Money in small business feels like Australian weather, either drought or flood, always unpredictable and not knowing when the season will change. It’s is a juggling act, and can be a tough gig at times, with lots of priorities to manage, stress about future revenues and costs; always with the nagging fear that hard times are just around the corner. Decisions that you make can have a big impact on the business and your personal finances. If that’s not enough, once you have a team, there are many additional expectations and emotions to consider. Your financial decisions will affect them too and, ultimately your business. Team members are like children, in that they pick up on all the subtle clues of what is going on behind the scenes, and you can also be certain they are talking amongst themselves.
In a business environment where talent rules, keeping your team engaged is keeping your business in front. One thing is for sure, is that being perceived as a stingy business owner is a culture killer. Your employees might suck up poor equipment, being asked to work more, paid poorly, stingy (or no) pay increases or cheapskate gifts, but only if they feel that the owner is in the same boat. If they feel connected to the business, are committed to the long term and see a rosier future, great people will stick around. But it all comes unstuck, when those team members who win big contracts and see the business owner living it up. The archaic attitude of expecting gratitude just for having the job is no longer enough; the days of master and slave are long gone.
Transparency about business finances is rare in small business, yet the benefits can be great if business owners are brave enough to share the real story. In good times, your team are likely to celebrate financial successes with you and in fact to be buoyed to drive the business further; so long as they are sharing the experience, share the rewards and they feel part of the business. Conversely, if they feel the boss is doing it tough – any working hard for the company - they are more likely to work harder, find solutions and tighten their belts to see the business though.
The cost of great employees leaving your business is significant, but since it’s difficult to calculate, sometimes it’s easy to easy to dismiss or overlook. I have seen business owners squabble over 50c per hour increases, to have someone leave that generates $200K per year. Or let team members struggle with outdated computers, only to purchase new cars and houses soon after. In another, the business owner harassed the team to work after hours and weekends for no extra pay, just after returning from a trip to Europe. Another, winning a multimillion dollar contact and not so much as a thank you, let alone a celebration lunch. Too many pens or liquid paper? Employees just roll their collective eyes; it’s hack business management.
Don’t be afraid that your team will resent you for business success, they appreciate that you are the owner. Transparency makes them feel that they are partners in the business, and are part of the success. It also makes them step up in tough times. Being perceived as greedy or tight ass is poison for culture and any money you save in the short term, you will lose many times over in the long run.