Honesty is the only policy.

Owning a Small Business is a terrific journey with tough choices every day.  Many new businesses focus on only one goal - survival. Yet in the early phase of a new business is when you establish the values that will guide your company through growth to success. It's all too easy to compromise your principles to get that first huge WD&F deal, to obtain financing, to hire key people or delay a promised payment, but in the end those decisions can also create the cancer that destroys your business. New businesses depend heavily on good first impressions when they hire employees and court customers.  In a competitive market, any whiff of dishonesty can destroy a new business.

You're the Model

Legendary entrepreneur Warren Buffet put it this way: "Trust is like the air we breathe. When it's present, nobody really notices. But when it's absent, everybody notices."  You can run your business from startup to retirement on ethical principles. Now is when you must put the right things in place to build an ethical business culture. The first step is to be a model of ethical behavior yourself.  If your employees see you cutting corners and consistently working in gray areas, then they are probably going to do the same thing regardless of what your code of ethics says. It's a monkey-see, monkey-do world we live in, and like it or not, you're the big monkey everyone looks up to in your company."

Choices Show Up Everywhere

Ethical considerations pop up almost everywhere you look. Take refunds. How many times have you questioned a customer if they really lost money in a washer or a dryer? How many times have you said you would refund their money, but then lost their address or forgot to send their refund?  How many times have you said that your do something...but then never go around to it?  Things got busy, or there was bigger problem you had to address first?  Doing the right thing on a consistent basis is not easy, but in this immediate society it is a must.

Price Gouging

For example I heard of a story in England where there was terrific gasoline shortage during a refinery strike. There was a local gas station which doubled the price of gasoline during a gasoline shortage.  Customers who waited in line to get gas complained about the price, but they still stood in line and paid the exorbitant fee. The owner made a huge profit and thought of himself as very "smart" business man. After strike ended and gasoline supplies returned to normal, his business began to suffer. It seems that his old customers remembered how he took advantage of them during the gas shortage and now that things were back to normal, they took their business elsewhere. People have a long memories and if they feel abused, they will remember the being taken advantage of and they will show these feeling with their wallets.  This "smart" gas station owner when out of business after 6 months the strike ended because of this lack of business ethics.

You're an Employer, Not a Lord

Your business ethics also apply to how you treatment of employee. Pay them fairly and pay them on time. Don't treat them as third-class citizens. Include them in the decision-making process and reward them for good ideas. Happy employees are productive and you'll experience less turnover, which is a cost savings in the long run.

This article was adapted from http://www.startupnation.com/