Having an Open-Book Policy
Enough with the secrets--give your key employees the financial information they need to help you run a successful business.
Ready to open the books--to everyone? The concept that key employees should be able to see and understand a company's financials, that they should have a part in moving the numbers in the right direction, and that they should have a direct stake in the company's success makes many family business owners cringe--even though it can pay off down the road.
"In the early stages of [growth], family business owners don't have much money and don't want anyone to know," says Ernesto Poza, a family business advisor in Chagrin Falls, Ohio. In the later stages, their reasons change. "Then they don't want the IRS knowing they've struck it rich, and they find legal ways to make it seem like they're just breaking even. They're also afraid that Uncle Joe or the employees will get wind of the success, and everyone will be tapping them for money."
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