Part 32: AVOIDING ILLEGAL AND UNETHICAL ACTIVITIES – How Small & Mid Sized Companies Grow

There is a difference between being a sharp business person and taking advantage of a situation by being “creative” and doing things that are beyond the law or ethically wrong. One can get into trouble by engaging in such activities either on purpose or by lack of oversight. We will focus here on what one knowingly does. One can justify these types of behaviors by saying that they could not have survived or prospered if they did not engage in them. Although that may well be true, if you were to be caught would the ramifications be worth the risk? Some people are high risk takers, but if they are not careful or lucky there’s a good chance they’ll be caught. The question is do you want to sacrifice your business and your reputation by your risky behavior? Here are two examples.

Let’s assume you are providing a prompt payment discount of 5% for invoices paid in less then 15 days, which is more generous then most such discounts and have enticed many customers to do business with you. But your definitions of what qualifies as 15 days as your “start” and “end” dates were very atypical and buried in a 20 page Terms and Conditions memorandum that no one actually reads. This, as opposed to the customary “start” date of the invoice postmark date and the “end” date as their check remittance postmark date “. Many clients thought that they were in compliance, only to be told that they did not qualify for the 5% discount. This unethical practice (scam) may work in the short term, but result in the loss of business in the long term, as your reputation suffers as dissatisfied customers post comments on Yelp and other social media.

An example of an illegal practice would be to do business in a state without the required business license. Let’s assume you did only a few percent of your sales there and you assumed that since they never bothered you before about a business license no one would check on your license now. But with state budgets running very thin, they are now looking for every penny they can and that decision opened up your entire business to the long arm of the law. You were found guilty of fraud, convicted and penalized by preventing you from doing business in that state for the next 5 years. This caused you to pay past due fines and penalties worth several times what you “saved” over the last several years.

We will next talk about recruiting people that fit your corporate culture.

We welcome your questions as to the challenges you face in order to grow.

To see all articles in this series please go to

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.


Leave a Reply