Theft in small business
One of the common complaints I hear from owners of small businesses is that employee dishonesty runs rampant. These complaints come most often from busy cash-based businesses like shops and cafes.
Some owners learn to live with an ‘acceptable’ level of dishonesty, having come quite cynical about the possibility of total eradication. They treat the loss just like another business expense.
Opportunistic theft of cash often arises because many people have the mistaken belief that only the wealthy are in business. The logic is that they can afford it and if any more justification is needed, it is that the thief is underpaid and overworked.
Serial theft seems to occur when people become bored, disinterested or disillusioned. Access and opportunity, combined with lack of supervision, lack of systems and lack of employee accountability can create the environment for systematic dishonesty and deceit.
One of the golden rules of business is not to entrust anyone with sole guardianship or sole access to cash. Two people and separation of their duties is a classic cash handling safeguard, because it is much more difficult for two people to collude in dishonesty. However, this is not always possible in a small business, so you must look for symptoms.
As a Business Consultant who has walked into many businesses as ‘Mr. Fixit’ on behalf of banks and remote owners, there are a few classic symptoms to look for. One is identifying any person who never takes a day off and never takes holidays.
Serial dishonesty needs to be covered up and the perpetrator will never risk anyone else looking at what they have been doing. The reason they give for not taking holidays is always the same. They would have you believe that they are so busy and so caring about your business that they can’t afford to take time off.
Hence, the irony is that it is often the person who appears to be the hardest worker, the most trusted and the most dedicated to your business, who is ripping you off.
Until next time!
Gary