Use Transparency to Drive Your Business Success
Gina, the small business owner of an organic soap company, noticed a decline in sales over the past month. She spent the morning reviewing her monthly sales figures compared to the last quarter. Her suspicions were confirmed, and the trend was worrisome. Sales were definitely on the decline.
Gina’s organic soap company has been in business for five years and has grown steadily. However, with inflation and supply chain costs increasing, Gina had to source more affordable materials. The new ingredients had made a noticeable difference in the quality of her products.
As if sales weren’t a big enough concern, her employees had let her know they weren’t happy with some new policies she had recently implemented. Gina began restricting overtime to keep labor costs lower. Now it seems both customers and employees were unhappy with her soap company.
Gina knows she needs to make changes to improve sales and employee morale quickly. Researching some online articles, she realizes the problems stem from a need for more transparency with her customers and employees.
Today’s entrepreneurs are expected to maintain higher business standards than previous generations. The internet has revolutionized customer and employee expectations by making information readily available through review sites, social media, and other online platforms.
What is Business Transparency?
According to an article by Forbes, business transparency is “the process of being open, honest, and straightforward about various company operations.” It’s no longer considered good practice for companies to remain quiet on processes, ingredients, or employee compensation. Your small business has a higher chance of long-term success by sharing information important to your customers and employees.
Implement Transparency in Your Small Business
Now that Gina understands why sales and employee performance are trending down, she has implemented some new changes to her business practices.
- Ingredient Transparency: Gina has stopped purchasing the lower quality supplies that had changed her product offerings. She went back to her original ingredients and increased her prices to cover her increased costs. Gina now offers a list of ingredients each product contains online and in-store. She has also posted a prominent sign commenting on her price increases and how this results from increased costs. She also explains that even though the prices have gone up, she is committed to providing the same quality product her loyal customers have enjoyed. Happily, Gina has started seeing her revenues trend back to where they were last quarter.
- Employee Wage Transparency: Gina understands how key employees are to drive business success. She develops a compensation structure laying out wages, benefits, and opportunities for advancement for each position. She holds a meeting explaining the changes in her product costs and why she has had to raise prices and limit overtime. Gina actively encourages employees to ask questions during the session. Since then, employee morale and engagement have improved significantly. Customer service has also improved.
- Decision-Making Transparency: After the success of her employee meeting, Gina wanted to encourage her employees to stay engaged in the decision-making processes. She set up a whiteboard in the lunchroom for employees to write down ideas and suggestions. Gina’s employees see that she is striving to maintain open communication, which has helped them feel like valued team members.
Increased Customer and Employee Trust
Gina’s customers have started to leave positive feedback on her website again. They frequently state how they appreciate knowing what is in the products they purchase and that the better quality is worth the higher prices.
The employees of the soap company enjoy work and often provide great ideas for product promotions or process improvements. Employee satisfaction has helped give the soap company an excellent reputation in the community, leading to increased sales.
How Can You Improve Your Small Business Transparency?
Are there areas in your small business that can benefit from increased transparency? Ask customers and employees what you can do to improve communications.
Small changes in how your business engages with customers and employees can go a long way in growing your small business.