belongs to you – and not receive it. In many ways, you don’t feel you should be asking at all. It’s your property after all…
Translate this situation into cold hard cash. What’s your relationship with debt? Do you have an easy time asking a sibling or friend to lend you a few dollars? Or maybe you’re the person in your circle that is frequently asked for soft loans. Do you charge interest? Do you tell your borrowers when they should repay? Is it easy to ask for your money back?
Debt in business settings
In general day-to-day life, borrowing and lending is an emotionally charged topic. It can become even more contentious when money is involved. On the surface, it’s just paper, plastic, and metal, but there’s often a lot of sentiment attached it, so debt collection must be handled with utmost care. You need to be calm, patient, and an ultimate negotiator, no matter which side of the equation you’re standing on.
Think about it from a business perspective. As a founder or owner, you have a certain set of skills. You may be the creative mind that developed your initial business idea, perfecting the product or service from concept to conclusion. So maybe this is a dream you’re bringing to fruition, whether it’s ‘uber’ for *insert sector*’ or a brand-new way to fold socks. Or maybe you’re the money person, blessed with networking skills and contacts.
Maybe you brought together industry specialists and the moneyed class to fund your idea into a billion-dollar brand. These are just two of the skill sets needed for successful ventures. For your business to thrive, you’ve now hired different people to cover the different areas. From your charming front desk staff to your intimidating security team, everyone has a role to play in the positive progress of your brand.
Big thinking for big players
Once everybody has their job description, you begin to roll out the product or service, receive orders, and deliver to customers. Along the way, loans and debts build up. It may be customers who purchase using instalment plans, or distributors who ship their stock on credit, planning to pay after they sell to direct customers. It may even be an in-house lending programme that allows staff to borrow from the firm to improve their lives.
Eventually, it’s time to recoup all that money, and as business owner, you’re not the best placed to perform this task. If you’re a creative, you’re probably better at product development and brand building. And if you’re the face of the business, you’re more gifted at persuading press and investors to buy in than you are at chasing the money trail.
Also, you’re way too close to the brand. This is your baby. To pursue debt, you need one very important skill – objectivity. You need the ability to not take unpaid debt personality, or perceive it as a slight to your labour of love. That’s why as the boss, your best response is to step back and let a professional pursue your debt.
It pays to hire experts
Just like any other facet of your business, leaving things in the hands of the pros will save you time and money. An outsourced debt collection professional can cast unbiased eyes on the situation. This means they can survey your debtors with an outside perspective, looking at the circumstances from multiple points of view, and re-negotiating a payment plan that works both for the business and the debtor.
They deal with debt scenarios every day, so they are well-equipped to handle anything that comes up from a social, financial, and legal perspective. By leaving your debt matters in their hands, you can expedite the recovery of what’s owed, and more importantly, you can focus on the aspect of your business that you’re far better suited to deal with. Everybody wins!