The financials of your business, should you shut people out? Perhaps, the bigger question is who you should let in. My first experience as a COO was with a company where I was shut out of the financial picture of the business. I ended up out on the street as the company ran out of money and essentially folded. Looking back, I know that the owner of the company could have helped himself and the company, if he would have let us in more.
Your business financials can be a sensitive topic, filled with sensitive information on how the business is doing. More importantly, it can be a tool to let other people know how you’re doing as well.
As a business owner, you can have an abundance mentality on the subject or a scarcity mentality. The abundance mentality says that you are comfortable with letting certain team members in the financial picture. You do this because you realize that when people know the score, it will push them to do better. In the scarcity mentality you worry that your team will judge you for your success and hold it against you.
Here’s a reality check on how most of your team perceive the business and the finances of that business.
- Your team knows that you make more than they do.
- Your team cares about the financial success of the business. The success reflects on them as well.
- They won’t hold your success against you.
- Your team wants to know the score and get plugged into the big picture of what’s happening and what the next level is.
With that being said here are some people you will want to get involved in the finances of your business:
- All leaders and managers on your team: As my personal experience suggests, this is important. This would seem to go without saying, but I still run into business owners that shut their management team out of the financial aspects of the business. Your leaders are most responsible for managing your resources effectively. If they don’t know the financial picture of the business, there is no way they can manage your business effectively.
- Team members who have a vested interest in certain line items on your profit and loss. Do you have a team member that orders supplies? Do you have a team member that orders product? Any team member that has any sort of purchasing authority should understand, know and track the line items on your profit and loss that they are responsible for. In fact, I like to also bonus them based on how well they manage that particular line item. The more you can plug these team members in, the better that they will manage your money.
- All team members should have a high level understanding of the financials. Every member of your team should understand revenue, margins, etc. of the business. The more they know and understand this, the better they connect to the goals that you set for the business.
We live in a world where people value transparency at a high level. Shutting people out of the big picture is an outdated way of thinking. Don’t be afraid to plug your team into the financial aspects of your business at a level that matches their need to know in the business. Your business will only perform better as a result.