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Financial Education

Small Business Ethics

Attorneys, doctors, financial planners and other professionals have specific ethical and professional standards that are published and meant to be followed. Small business owners don’t have such a written guideline to follow.

Instead of a code of professional conduct to turn to when they face an ethical dilemma in their business, small business owners must use their own moral compass.

If practiced from the top down, business ethics can become a main part of a company’s culture and can help it succeed.

While every company is different and a small business owner may want to instill their own ethics in it, there are some principles of business ethics worth considering:

Be Trustful

Customers want to do business with a company they can trust. It can be easy to recognize through the character and truth of a business.

Be Open To New Ideas

Keeping an open mind can help a company improve continuously. Ask for opinions and feedback from customers and employees.

Meet Obligations

Keep your business promises and deliver a quality product on time. If past customers have had something go wrong at your business, try to reclaim their business by honoring all of your commitments and make things right.

Have Clear Documents

Re-evaluate your advertising, brochures and all of your business documents to make sure they’re clear, precise and professional. Make sure they don’t misrepresent anything.

Contribute To Your Community

By being involved in community-related issues and activities, you’ll demonstrate that your business is responsible.

Proper Accounting

Take a hands-on approach to accounting and record keeping. It will not only give you a better feel for the company, but will help uncover any “questionable” activities. Good record keeping can also protect an employer if an employee raises a complaint or lawsuit against it. This should include documenting and recording everything — performance reviews, feedback from colleagues about a job candidate, and disciplinary actions, among other things.


Treat others with respect, regardless of differences such as positions, titles, ages and other distinctions. Treat others with professional respect and courtesy.

Treat All Employees Equally And Fairly

U.S. equal opportunity laws require that “covered” employers can’t make any hiring decisions based on a bias for certain groups of people. This includes gender, race, religion, age, disability or any other class of individual protected by the law. A manager also can’t harass employees because they’re in a certain group, such as being pregnant.

Not all businesses fall under the U.S. Equal Employment Opportunity Commission’s jurisdiction. It doesn’t enforce complaints of businesses with less than 15 employees for general bias against certain groups.

Equal Pay

The Equal Pay Act makes it illegal to pay different wages to men and women if they perform substantially equal work in the same workplace. Employees must also have a safe and secure workplace, receive appropriate meal and rest breaks, and get overtime pay.

To help make sure that employees understand the ethical standards of your business, you can put them in writing in an employee handbook. The handbook can include a code of conduct so that all new employees understand your corporate policies and procedures, as well as their rights.