There aren’t many scenarios in which people
are repulsed by money…except of course, in the world of business. As a new
business owner, conversations about money can be intimidating, uncomfortable
and condescending. In a discourse where the exchange of service for currency is
inevitable, it’s hard to conceptualize such a fear, but most business owners
are able to recount instances where having to pick up the phone and discuss
payment was a nerve-wracking as pulling teeth.
There are three primary factors that are
attributable to the money problem:
·
Value - Entrepreneurs struggle to
accurately assert a price that is complimentary to the value of the service
they offer. In some instances business owners quote clients/customers fees that
are much lower than the product value because they fear that the consumer will
not recognize the worth; the opposite is also true. Pricing comes with a warranted level of
sensitivity because quite often it dictates how well a business will perform in
the respective market. Consequently,
talking about it can result in gaining clients or losing clients and some
entrepreneurs are not willing to take that risk.
·
Cultural taboo - Cultures discourage
discussions about money. Unfortunately, some entrepreneurs allow that
inter-generational value to seep into the discourse of business. Where it is
unacceptable to talk about money in the familiar institution, it is equally
disrespectful in a financial one. The
symptoms of this cultural taboo are evident in scenarios where business owners
are complacent in obtaining late fees, outstanding balances, and unpaid debts.
Instead, they carry on quietly and accept the loss, notwithstanding instances
where the obtainable amount is not of “significant” value.
·
Social Psychology, “A need to be right, and a need to be liked” - This explanation is quite simple: business owners and people in
general, want to be liked and want to be right. When a conversation of money
begins to occur, the rigidity of these two qualities is threatened.
Consequently, a client may refuse business on such premise.
Talking about money can be uncomfortable,
but it is necessary. The following strategies have been effective in relieving
conversational tension on this hot topic.
·
Market Comparisons - Compare your prices
to your competitors’ prices. Although this may require a little bit of
research, the effort is worth the outcome. Pinpoint noticeable financial trends
and assess your business on a similar spectrum. If there are businesses that
price their services above average fees, evaluate their company to see why.
Some businesses may offer additional services, have more qualified
professionals, or may have simply capitalized on effective branding. When you refer to your prices, quoting some of
the prices of your competitors will reassure your client that they are not
being lowballed. If your business is above average, make the same comparisons,
but emphasize what you are offering that warrants a departure from the status
quo.
·
Managing Your Motive - Why are you
talking about money? How important is the conversation you’re about to engage
in? These two questions are fundamental in shaping your thinking about money in
business. If both responses yield a matter of urgency and your business will
suffer if the matter is not addressed, it is imperative to have the
conversation. On the other hand, if your sole motive is to get more money
without providing a service that matches same, you’re better off not mentioning
it.
·
Formal Non-verbal Communication - Talking
on the phone or over a meal in a meeting may work for some business
professionals, but it is not ideal for everyone. Send an email outlining the details of
pricing and be clear and direct. Not only does this alleviate some of the
burden, but it also functions as binding documentation of exchange between you
and the client. Further, emails accommodate, what are otherwise, high-intensity
negotiations.
In closing, the infamous expression, “money
talks” is misleading, because money cannot talk until someone else does. And
the reality is: if you cannot get rid of the money problem, it may result in a
“non-existing business” problem.
