Honesty In Business - Does It Pay? Is Honesty The Best Policy?

I guess you have heard it said that honesty is the best policy.

Unfortunately, many of the people who say that are dishonest themselves. They only pay lip service to honesty.

Consequently, they lie and cheat whenever it is convenient to do so.

The truth is . . . many people are honest only to the point where there is the possibility of being caught and when sanctions are applied without fear or favor.

Those same people will be dishonest whenever the chances of being caught is slim or where sanctions are hardly applied due to corruption of the institutions meant to apply the sanctions.

The result?

Explosion of corruption.

Now to the business world.

The goal of every business is to maximize profit. The more transactions a business engages in, the more the profit potentials. And the greater the profit margin per transaction, the greater the overall profit of the business.

Hence, business managers seek to maximize the returns per transaction in order to maximize the profitability of the business.

Honesty in business, on the other hand, means you lose opportunities to make more from each transaction because you tell the truth.

Here's a typical example.

Suppose you're an electronics technician. A client brings her electronics to you. The fault? The electronics equipment does not come on when she powers it.

You do a routine check and find that the problem is a blown fuse. If you tell her the truth about the problem, she will pay you less because it will take just a few minutes to fix.

Bottom line.

Your earnings for this transaction will be small. Several small transactions like this will mean your earnings for the month will be small. And you have serious bills to pay!

Therefore, you may be tempted to get more from this client by magnifying the problem. For example, you may tell the client that the problem is a burnt transformer.

She believes you. She trusts your judgment. So she pays for the cost of getting a new transformer. And since installing a new transformer takes a lot of time, she pays much more in service fees or professional fees.

You go home a happy man because you made a nice profit for the day.

You fooled her successfully. And she may never know it.

The problem is that you won't stop there. Once you've tasted the ease of making huge amounts of money for little work, your greed will take over. You will begin to look for fresh ways to cut corners, outsmart your clients, and make more money.

The good news is this . . . sooner or later you will be caught. Then the news will spread like wild fire. Your credibility will be consumed by the flames of your clients' rage. And so will your source of income.

So, does honesty in business pay?

Yes.

How?

When you're known to be honest, people are comfortable doing business with you. They know they can trust you.

Often they will test you out to be sure the reports they heard about your honesty is true. Then they will begin to trust you big time.

They will return to do business with you. And they will tell friends and family. They are proud to recommend you because they know you won't let them down. They know they can trust you to keep your word.

As the news spreads, your business grows. Honesty in business results in customer satisfaction which results in more business.

Yes, your profit margin per customer may be low, but multiply that by the increased volume of business you get due to your honest dealings and you get a huge profit.

There's another advantage of honesty in business . . . you build a long-term business.

Dishonesty destroys your business. Any gains and benefits you get from being dishonest is only temporary. When the truth gets in the open, you will lose everything.

Want to build a lasting business?

Make honesty the only policy in your business. Honesty in business is, indeed, the best policy.

For me, it's honesty or nothing.

Do the same and you will be happy. You will build a real business . . . a profitable long-term business.

About The Author
Samson Itoje is a freelance writer. He is the author of http://www.nigerianewsjournal.com. Discuss this article and other business issues in the forum at http://www.lagos-nigeria-real-estate-advisor.com/business-forum.html