Are You A Liar Or Not?

I was told a story last week about a Company Director who was hosting a dinner party/business meeting in a plush and upmarket apartment in Central London. He was asked whether he owned the freehold of the apartment (worth millions)…. he said he did. His business contact then reminded him that for £3 he could find out whether he was telling the truth, he didn’t back down. The truth is that he doesn’t own it, but he lost all credibility because this person knew that he was a liar and perhaps couldn’t be trusted.

Jump forward to The Apprentice and Yasmina Siadatan’s interview in the Semi Final where she claimed that her restaurant trading under the name of MYP UK Limited was turning approx £8,000 per week and had a gross (sic) profit of 4.5% this would mean that the net profit would have been in the region of £19,000 per annum. (Actual turnover for the company is apparently approx £290,000 per annum with a net profit of around £8,000)

She was, for a Finance Director, naïve enough not to realise that Alan Sugar, you or I could obtain the annual accounts. The programme suggested that she was not telling the truth but it actually showed that she was a very poor accountant. As the restaurant had only been trading for 9 months pro rata she maybe WAS telling the truth, but the lack of technical knowledge meant that she was unable to explain herself.

These two people were both naïve, one simply wanted other people to think that he were doing better than he really was and the other didn’t want to admit her own weaknesses. Even though she was a Finance Director Yasmina Siadatan knew nothing about finance.

But when you have something to lose such as when negotiating with buyers of your business, honesty is not the best policy, but is the only way forward. At best you can lose face when found out, at worst you can be sued for damages should someone rely on your representations in buying your business.

If you know something isnt true dont lie about it, if you are not sure about the answer, dont be afraid to admit that you need to ask advice before answering.

This entry was posted on 04/06/2009 at 06:05 pm and is filed under Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.