As small business owners, we have a responsibility to avoid and protect our business from conflicts of interest. Conflicts of interest can have a negative impact on our brand through loss of income, strained relationships, legal risks, a confused client base, etc. Conflicts of interest not only impact us but those we support(family, team members, business partners).
Conflicts of interest happen when you are in an existing relationship (paid or unpaid) with a business and then enter into a new relationship with a competing business that personally benefits you and has the potential to have a negative impact on the existing relationship.
- Paying for a service/product with the intent to use gained information to benefit your business or a new business relationship in the form of a competing service/product.
- Example: You attend a workshop, with the intent to gather information to host your own workshop serving the same audience.
- Example: You purchase a course, with the intent to see behind-the-scenes so you can write your own course serving the same audience.
- Example: While representing a business as an ambassador, volunteer, leader, or employee, you purchase from a competitor or participate in a competing business’s event with the intent to use gained knowledge to benefit your existing business relationship.
- Partnering with a business with the intent to use gained information to benefit your business or a new business relationship in the form of a competing service/product.
- Example: You partner with another business and decide to offer a similar service and/or product that competes with them for the same audience.
- Example: You use confidential information gained from a business meeting to benefit you and that would take away from the other business either in resources and/or revenue.
- Partnering with a new business to benefit your business while still conducting business within a previous business relationship and both businesses are competitors.
- Example: Taking on a new role to represent a business as an ambassador, volunteer, leader, or employee while still in a business relationship with a competitor.
The lack of disclosure about your business relationships contributes to the inability for all parties to protect their interests and contributes to a conflict of interest. It is not the sole responsibility of the other businesses to ask if there are any conflicts of interests; the responsibility falls on you to be proactive. Therefore it is up to you to maintain your professional integrity by making wise choices and protecting your business relationships.
*Espresso Series – Short daily opinions and thoughts about business from our founder.