In today’s episode, we delve into a crucial question: Should you share the financial performance numbers of your business with your team? It’s a topic that can send shivers down the spine of many entrepreneurs, but it’s one that holds significant importance.

Let me take you back about a decade ago when I had a client grappling with a thin operating margin. Despite his increasing frustration over his team members’ tendency to give away discounts, he hesitated to disclose the true financial picture. Why? Simply put, he didn’t want them to know how much he was making.

However, what he didn’t realize was that his team members had misconceptions about the business’s profitability. When he finally mustered the courage to sit down with them and reveal the operating margins, their shock was palpable. The truth was stark: only a mere 5% remained after covering costs, overheads, and taxes.

This revelation was a game-changer. Suddenly, his team members understood the gravity of their actions. Every discount they offered directly impacted the bottom line. This scenario prompts a critical question for every business owner: Where are the gaps in knowledge within your team?

Transparency doesn’t mean divulging every detail; it’s about providing the right information for informed decision-making. Concepts like gross margin, operating margin, debtor days, and creditor days are essential for all team members to grasp. Armed with this knowledge and actual data, they can make better decisions, understanding the broader context of their actions.

But sharing numbers is just the beginning. It’s crucial to follow up with education on how each team member’s actions influence these metrics. This empowerment leads to smarter decisions, a more successful business, and ultimately, a healthier bottom line.

So, should you share the numbers? Absolutely. It’s not just about financial transparency; it’s about fostering a culture of accountability and informed decision-making within your team. And the results? More successful businesses, better decisions, and perhaps a little extra in the bank.

Before you go, I have a quick favor to ask. If you’ve found value in this content and believe it can benefit other business owners, please consider subscribing to our channel. Your support helps us reach more entrepreneurs like you. Thank you!