Ask Us How: The Importance of Transparency in your Business
Published on October 16, 2013 under NSW Business Chamber Partnership
Your transparency as an organisation can play an important role in the type of reputation you develop amongst your customers, investors, stakeholders, employees and peers. It's so important, because transparency is a key component in developing trust. If you're open with everything, if you share things with everyone, and seemingly have nothing to hide, you will build greater trust with all of the above. If they trust you, they will believe in you. If they believe in you, they will buy your products, work for your company, and buy your stock. And all this is vital for your bottom line and your results.
A successful business is the result of a team effort - likewise, the failure of a business usually occurs because everyone was not working together. Listed below are few tips for maintaining clarity and transparency throughout the life of your business.
TIPS FOR MAINTAINING CLARITY AND TRANSPARENCY IN YOUR BUSINESS
1. SET MEASURABLE TARGETS
The core of every successful business lies in clearly pre-defining your business goals and objectives, so that everyone can invest their efforts in the same direction and work towards a common business target. Although defining the purpose of your small business may sound like an easy task, specifically articulating measurable and realistic business goals and objectives is not quite as simple.
In simple words, businesses that dedicate time and attention towards clear-cut and well-defined business goals and objectives stand a better chance of achieving greater success.
2. EVALUATE YOUR BUSINESS REGULARLY
There is a definite relationship between transparency and success in a small business. If you are clear about what you want to accomplish, you will also know how to get there. Therefore, more clarity means more success, which in turn means more profits for your business. You should make it a point to integrate clarity and transparency in your business on a regular basis, especially when it comes to finances. As the business owner, you should know where your business stands with regard to finances and profitability at all times; and you should also make this information available to your employees and investors.
By operating your business with complete transparency, you will be able to evaluate your business constantly so that you (and your investors and employees) are aware of where your business is heading and details on the growth and development of your business, which will enable you to make any changes that are necessary. And your employees and investors will know that they are key to the process of helping the business stay viable.
3. OTHER WAYS TO MAINTAIN BUSINESS CLARITY
Before everyone else, you, the business owner, need to have a clear and precise picture of all your business activities. Only then can you convince your other staff members and motivate them agree with your viewpoint. Once you are sure about where the business needs to go and how you want to get it there, the next step is much easier.
The next stage involves spelling out your business plan in order to reach your goal and keep your business progressing on the right track. Once the plans have been laid to achieve your goal, you then need to assign each employee to their role on the team on an individual basis so that they can execute their responsibilities satisfactorily.
Ensure that every individual's job is stated clearly and supported with the necessary training and instructions. This is necessary so that all the employees are aware of what you expect from them. In other words, make it a point to ensure that clarity and transparency permeates all levels of your organisation so that everyone can concentrate their time and effort in the same direction towards the accomplishment of one common goal.
For a small business owner, complete business transparency can be frightening, especially where finances are concerned. But transparency will not only make your business easier to run, it will also make it more successful and attractive to both employees and potential investors.
BENEFITS OF A TRANSPARENT BUSINESS
There are four other major benefits to having a transparent business, whether on the internet or in physical locations. They include the following:
1. AN INCREASED REVENUE FOR YOUR BUSINESS.
Employing some method of transparency to your business can increase business revenue. Transparency includes truth and specification for your customers.
2. PROBLEM SOLVING
Having transparency in your business can not only help to identify problems but also solve those problems. Should there be a problem with one of your products, such as malfunctioning, you should notify your customer base of any product testing and evaluation being performed so they are in the know and do not switch companies.
3. INNOVATION AND EMPLOYEE COMMITMENT
Being transparent does not just deal with customers, but also the entire employee and management staff of the company. If the employees know what areas of the company are performing well, as well as underperforming, they will be more likely to work towards the company’s goals. Two main aspects of gaining employee commitment are openness and trust.
4. CONSUMER TRUST
Company openness and truthfulness allow consumers to trust companies.
Business transparency can improve the profitability of a company, deepen employee commitment, develop trust, allow for efficient problem solving, and help to overall improve the success of a business.
Investors should seek disclosure and simplicity. The more companies say about where they are making money and how they are spending their resources, the more confident investors can be about their fundamentals.
It is important to recognise that developing transparency requires commitment over the long-term, and that you develop it (or undermine it) one step and one action at a time. The good news is that if you embrace it, you may soon find it has become one of your greatest assets and a key contributor to a healthy bottom line.