Ethical Entrepreneurship: The Impact and Strategies of Ethics
A growing number of global consumers want companies to have an ethically responsible vision and values, or they’ll spend elsewhere. How can small business owners start focusing on their “ethical footprint?”
As an entrepreneur, you have plenty to worry about as you try to bring in profits and get your name out there. But growing your business now also depends on meeting the expectations of more value-aligned workers and consumers. These values are largely driven by the younger generations—Millennials and Gen Z.
A RetailMeNot survey from 2019 revealed that 66 percent of respondents—made up of US internet users over age 18—feel that more brands should take a public stand on social values, and 74 percent of respondents ages 22 to 37 think this way.
These younger generations care greatly about whether or not the brands they’re supporting have put ethical policies in place or are taking steps to become more sustainable with their business practices, products, and services.
Gone are the days when you can ignore your business’s impact on the world around you. Your ethical responsibilities should be at the forefront of business strategy.
So, where to begin?
Ethical issues faced by entrepreneurs
New businesses are often faced with many ethical dilemmas. When money is tight, and products or services are new, it’s easy to try to cut corners or go the cheapest route, rather than the most ethical one.
Common ethical dilemmas faced by entrepreneurs include things like:
- Whether to put out a product or service offering before it’s ready, risking quality
- How to follow through on what you say you’ll do when lack of funding or other roadblocks get in the way
- Whether to provide employees fundamental benefits that are hard to afford right away
- Whether to focus on what’s cost-effective versus environmentally friendly options
Going the less-than-ethical route can be especially tempting when the business is still small, and there aren’t many people to keep each other accountable.
Creating an environmentally responsible company is one way entrepreneurs focus on fostering an ethical business. Our impact on the environment has been a pressing topic for years now, but it continues to stay top of mind for businesses, consumers, and workers, especially as younger generations are taking over workplaces.
A recent survey commissioned by Swytch, a clean energy blockchain platform, shows that more than 70 percent of millennial employees would be willing to accept a smaller salary in exchange for working for a company that’s environmentally responsible—10 percent said they’d even take a $10,000 pay cut.
But these concerns aren’t just held by workers. A Nielsen report indicated that 66 percent of consumers would pay more for brands that are sustainable, and 73 percent will pay more for sustainable products and services.
Environmental considerations include anything from using natural energy resources to offering cruelty-free products. If you’re just starting out, it can be a challenge to factor in the environment when you have a lot more on your plate. But making this a priority will help you start things off with ethics in mind, setting the stage for years to come.
Creating a clear purpose
To keep yourself and your business accountable, make sure that your actions and products are in alignment with your mission and vision. This first requires, of course, that you develop these concepts thoughtfully for your business and share them with the team. Your mission and vision will help you to maintain consistency and keep the end goal in mind while making decisions.
Defining and establishing your values early will help you and the team stay aware of the business’s commitment to transparency, and it will motivate everyone to stay within the ethical boundaries of the business. Your purpose will also be clear, which is a good reminder of why you’re doing what you’re doing.
Focusing on people
You wouldn’t have started your business without the people you want to help with your products or services. Instead of simply focusing like a laser on your bottom line, always remember that—at the end of the day—people are driving your business growth. This focus applies to both your customers and your employees.
Treating your customers well and prioritizing their needs is an ethical way to run your business. But without putting them at the top of the list, it can be easy to forget this simple truth. Your audience needs to believe in your brand and your services—and that starts with being an ethical leader.
Ethics are a broad concept, covering everything from whether to fudge financial reports or skirt waste disposal regulations to how you treat your employees, customers, and the environment. But in every aspect, having an ethical business begins with defining your purpose and vision. It extends to your operations, customer service practices, online engagements, the organizations you support, and how you treat people.
And in the end, ethics help generate success.
Provident CPA & Business Advisors serves successful professionals, entrepreneurs, and investors who want to get more out of their business and work less, so they can make a positive impact in their lives and communities. Typically, our clients reduce their taxes by 20 percent or more and create tax-free wealth for life. Contact us for expert advice on tax planning and business strategy, and to find out how we can help your business exceed your expectations.