Whether it’s attracting new customers, working on social procurement and workplace diversity, or simply earning more than you spend, running a business is challenging. Part of the difficulty lies in the ethical dilemmas new business owners face. You need to manage client contacts, employee behavior, and fundraising approaches among a host of other things. Sometimes, there’s no clear right or wrong.
Regardless, the first step is to be aware of the dilemmas. Below are five common ones you’ll likely face on your entrepreneurial journey:
Although it can be personally uncomfortable and financially costly, sometimes it’s necessary to walk away from clients. This is particularly true if they’re engaging in questionable behavior that you don’t want to be associated with.
Before terminating the working relationship, however, it’s crucial to set some boundaries. If the client adheres to those boundaries, then reconsider. If they don’t, then go ahead and walk away, even if it’ll be challenging from a financial and contractual point of view.
When you’re seeking a cash injection from outside investors, it can be tempting to massage the facts to present your business in the best light possible. Although understandable, there are serious downsides to this. First, you’ll lose credibility and trust. Second, you’ll tie yourself down to a set of unrealistic promises.
To avoid that, be optimistic yet realistic. Show that you’re inspired and engaged but also grounded in a pragmatic understanding of what’s possible and what’s fanciful. This helps you avoid impossible-to-reach standards while kindling trust and credibility with potential investors.
When money is flowing and profits are healthy, it’s easy to support other businesses. When you’re clawing for survival and barely covering rent, it’s much harder. If you’re dedicated to building a thriving business community, this presents an ethical dilemma. What do you do?
One solution is to support others in non-financial ways. For example, you can cross-promote another business’ products online, or highlight what they’re achieving in a monthly newsletter.
Nearly 4.5 billion people use social media, so if you’re a new business owner, there’s a good chance your employees are all over it. That presents an ethical dilemma. When your employees use business accounts at work, it’s easy to set clear rules on what they can and can’t post. When those employees are at home using personal accounts, those rules become murkier.
Can you fire an employee for something they posted on social media? In short, yes—and many employers do. Although laws and company policies vary, many businesses either refuse to hire or choose to fire employees who post discriminatory, illegal, racist, or otherwise objectionable material on social media platforms. Of course, these things are easy to talk about in theory. When that employee is sitting in front of you, it’ll be a much more complicated story.
As a new business owner, it may be tempting to hire someone you know. However, if you stray too far into nepotism, you can harm your business in more ways than one. Apart from the general social issues, nepotism can cause you to lag behind others because it cuts you off from top talent. So it’s best to steer clear of it by hiring the most qualified person.
Reflect on the above five dilemmas, and you’ll be well-prepared to deal with any ethical issues that may arise in your business.