By Louise Harris
People are often afraid to talk about money. Money talk can be an uncomfortable topic; many people avoid these conversations. To be successful, company owners and project managers must put aside their emotions so they can discuss financial aspects of contracts, says Donna Hook, an expert on communicating about money.
Hook garnered her skills in information technology departments of Fortune 500 firms. She deals with managed resources and also runs her company, Confident Communicator Coach. Clients hire Hook for presentation help or to address a topic at work that is difficult to discuss and resolve. She also coaches clients on how they can deal with finances. Her clients are in the corporate world, private health care practitioners or small company owners.
“The problem many people face is explaining the value of the work,” Hook said during our interview. “Some are inexperienced in talking with people about financial issues and some are shy when they have to resolve a situation regarding money.”
For example, a project manager, who is not in sales, had to meet with a client about executing a short-term time and materials contract. When the contract was negotiated, items were missed and were not requested. Complex work and inexperienced resources caused additional delays. The project manager had to address these shortcomings directly with the client and was stressed about the situation. Hook coached her on how to sit down with the client to resolve the issue.
Rely on Others
Hook recommends that workers who aren't normally involved in financial aspects or contract negotiations rely on the help of others. When available, they should work with their sales team or their legal department to resolve the issue. These meetings could lead to solutions that can be resolved internally without involving the client. A clause might be added to the contract or the sales representatives might be able to talk about a service or product they haven't mentioned previously.
Sit Down at Start
Prior to the contract work starting, the project manager or others who are not involved with the negotiations should sit down with clients and walk through the contract, line by line. In this way, both parties will understand what they don't know and what issues might arise during the work. Determine if issues or questions can be addressed before the work starts. Project managers can add milestones in the contracts, i.e. what must occur by a certain date and what can be expected in payment and approval. They should list variances and conditions for the contract to be met. These milestone clauses allow project managers and clients to evaluate how the work is proceeding and whether to stop or continue.
“Project managers can say, 'This project is becoming more risky than we thought or is taking longer than we wanted.' It becomes part of the conversation and is not as scary to discuss,” Hook said.
Evaluate Cost Absorption
Company owners should decide how much expenditure they are willing to absorb if the project fails or the client fails to pay. If the amount of the failed project costs more than a company is willing to lay out, then, they should not proceed with the project. At the same time, all parties should understand budgetary cycles and scheduling. They should stick to the budget and deadline as much as possible.
Speak to Decision-Maker
Often, people who have to request money are often not speaking to the decision-maker. This will not help extract money from clients. Project managers and others should find the correct person in a corporation before making their pitch. This also reduces fear because the people on the other end understand financial issues. They deal with them all the time.
Evaluate Ability to Pay
Before signing a contract, companies needs to evaluate whether the client has the ability to pay, Hook added. For example, a chiropractor sublet office space to a business owner, but the owner failed to pay utilities as listed in the lease. When the chiropractor discussed the issue with the company owner, the owner informed the chiropractor that he didn't have enough money to pay and broke the lease. This situation could have been avoided with due diligence in the beginning or with a more realistic contract.
Company owners often have trouble explaining how their work is valuable, Donna mentioned. To be more confident in talking money, she recommends owners have stories, testimonials and matrices to show potential clients how their service provided an improvement or increased the bottom line. With supporting material in hand, it’s easier to show clients value and define how a product or service more effectively and efficiently serves them vs. the client doing the work themselves.
Look for Opportunities
Business owners and client-facing teams should look for opportunities to earn more money, Hook concluded. They need to listen to the clients. By really listening to the clients, company owners can hear ways they might be of more service and possibly profit. Listening helps managers or sales representatives hear of needs that could be addressed through additional products or services. They can up-sell the client. Then, everyone wins.
In conclusion, to power through money talk use these practical tips to take the fear out of the conversation, confidently communicate the value in your offer and increase your ability to get paid for your work.
If you have any questions for Hook, feel free to reach out to her on her Savvy profile.