Is transparency in business important
Depending on the type of business you own or manage, you might not think there’d be much benefit to allowing your employees and or customers take a peak under the hood, right?
If you’re the chief operating officer of a large corporation like Tim Horton’s or Canadian Tire for example then your brand is pretty well known so adding another layer of visibility or transparency might not be necessary.
But what if you’re running a new business or a start-up?
Today’s market place is very crowded and competitive. There are tons of new businesses and start-ups that open every year and unfortunately many of them don’t make it. If you have a new business that you want to grow then it might make sense to offer a level of transparency that your competitors don’t. By letting investors, employees, customers, industry partners and even competitors take a peek at how you operate, it may just be what’s needed to foster more engaged involvement.
Lots of business owners and leaders talk about the value of transparency with many believing there are lots of positives that can come out of being more transparent, with minimal negatives, so why not take the approach of opening up the doors? In addition to obvious management advantages, transparency also offers a way to differentiate yourself from competitors.
How Does Transparency Work For Start-ups?
There are higher numbers of smaller businesses taking this approach, especially when it comes to disclosing financials. Entrepreneur and consultant Pierre Lechelle discussed on his website how Buffer is a great example of this. Buffer, a company selling a social media management tool, uses a website called Baremetrics to publish its revenue each month and reports on its success to the general public.
Buffer is a superb example of transparency,” said Lechelle. “They publicize their financial metrics and transparency is clearly at the center of their values. Transparency helps you to position your brand as a genuine brand and can be a source of great competitive advantage. Transparency is going to become the norm.”
There are many business owners who will struggle with this and might believe that this information is best kept confidential. Generally it’s bigger Corporations and brands resisting, but among small businesses & start-ups there’s belief that this approach will yield great benefits.
Building trust with investors
Showing transparency is a great strategy for attracting new investors to support your business. It’s often difficult to get the velocity a start up needs without help from angel investors or venture capitalists, and attracting the right ones can be difficult however it can help to show them the progress you’re making. If you have a culture of hiding, it can be perpetuated in the company and have a negative impact on the business.
Establishing positive, trusting relationships with employees
Transparency is used for more than just pitching for investors. You also want to share information with your staff, telling them that they’re trusted and valued members of the team can go a long way. If everyone in your business is kept updated on the progress of your start-up, they’ll have motivation to keep working hard and pushing the team forward.
Instilling trust among customers
Transparency is also a key building strong relationships with customers. As you go about marketing your product think about what values you expect your customer to have. Whatever matters most to your customers, find a way to emphasize the way your brand delivers it. Then be as transparent as possible about how you deliver it.
Can your business benefit from being more transparent?