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A Pledge for Ethics

Written by Jeffrey R. Armstrong – President/Owner of Armstrong Capital

Your favorite Master Note Buyer – Straightforward, Honest, Fair…

The discount on the note was deep.  The note holder had to think long and hard about accepting the offer but the consultant held firm on the price. “Ok, let’s go ahead,” the note holder finally decided.  “I need the cash and it will really help me out.”  So she decided to proceed.

Then after the due diligence had been performed the paperwork arrived.  The amount quoted was there, just as agreed, but buried in the agreement were a host of additional charges for credit checks, appraisals, title work, overnight fees, document prep fees and the like.  Suddenly the deal came to a screeching halt.  The note holder was not only angry, but began to question the integrity of the note broker and decided to look elsewhere.

All of us in business for ourselves feel a bit intimidated when giving the prices and options.  We don’t want to turn off the note holder with a big discount.  But we also need to cover our costs, our overhead, our time and hopefully have some profit left over, and we can’t exactly know precisely what hurdles will arise over the course of a transaction.

The problem, though, was not the price.  It was about the note brokers’ effort to slip in additional deductions at the last minute.  It was about ethics and integrity and the ability to trust that those we are doing business with are operating honestly.

As self-employed individuals, integrity is our greatest asset.  Because we are the boss, the one thing that we can guarantee our note holders is that they will be working with us directly and can be confident that there won’t be any surprises when they receive the agreement.

That means always being up front about potential hurdles right from the start.  Such as, “our price is subject to verification of the information given and acceptance of credit, appraisal and title”.  Of course we’d like to be able to deduct all expenses and charge for all of the time we put into a transaction.  But potential note sellers respond better to a fixed price with no deductions.  Thus, many find it is best to give a net price to the note holder with no deductions for the costs of due diligence.  However, you do it just be sure to keep all transaction discussions above board and to be up front.

A few years ago I came across a book written by Shel Horowitz entitled Principled Profit: Marketing That Puts People First.  As I read through the book it seemed as though he was writing about me and how I’ve run my business for the last 19 years! My straightforward, honest and fair approach to business is exactly what he writes about.  Shel is so passionate about ethics in business that he has created a “Business Ethics Pledge” on his website for businesses to sign at  I have signed it and I hope you will too.  I have also created in conjunction with top note industry professionals a Code of Ethics and Conduct for the Note Industry.  In our “what’s in it for me?” culture, you’ll be glad to know the benefits that signing the Business Ethics Pledge and the Code of Ethics and Conduct for the Note Industry offers you and your company.  Let’s start with the most important.

Signing the Pledge creates trust

Every consumer has been ripped off at some point. We all want to do business with companies we can trust. Your signature on the Pledge shows that you have a commitment to base your business in ethics and quality—that you can be trusted. Displaying the Pledge logo on your website, your brochures or newsletters helps convince prospects to give you a try, and first-time customers to return (and tell their friends). And if there’s a problem, the customer of a business that proudly displays the Pledge logo is more likely to try to settle the issue, with a positive outcome for both sides—and less likely to go out and grumble to the world about the shoddy experience. (We all know that the customer who actually reports a problem to the management is doing the business a huge favor, by offering the chance to make it right.)

Of course, you have to “walk your talk.” If the customer experience is in keeping with the Pledge philosophy, you can generate a loyalist, a fan who will enthusiastically recommend you to others. But if the Pledge raises false expectations and hopes, and the reality is the same old sleazy stuff that customer has rejected elsewhere, you face a backlash. Thus, taking the Pledge is a commitment. You are saying to your prospects that yours is a company worth dealing with, because your company would rather do the right thing (and build customer relationships that last years) than burn people for a quick one-time buck.

You’re in the forefront of a movement to make a better society

Why are you in business? Most entrepreneurs answer, “To make a difference.” By joining the Pledge campaign, you put your actions in alignment with your beliefs. And you participate in a movement that has the potential to change the world—so that when you hear someone attacking business owners as sleazy and selfish, you can say you’re part of a movement to reinvent the entire business culture as socially responsible and concerned about creating a better world.

Concrete advantages in the here and now

If you choose to be a public spokesperson for the Pledge, you can reach new audiences when a reporter contacts you to ask about your participation. And even if you haven’t identified yourself as a willing spokesperson, by bringing up the Pledge movement when reporters interview you about other matters, you can parlay small stories into larger or more frequent ones. The Pledge can be part of your buzz-building campaign! I’ve seen many, many news stories that featured a business’s commitment to ethical practices as newsworthy; the Pledge helps you get your share of that coverage.

Ethics is defined as a branch of philosophy dealing with what is good and bad and with moral duty and obligation; the principles of moral conduct governing an individual or a group.  With the recent tough market conditions, I just want you to think about how you currently conduct business and the way you intend to conduct your business in the future.  Decide once and for all that the ethical way is the only way.  TWITA!

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