In today’s Freedom Friday blog and email newsletter, I want to talk about a topic that comes up with a lot of clients, and something that I am asked to do for a lot of my clients, and that’s demand letters. Many clients think that they can send a demand letter on their own, and you can, but it’s better to ask an attorney to do so. I get a lot of requests to send demand letters, and so in today’s Freedom Friday blog and email newsletter, I’m talking about how to send a demand letter right way, i.e., how to send a solid demand letter.
Many small business owners deal with unpaid invoices or similar issues, and after following up time and time again, send a demand email (or letter) to their customer stating, “If I don’t receive payment by Friday, I’ll take legal action.” That is not always the best approach to handling overdue and unpaid invoices. Most overdue customers simply do not respond to such emails or letters because they instinctively know that you haven’t hired an attorney to collect the overdue payments, you still hope to keep the relationship with that customer, and you’ve already extended the deadline several times. In other words, you’ve been bluffing all along and damaging your credibility without increasing the pressure on your customer. Unfortunately, sending a bad demand letter or email can show you’ve previously accepted late payments, cause you to lose leverage, and damage the relationship with your customer (although sometimes it’s not worth keeping the customer for this and other reasons).
If you’re going to send a solid demand letter, you need to make the breach clear, set a specific deadline for the breach to be cured, flag escalation without a threat, and most importantly, don’t send the demand letter yourself. Hire an experienced business attorney to send a demand letter via certified mail and/or email to your customer and let them make that impression that this is a serious issue. Meanwhile, while your attorney is doing his or her job, document your performance that you fulfilled your end of the contract, and preserve all communication between your company and your customer that hasn’t paid their bill. Delaying, threatening, and begging will get you nowhere. Have your experienced business attorney send a solid demand letter that is strategic, emotionally neutral, and follows the law.
Thinking about starting a small business? Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth? Please contact me at Jonathan@libertylegalok.com to schedule a FREE strategy session.
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