Small business owners are too shy to ping their customers and clients over late payments, hurting their bottom line and preventing further growth, new research has claimed.
According to a report from GoCardless, which polled more than 1,000 SMB decision-makers, almost a third (29%) are uncomfortable asking their customers for payment. What’s more – three-quarters (73%) are even willing to forgo up to 10% of their annual turnover just to avoid an awkward conversation about payment.
This inability to stand up for one’s self is hurting their bottom line and preventing them from further growing their business, and they know it. Almost three-quarters (73%) agree with the idea that avoiding talking about payment prevents hinders growth.
A fifth would have more time to think about their long-term strategy, and growing a company, and 18% would invest in other parts of their business, including marketing, or new software.
Women more reluctant to talk money
Drilling deeper into the problem, GoCardless found that women leaders struggle even more than men. While less than a quarter (22%) of male leaders feel awkward talking about money, it rises to almost a third (32%) among women. Most of the time (54%) women think they’ll come off as rude, something 40% of men would say.
But the fear and the awkwardness is unfounded, as the report uncovered that it’s the customer who usually ends up feeling ashamed. When informed about a late or failed payment, almost half (42%) of people feel embarrassed, while a quarter (28% and 22% respectively) feel apologetic, or grateful to have the opportunity to resolve the issue.
With technology, GoCardless continues, the problem could be solved, in good measure. Most consumers (62%) agree they’d feel more comfortable getting chased by an automated email or text message, rather than being called by an actual human. Two in five (41%) of business owners reported being interested in machine learning and AI to reduce the rate of failed and late payments.