Learn what to share and what not to share when it comes to company finances.
Today, Wayne Rivers is widely considered a small business expert. He is the president of The Family Business Institute, which he started nearly two decades ago. Back then, he was in the same shoes as many of his current clients: an entrepreneur just trying to get his company off the ground. Part of that challenge was knowing what behind-the-scenes financials to share with his team.
“We didn't share in the beginning,” says Rivers. “But as we opened the culture, I wanted my employees to buy in, to share the same dreams that I have. It's a piece of it.”
The Family Business Institute boasts 10 employees and clients today, who make from $10 million to $2 billion in sales. And part of Rivers's savvy in growing his business, he says, was keeping employees in the financial know, increasing the company's cohesion.
“Its consistent with business planning—sharing 1-, 3-, and 5-year goals,” he believes. “It's a big part of making a participative culture vs. a patriarchal culture.”
Here are some guidelines for finding that sharing balance and, in turn, getting your employees to care about your company's financials.
Put Yourself in Your Employee's Shoes
The primary goal you want to accomplish is to demonstrate that your company is stable and an organization of substance,” says Barry Sloane, CEO of the Small Business Authority and Newtek Business Services. A successful company should use its financial strength to engender confidence.
“If you were a business making a lot of money you may want to show that, the bad part is it could make negotiations with your employees difficult,” says Sloane.
Also avoid sharing salaries, as that could lead to personnel drama and jealousy. Of course, keep proprietary dealings under wraps until contracts allow for it.
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