Few things in business are more awkward than having a friend as a debtor who's not paying. The obvious dilemma is which to put first... your business or your 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.
So while it's easy to feel guilty asking a friend for money in actual fact it's your friend who's backed you and your friendship in to a corner.
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...
"You know how much our friendship means to me and that I would never do anything to jeopardize it. Seeing as my business is going through a rough patch at present the truth is if I don't ask you to settle your account I'd be putting my business and in turn our friendship at risk. And because I'd absolutely hate for us to fall out over money I'd really appreciate it if you would square me up by the end of the week."
Now so long as you speak your truth calmly and respectfully if they're a true friend they would not take any offense to you asking.
Having now asked for your money back, one of four things will happen.
The first and best possible outcome is that they settle their outstanding debt with you. In this scenario you know that a. your friendship is worth something and b. that your business is OK.
The second possible outcome is that they confide in you that they too are in a financial tight spot and they can't afford to pay you right now. 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.
Should you want to show your friend some compassion you should definitely seek out a collection agency that provides "Velvet Glove" debt recovery. In essence "Velvet Glove" recovery is a respectful yet assertive approach to recover money in 30 days or less without penalizing you or your friend with collection agency commissions. Using this approach, if they value your friendship they'll pay up and your friendship wont be irrevocably damaged.
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.
Sure, this all might seem drastic but the cold reality is if they were a true friend they wouldn't ask you to risk both your business and your friendship over money. Bottom line: They've set you and themselves up to fail and you've done nothing wrong by asking for your money back.
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.
So while it's easy to feel guilty asking a friend for money in actual fact it's your friend who's backed you and your friendship in to a corner.
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...
"You know how much our friendship means to me and that I would never do anything to jeopardize it. Seeing as my business is going through a rough patch at present the truth is if I don't ask you to settle your account I'd be putting my business and in turn our friendship at risk. And because I'd absolutely hate for us to fall out over money I'd really appreciate it if you would square me up by the end of the week."
Now so long as you speak your truth calmly and respectfully if they're a true friend they would not take any offense to you asking.
Having now asked for your money back, one of four things will happen.
The first and best possible outcome is that they settle their outstanding debt with you. In this scenario you know that a. your friendship is worth something and b. that your business is OK.
The second possible outcome is that they confide in you that they too are in a financial tight spot and they can't afford to pay you right now. 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.
Should you want to show your friend some compassion you should definitely seek out a collection agency that provides "Velvet Glove" debt recovery. In essence "Velvet Glove" recovery is a respectful yet assertive approach to recover money in 30 days or less without penalizing you or your friend with collection agency commissions. Using this approach, if they value your friendship they'll pay up and your friendship wont be irrevocably damaged.
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.
Sure, this all might seem drastic but the cold reality is if they were a true friend they wouldn't ask you to risk both your business and your friendship over money. Bottom line: They've set you and themselves up to fail and you've done nothing wrong by asking for your money back.
About the Author:
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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