Do you have an ethical dilemma? Write to The Ethics Coach at ethics@entrepreneur.com.
Ignore accountability, and you'll be on the fast track to a derailed reputation. But there's not always a clear-cut answer regarding the amount of responsibility you have to shoulder in every situation. This month we tackle two tricky accountability issues.
Q: I am a self-employed graphic designer in North Carolina who was hired by a motivated, seemingly professional client to provide design services, including a website, for her new business. She agreed to a contract and made a 50 percent down payment. When the site launched, she paid only half the remaining balance and has made no payment on follow-up invoices. She also owes others in town. Further, she owns additional businesses in Georgia and has moved to a third state to start another. How can she be allowed to keep doing this?
A: Sounds like the makings of a made-for-TV movie, The Runaway Owner. There is a role in it for you: the heroine who puts a stop to the client's unethical ways.
Make your voice heard--and warn the business community at large--by filing a complaint with the Better Business Bureau (BBB), Dun & Bradstreet or the police. You can also start a complaint trail about the company through small-claims court or a lawyer.
Complaints create accountability. By taking action, you and others she has cheated start to build a public record of how the runaway owner does business. That creates a reputation she won't be able to leave behind.
Filing a complaint is "a first line of defense to see if the issue can be resolved before taking other measures," says a spokeswoman for the BBB, which notifies a business (whether still in operation or not) when a complaint is filed and helps resolve the issue. If a company refuses to cooperate, the Bureau can open an investigation and alert the public. If someone starts a number of businesses and leaves town, the BBB can take complaints about the companies and cross-reference by owner.
"The more people who file complaints, the better we can build a file on a company that is being operated unethically and highlight an owner's track record," the spokeswoman says. When a business demonstrates "substandard marketplace behavior," the BBB warns the public via the company's grade on its online Business Review. For outright fraud, the BBB often issues press releases, scam alerts and social media notices. That information can help contractors decide whether to collect money upfront before providing a service or to avoid doing business with that company altogether.
Q: I am an independent mechanic in Tennessee, a primarily rural state that doesn't require auto inspections. I get a lot of requests to fix cars for people who can't afford to pay. In areas without reliable public transit, people depend on cars to survive. How do I say no? Should I stop seeing them because they are costing me money? And worse: What if they continue to drive, even if I tell them it's not safe?
A: Many entrepreneurs feel a strong responsibility to give back to their communities, helping those who need their products or services but can't pay for them. Some take this on when their business is financially solid; others make pro bono work part of their business model; still others become activists to find collaborative solutions.
You know you need to set boundaries. If you continue to shoulder too much responsibility for the community, your business will suffer. One way to help yourself say no comfortably: Team up with other local businesses and organizations--mechanics, insurance companies, vocational schools and nonprofits that work with low-income residents--to set up a program that provides pro bono services. That will help spread the responsibility of fixing all the cars that may be road and safety hazards. Perhaps you could be the catalyst in starting that discussion in your community. Start small, engage others and build from there.