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.
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