New research claims that small business owners shy away from paying their customers and clients late, which hurts their bottom line and stifles further growth.
According to a report by GoCardless, which polled over 1,000 SMB decision makers, nearly a third (29%) are uncomfortable asking their customers for payment. What’s more – three-quarters (73%) are willing to sacrifice up to 10% of their annual turnover to avoid an awkward conversation about payments.
Their inability to stand up for themselves is hurting their bottom line and keeping them from furthering their business, and they know it. Nearly three-quarters (73%) agree with the view that avoiding talking about payments hinders growth.
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A fifth will have more time to think about their long-term strategy and grow a company, and 18% will invest in other parts of their business, including marketing or new software.
Women are more hesitant to talk about money
Going deeper into the problem, Gokardless found that women leaders struggle far more than men. While less than a quarter (22%) of male leaders find it awkward to talk about money, this rises to about a third (32%) among women. Most of the time (54%) women feel that they will come across as rude, as would 40% of men.
But the fear and awkwardness are unfounded, as the report revealed that it is the customer who usually feels the embarrassment. About half (42%) feel embarrassed when informed of a late or unsuccessful payment, while a quarter (28% and 22%) feel apologetic or grateful for the opportunity to address the issue. We do.
With technology, GoCardless continues, the problem could be solved in good measure. Most consumers (62%) agree that they would feel more comfortable being followed by an automated email or text message than being called by an actual human. Two in five (41%) business owners reported being interested in machine learning and AI to reduce the rate of failed and late payments.
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