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Business Ethics – Overrated Or Underrated?

Ethical behavior, quality character, honesty, moral integrity – how does one in business view these human attributes? I tend to view them as a given with the people I interact in both the business world and in my personal life as well. I expect the best from people yet keep my eyes open for behavior that contradicts my expectations.

I am a business broker based in Florida. In the profession of helping those buy and sell businesses. In my profession, as with most all professions you have what some consider good business brokers, bad business brokers, and OK business brokers. Most all industries have the good, the bad, and the average. Is it ethical practices which help define the good, bad or OK?

I recently experienced a business activity that made me take special note of a business clients actions. Basically, we had a verbal understanding and agreement regarding a business relationship we would enter into contractually. While driving to meet with client to sign the documents that outlined our agreement my client was approached by others.

The client and I had no written agreement between us. The client could potentially go in another direction which could cost me a fair amount of money. I had left at 5:00 am to drive 6 hours to meet client and about 1/2 hour before I got to our meeting he called me to tell me of this other situation. After listening to what he had on his mind, I was somewhat pleased when he then asked me how long before I could get there and we could sign our papers and I could represent him with this prospective buyer of his business. He told me he felt he needed the assistance of my representation, yet he could of handled the situation so much differently. Before this exchange I viewed this potential client as a good, honest, straight forward individual. His actions reinforced to me the value of dealing with a person of good character.

I have shared this story with several of my friends that are business owners and their response was fairly common. They too also greatly value dealing with a person of good character. But that fact that those around me hold business relationships with those of good character in such high regard, makes me realize good character from others is a valuable yet somewhat limited commodity.

A few weeks back my teenage son and I were talking of the Tiger Woods situation regarding his many documented affairs. We both are active golfers and had admired Tiger Woods golf skills over the last 10+ years.

Golf is an interesting game and it has been said that one can learn more about a person in one round of golf than you can in multiple office based meetings. I asked my son that if Tiger Woods had “cheated” on his wife and family, do you think he may have cheated on golf. My son said, “No,” I said, “Why?” He said that he thinks Tiger Woods views golf so importantly that he wouldn’t cheat on golf. So I asked him the obvious, “So you think he views cheating on golf to be worst than cheating on your wife and family and that is where he draws the line?” My teenage son said, “Yes.”

I have been associated with several different organizations, associations, and trade groups. I still get a little surprised that many of these such groups feel compelled to teach ethics. I am in the profession of being a business broker and I work with individuals and businesses in the process of buying and selling businesses. I consider the fact that I will treat my clients and customers in an honest, ethical, and moral manner as a given, yet when I witness others that “consistently take the high road” I take special notice. I have been a member of the business community for several decades and recognize that most all of us are on a quest to increase financial gain. Where does ethical behaviour fit in that mix?

*Do you feel business ethics can be taught and learned by all in the business world?
*Is business ethics much different than normal ethics one utilizes in the everyday game of life?
*Can ethics be taught to a 20, 30, 40, 50, 60 year old? Or is it ingrained in you before you enter the workforce?
*Is it OK to treat someone unethically and then pass it off as “Its just business”? To this I say No and have always felt that. I have never really understood “Its just business.”
*I have never understood “I had to cheat you out of $X, but it was just business”, ” I know I treated you wrong, but it was just business” – what does that really mean?
*Does proper ethical behavior really require actual thought or is it more of an involuntary response that just occurs like breathing and blinking?
*Is dealing with a person and expecting honest ethical behavior a given and glossed over to allow “more important business issues to be discussed”, or is it the important issue that all else revolves around?

Bank on It – Why Having a Business Bank Account is Essential

There are many reasons why a new business owner may forgo opening a business bank account and struggle on using their own personal account for their business transactions. Sometimes they simply run out of time, having focused on everything else and forgotten to open a business bank account, they suddenly realise that it cannot be done instantly and so opt to carry on using their personal account. Other times it is through lack of conviction, fear of business failure leads them to bulk at putting the business finances into black and white. Most often, though, it is in the mistaken belief that it will save them a little money if they do not have to fork out for business banking fees.

Not paying to have a separate business account can often prove something of a false economy, as, for the small amount that most business accounts might cost, a business can gain so much more than just a bank account.

The way that customers and other businesses with which you do business view you is very valuable; image is everything in business and having your business transactions move through a personal rather than a business account smacks of small time; your business is far less likely to be taken seriously and plenty of customers will be put-off by the impression of paucity it creates.

Trying to do business accounts when using the same account for personal and business finances has the potential for absolute disaster; even allowing for not making any important fiscal errors, the sheer time consuming nature of fussing around separating everything out will be very trying for most new business owners.

Make no mistake, HMRC will be watching you; there will of course be times when you will have to have contact with them, provide them with information etc. and other times when they will just be watching. Mixing personal and business bank accounts may cause them to look a little harder at you and your business, as it makes financial transparency more difficult to demonstrate at a glance. If the Tax Man wants to see that you are declaring everything you should, having to fight through hundreds of domestic transactions to locate those of the business will not endear you to them.

Business accounts can provide your business with more than just banking facilities; many banks will throw-in added extras, such as accounting software, deals on insurance and even offer the actual banking services free for the first year or more of business. They are also a great source of financial advice for the new business owner.

So, rather than viewing a business bank account as an extra overhead on your new business, perhaps you could look at it in terms of what it can provide in benefits for your venture. If a business bank account can help your business profile or simplify its record keeping maybe it is worth the effort of setting it up, if it can also help the authorities to look favourably on you and throw-in a bit of guidance and some cheap insurance to boot, well then maybe it becomes an essential to add to your list.

How to Implement a Business Strategy in Your Organization

Ask any successful business owner and they will tell you their success was not based on luck. The success – and failure – of a business is dependent upon the strength of their business strategy. A successful strategic plan employs cost reduction, development, and sustainability techniques to ensure a bright future. You need to know your business inside and out in order to create a comprehensive and realistic plan.

Your strategy should help you achieve the objectives of your business. A business strategy is the driving force behind any organization, and takes the form of an official report. Businesses are self-sustainable systems, when you change one thing in the system; it has a positive or negative chain reaction. Like an organism, businesses learn how to adapt to the change if it is positive, and rectify the situation if it is negative.

Organizations have several phases of development, including creativity, direction, delegation, and consolidation. A company may start out with lenient rules and regulations, but as time progresses management adopts more efficient policies that hinder creative thinking. Companies mature and lose sight of their goals and mission statements, with more of an emphasis placed on individual projects or initiatives. As a business enters maturity processes, departments, and policies are refined to reunite the organization.

Ways to Conduct Business Strategy

Historically there are two ways to develop a business strategy, using the “bottom up” and “top down” models. The bottom up method is when employees generate ideas on the floor and the best results are passed onto management. The top down strategy is when business owners create the strategy and implement the changes without seeking employee feedback. Unfortunately, both models fail to include all of the employee feedback.

The new method of developing a business strategy uses a collaborative process, which is when managers and employees exchange information and work together to create a sustainable solution. It is a team-oriented process that bridges the gap that exists between managers and workers. Before you create a business strategy ensure you have the additional resources to carry out the task without interfering with normal operation. Assign tasks and delegate responsibilities while keeping to a defined chain of command.

Functional versus Operational Business Strategies

There are two types of business strategies: functional and operational. The functional strategy focuses on general ideas and a variety of tasks for different departments. The generality is a major disadvantage, however; areas of concentration include marketing, new product launches, human resources, financial assets, and legal issues. Functional strategies provide a nice overview of the business but do not tackle the important issues employees encounter day-to-day.

Operational strategies are ideal for businesses that want to reduce costs and streamline processes because it is much narrower in scope and requires accountability on all levels. The detail oriented plan encompasses everyone and everything, from the number of cashiers on duty to how much inventory is carried at a given time. A strategy is unique to each business and reflects the needs and requirements of the company’s management.

Implementing a Business Plan

A business plan is the textual version of a strategy, as it includes pertinent information regarding the company, including: vision and mission statements, measurable objectives supporting the vision, actionable tactics meeting the objective, resources, milestones and timeframes, accountability and role designations, as well as internal and external risks. The business strategy is not evergreen and should be evaluated routinely to ensure the company still has the competitive edge.

A business plan includes the primary and secondary objectives of your organization, an analysis of current policies and procedures, and the development of new policies or procedures to correct weaknesses within the organization. Before beginning a strategy, it is helpful to conduct a SWOT analysis, which helps identify weaknesses and loopholes within the organization. Your competition capitalizes on your weaknesses, thus it is essential to continuously evaluate your business.

Developing a Competitive Strategy

Brainstorming and collaboration are essential to the development of a successful business strategy. Begin the process by identifying the strengths and weaknesses of the organization. Without erasing responses, continue to identify current opportunities that help your business succeed. Finish the SWOT analysis by identifying threats or risks that place your business in danger. Identify how your company beats the competition, outlining the various strategies already in place.

Identify your current target audience and list potential audiences in the form of demographics. Assess current market conditions and how your company can defeat the competition. Reevaluate how you are reaching current and potential customers and consider your overall marketing plan. Think positively and develop solutions to overcome any weaknesses that you have discovered thus far. Admitting your weaknesses is the hardest part of drafting a business plan, as most companies want to appear strong and mighty. Research why you have these weaknesses and find realistic solutions to the problems.

Business owners often become so caught up with their work that they fail to concentrate on their business strategy, which is a significant source of cost reduction. Achieve your goals by dedicating time each month or week to address issues surrounding the operation of your business. Make the process a tradition, ensuring operations are aligned with current goals and future forecasts. Make your business stand out from the competition by utilizing different techniques to attract the most people.

A successful strategy overcomes organizational hurdles by understanding customer needs and predicting the unpredictable. The formation of a business strategy is a science that combines current circumstances with a variety of internal and external variables, addressing immediate and long-term goals of the organization. The implementation of the strategy is rolled out slowly, starting with management. The plan encompasses everyone; however, customers are indicative of the final result.