When you started your company, you were probably surviving with your business banking solutions and whatever other sources of financing you could find, but that all starts to change once your revenue stream becomes more consistent.
One of those changes may be among your employees. Through the tougher parts of starting the business, some of these employees may have stayed with the company out of loyalty and belief in your dream. Now that funds are steadily coming in, they may be wondering how they will see the fruits of their labors put back into the business and their pockets. This could include questions about new equipment, office improvements or employee raises.
While you and any business partners are still figuring out what to do with the additional cash flow, employees may get antsy. Additionally, you have to decide how - if at all - you'll disclose your spending plan to your workers.
Should you be open about company finances?
In the past, company heads were not keen to the idea of transparency, and this encompassed company goals, performance and other facets in addition to finances. However, this sentiment has become less prevalent in recent years, especially with so many startups emerging.
Startups begin with a few people who share an idea and want to get it off the ground. Over time, employees who share that vision and are willing to brave the tough times get on board, and with few people having a large stake in the business, it's hard to keep information hidden.
Many CEOs understand maintaining transparency even after the company has grown is a key for employee satisfaction. If workers understand the business' success, failures and financial situation, they tend to feel more invested in the company's future. Some companies even go as far as publishing salary information for company heads.
What information can be shared?
The idea of publishing salary information appears radical to some, and although startups are ushering in a new era of company transparency, there are some aspects of your business that are more plausible to share than others. A good place to start would be decisions that will directly and immediately impact your employees.
Some startups spend their early months or years in a closet-sized office. Once the capital is available, it may be time to relocate to a bigger space. This is the kind of financial information you can share with your employees. If you're in a cramped space, they'll be happy to hear some of the expanded revenue that's coming in is going toward getting a better office. Also, if the move will come with some technology or other equipment upgrades that can make it easier for your workers to do their jobs, let them know.
Whatever the case, it is essential you're transparent sooner rather than later. The goal is to prevent or dispel rumors and unrest about how company funding is used and make employees feel valuable.
For more information about how you can grow your business, contact Landmark Bank.
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