• Step One: Acknowledge how their support has been invaluable in getting you started.

‘John, I’ve got something important I need to discuss with you. Before I start I want to say how instrumental your support has been in helping me get my business off the ground …’

  • Step Two: Outline the present situation.

‘As you know as we have been friends we have both been flexible where payment terms on invoices are concerned. I’ve been pleased to do this because of your support.’

  • Step Three: Outline the problem the present situation is causing.

‘As the business is growing my cash demands are becoming bigger and so cash flow is getting harder to manage. The flexibility around payment times is now getting more difficult to control.’

  • Step Four: Outline your idea scenario.

‘Now that the business has become more established we need to put some discipline around settlement terms and so ideally I like to see any invoices settled as promptly as possible.’

  • Step Five: Outline the action and final outcome which you feel is fair.

‘Can I suggest that from next month we agree to settle within say 10 days of invoice of date and then 5 days the month after? This will give you some time to make any adjustments on your side. How does that sound?’

Can you see the progression here? We have outlined the present situation; outlined the impact it’s having on you and the business; come up with your ideal outcome; and finally come down from that to suggest a phased approach over a few months.

In tackling problems many people go straight to Step Five. The build up and setting the scene is vital. Once the problem is understood by the other party the solution is easier to arrive at. It may be a straight ‘yes’ or it will be a great place at which to negotiate a way forward.

If your friend walks away, well do you really want to be doing business with that type of person anyway? However, you may be surprised to find them agreeing immediately. They may not taking advantage; it’s just you’ve never pushed and so they become unknowingly relaxed. You may get a ‘Stu, no problem. Why didn’t you tell me before?’

Who knows, in reality this problem may not be a problem at all. You may be making it into a bigger issue than it actually is. Being up front, honest and transparent will bring this to a head.