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Have you wrestled with issues such as these?

 

  • Your business is struggling financially. A supplier sends you their monthly invoice—and they’ve significantly undercharged you. Do you correct the error?agreement-arms-business-1081228.jpg
  • Your children’s toy store is in the thick of the holiday shopping season when you discover that your best-selling product line is made using child labor. Do you keep selling the products?
  • You’ve received complaints that one of your employees is making derogatory and inappropriate comments to coworkers. But he’s your top salesperson and you know he’s recently received another job offer. Do you confront him?

 

In these and other situations, a small business owner may have to choose between principles and profits. But is it really an either-or choice?

 

Short-term profits, long-term price

 

Sticking to your principles may cost you in the short term. In the examples above, it could cost you money, customers or your best salesperson. But if you abandon your principles, you’ll pay a higher price in the long term.

 

Actually, you may not have to wait that long. Social media makes it easier than ever for customers and prospects to see what your principles are and when  you’re conveniently ignoring them. A potential job candidate could see employees at your company complaining about on-the-job harassment. A customer could discover the child labor issue before you do. Transparency gives consumers the upper hand.

 

Profiting from principles

 

In fact, sticking to your principles can pay off. According to a Deloitte study, purchasing drivers such as “social impact, health and wellness, safety and experience” are becoming more important as consumers increasingly base purchasing decisions on their values and beliefs.

 

In the last 12 months, 74 percent of consumers in a JUST Capital survey say they began purchasing or purchasing more of a company’s products or services in order to show support for its positive behavior. The same poll found nearly eight out of 10 Americans would take lower pay to work for a company they perceive as “just.”

 

The stock market believes principles and profits can work hand in hand. The Dow Jones Sustainability Index rates public companies based on the triple bottom line: people, planet and profit. Participating companies report on their financial, social and environmental performance.

 

What principles do consumers care about most? The way you treat your employees takes top billing. Worker conditions, including fair pay, good benefits and a safe workplace, are the top priority for one-fourth of U.S. consumers considering companies’ principles, JUST reports.

 

How to balance principles and profit

 

How can you hold onto your principles while still making a profit?

 

  • Identify your business principles. What are your core values? What does your business stand for? Review your mission statement, value statement or vision statement. Are they still accurate?
  • Talk to your team. What do your employees think your business stands for? Do they believe the company is truly living its values? Your employees are the ambassadors for your business; they must be on the same page when it comes to company values.
  • Build your business’s values into your employee training. Set guidelines for how employees should treat customers, coworkers and vendors, as well as consequences for not doing so.
  • Practice. It’s not easy to make ethical decisions on the spot. Practice by roleplaying potential scenarios as a group. What should employees do if they see another employee harassing a co-worker? Is there ever a time when it’s justified to take office supplies home?
  • Look in the mirror. If your business isn’t living up to its principles, do you play a role in that? Perhaps you set production quotas so high that employees have to rush to keep up, compromising product quality. Own your mistakes and lead by example going forward.
  • Keep your eyes open. Pay attention to what your vendors, customers and suppliers are doing. It’s a global world and we’re all connected. Doing business with people and companies that share your principles will strengthen your commitment to your values.

 

Principles and profits can and should go hand in hand. Committing to your business principles and educating your customers about them will boost your brand—and ultimately, your profits.

 

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About Rieva Lesonsky

 

Rieva Lesonsky Headshot.png

Rieva Lesonsky is CEO and Co-founder of GrowBiz Media, a custom content and media company focusing on small business and entrepreneurship, and the blog SmallBizDaily.com. A nationally known speaker and authority on entrepreneurship, Rieva has been covering America’s entrepreneurs for more than 30 years. Before co-founding GrowBiz Media, Lesonsky was the long-time Editorial Director of Entrepreneur Magazine. Lesonsky has appeared on hundreds of radio shows and numerous local and national television programs, including the Today Show, Good Morning America, CNN, The Martha Stewart Show and Oprah.

 

Lesonsky regularly writes about small business for numerous websites and for corporations targeting entrepreneurs. Many organizations have recognized Lesonsky for her tireless devotion to helping entrepreneurs. She served on the Small Business Administration’s National Advisory Council for six years, was honored by the SBA as a Small Business Media Advocate and a Woman in Business Advocate, and received the prestigious Lou Campanelli award from SCORE. She is a long-time member of the Business Journalists Hall of Fame.

 

Web: www.growbizmedia.com or Twitter: @Rieva

You can read more articles from Rieva Lesonsky by clicking here

 

Bank of America, N.A. engages with Rieva Lesonsky to provide informational materials for your discussion or review purposes only. Rieva Lesonsky is a registered trademark, used pursuant to license. The third parties within articles are used under license from Rieva Lesonsky. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

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