If you’re running a wildly successful and profitable business, don’t hide it. I talked to a business owner from Las Vegas once, and he was nervous to let his employees know how much money he was making.
He said, “Oh no, I wouldn’t want them to know how much money I make.”
I said, “Dude, you get driven to work in a 40-foot limousine and have two private jets. Your staff gets it!”
Sharing a percentage of a company’s profit with employees is excellent, but employees have to earn it and treat profit the same way owners do – otherwise you’re wasting it.
Every month, get all the employees to meet and review the income statement together. During that meeting, look for and obsess as a team about how to make more money, and how to save money in the business.
I learned this process twenty years ago running a painting business (College Pro Painters). I’d hired nine of my friends, and they all hated me because I seemed to be making all this money. In reality – I hadn’t started making money yet! They knew what my revenues were, but they had no idea what my expenses were, and that meant that they all thought that I was making more profit than I was.
The moral of the story?
When I started to show them that I wasn’t making any money, they got scared for me, and themselves. They thought “Hell – if we don’t get this guy to grow a little bit more, save him money, and help him be profitable – we might be out of a job part way through our year.”
Showing your employee’s income statements, as well as expenses, will show them that although a lot of money is coming in, a lot is going out too – and it will light a fire under them so they’ll work harder to make more money for the company.
Jack Stack has a program about this called the Great Game of Business.
Conclusion? Give your employees a percentage of the profit and watch how much more money you’ll start to make.
The COO Alliance is here to help with these, and many other challenges facing COOs today. For more information, apply now.