Sharing Some Financial Information With Your Staff May Be Beneficial To Your Business
I recently had a conversation with the owner of a snow contracting business about budgets, sharing numbers and the overall attitude his employees had about the value of his company, what he makes from it, and the various costs associated with running the business. He began involving his staff in the budget process this past summer. Most of those who chose to become involved were shocked by what it costs to have a snow contracting business up and running. They had some difficulty believing the insurance costs, the costs for cell phones for key staff as well as what it costs to buy tires (a lot of them) for the equipment they use. This was an eye opening experience for the company owner AND the staff. When some of them expressed doubt about the numbers, he got the corresponding file and let them look through it to see for themselves what it was costing.
The employees made some heartfelt recommendations about how they might cut costs. The real eye-opener was when they went through the entire budget and then backed into the revenues required to cover all this expense. Then, they drilled down specifically to determine just how much new business was needed to cover the costs of new equipment everybody thought would be a good idea. When the outside sales team found out just how much they needed to generate in order to cover all these new “wants” (rather than “needs”) it was almost comical to see that some of the landscape foreman really didn’t need to have a new I-Phone this season, and the Area Managers for the snow portion of the business could probably get by with a regular cell phone.
So – the owner is now working on getting his budget and accounting figures put into a “cloud based” system so everyone can have access to the numbers. This system will allow him to restrict what certain levels of staff can see and view (and that is a good thing), but everyone can then have an impact on the numbers that pertain to what THEY do in the business. What an outstanding idea – letting the employees see just how much is involved in running the business (monetarily). And, it’s amazing the reaction….. “I didn’t know the phone service cost THAT much!!” and “It costs HOW much to insure the plowtrucks?”
In this case – some knowledge is a good thing. This kind of attitude would likely stave off the potential for disaster if everyone could pull together and figure out how to be cost effective in the operation of the business.