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When I was growing up, we didn’t know what restaurants and fast food joints put into their food. We didn’t know where a company’s products came from. And we certainly didn’t know the values and beliefs of a company’s CEO.
And then in a flash, all of that changed.
As entrepreneurs, we’re held to a higher standard now more than ever. With online platforms like social media, review sites, and discussion forums, transparency is critical to business success.
Transparency in business can be a great thing.
You made a commitment to your customers, investors and lenders, employees, and yourself to build the best venture you could. You might as well show everyone how you’re holding up your end of the bargain.
What Is Transparency In Business?
Business transparency is the process of being open, honest, and straightforward about various company operations.
Transparent companies share information relating to performance, small business revenue, internal processes, sourcing, pricing, and business values.
When something goes wrong in business, transparent companies don’t try to hide it. Instead, they’re upfront about the issue.
Benefits Of Transparency In Business
From increasing employee retention to boosting sales, transparency can do a lot for your small business’s reputation and success.
If your business is honest and straightforward, you may see a rise in your customer base. One study found that 94% of consumers would be loyal to a transparent brand.
Why? Because transparency in business leads to trust. And, many consumers only want to support companies they trust. That’s why deceitful companies fall off the map so quickly.
In this Information Age, customers demand stronger communication and transparency. If you don’t provide it, they’ll move on to a business who can. That goes for your employees, too.
You want to hire and retain employees you can trust. Likewise, employees want employers they can trust.
When employees trust their employers, there’s an increase in advocacy, loyalty, engagement, and commitment. If you want employees to trust you, be transparent with them. You just may see that decline in turnover and spike in productivity that all businesses aim for, too.
A Word Of Caution
In your quest for transparency, be careful not to be too transparent. What do I mean by that?
Be transparent without jeopardizing what makes your business so special. Don’t go around giving away trade secrets so your competitors can sweep the rug from under you.
You may even consider creating a confidentiality agreement so you and your employees don’t cross into the too-transparent territory.
Here’s an example of safe transparency: You can disclose the ingredients in your restaurant’s signature meal without giving away the exact recipe.
How To Join The Push For Transparency
Being transparent in business is a long-term effort. You have to consciously work towards transparency day after day. It’s not always easy, especially when you worry about how people will respond.
If you’re ready to make the commitment to transparency, follow these five tips.
1. Solidify Your Business’s Core Values
I’m a huge proponent of creating and following core values in business. It may have taken me 25 years before I put the pen to paper, but my business’s core values have always guided my decision-making and pushed me to be transparent.
At my company, Patriot Software, we have three main core values. Our second core value, We do what needs to be done without taking shortcuts, directly speaks to our desire for transparency. We strive to be honest and have integrity.
Solidifying your business’s core values makes it easy for your employees to understand and follow them. If you want your business to be transparent, everyone in your company needs to be on board.
2. Share Information With Your Employees
Another way you can work towards transparency is to share information about your business—both the good and bad—with your employees.
Chances are, your employees will find things out through the rumor mill, so you might as well beat them to the punch and keep their trust.
I’m not a fan of the rumor mill. It can cause problems with trust and hurt feelings. Not to mention, it promotes a culture of gossip.
Rather than withhold information from my employees, I regularly keep them up to date with my business’s latest news. I write an article that lays everything out on the table in our monthly internal newsletter called The Grapevine. Instead of my employees hearing things through the grapevine, they can read it directly from me in The Grapevine.
Encourage transparency in your business by writing a newsletter, hosting regular meetings, or asking managers to relay information to the employees in their departments.
3. Don’t Mask Your Prices
I’ve seen plenty of businesses try to hide or manipulate their prices. This is a huge no-no in the quest for transparency.
Now, I understand that prices can vary in some industries, especially if you need an overview of a project first. But, you should try to disclose everything you can about your prices.
Avoid using confusing language or a complicated system to withhold price information. If your prices are higher than other businesses in your industry, be upfront about your pricing. Explain what is included in your pricing. Or, consider lowering your prices.
I try to make the pricing for my payroll and accounting software clear everywhere it’s listed. My company’s payroll software price varies with the number of employees a business has. To make sure we’re transparent, my website has a tool to show the price based on employee count.
4. Get To The Point
Some businesses that aren’t comfortable with transparency beat around the bush before getting to the point.
Whether you’re updating your employees on new systems, revealing financial information to investors, or raising your prices, get to the point. People prefer a business that doesn’t hesitate to share information.
5. Be Candid About Your Experiences
As a small business owner, you need to be candid about your entrepreneurial experiences. This not only benefits your audience, but it also is great for you. When you own up to setbacks you’ve faced and mistakes you’ve made, you can learn a great deal.
I am very open about my small business experiences. I’m candid when talking about how one of my startups nearly failed. I’m open about mistakes I made when hiring and firing my first employee on the same day. I talk about the things non-transparent businesses like to cover up, like when one of my employees burnt down a laundromat.
Being transparent about your experiences doesn’t make you look like a failure. It gives other current and potential entrepreneurs hope and startup tips. Plus, it humanizes you, which helps you connect more with your customer base.
And that’s why I like to share my experiences in writing. I’ve learned a lot in my 30-plus years as an entrepreneur, and I’m still learning. I’d rather be transparent about what I am—a human being—than put on a facade.
April 3, 2019 at 11:44AM
Forbes – Entrepreneurs