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Ways to Support Transparency in a Startup | CoverWallet

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Transparency has increased in popularity, most especially in the business world. Now, it is more crucial for companies, especially startups, to be more transparent in the way they do business. With today's highly competitive environment, a lot of startups are struggling to succeed and stand out from the crowd. For this reason, these startups are considering being more transparent by sharing their numbers to the general public. Meaning their income, goals, future plans, or even their difficulties and failures are made available to the public and accessible anytime they want to view it.

The idea here is not to intimidate other companies or brag, or compromise security, but to let the people know more deeply about your business. Your goal in being transparent is to make your viewers feel more involved and get them interested in what you are offering. And one way you can do this is, yes, by sharing your company’s information such as who your current employees are, who your customers are, or what activities your business currently does. If done the right way, being transparent as a startup will help you maintain a successful and growing business.

Let us give you some useful tips you might want to consider to have a higher transparency level.

Financials matter!

Not so long ago, it was thought that you’re better off by not sharing information about your financials. Well, that is no longer the case!

Matthew Bellows, the Founder and Chairman of the Board at Yesware, a sales productivity platform, shared his past experiences about transparency in his interview with the New York Times. He shared that when he was still employed during when the bubble was bursting, his former boss didn’t tell him what was going on during the very long, closed-door meetings of the top executives, which left him always wondering and nervous. So, when he became the leader of his own company, he made sure to be more transparent and to share information with his employees.

Internally, keeping your employees in the loop about your current financial situation as well as your future financial goals, especially in startups, is truly essential. However, information should be shared the right way and employees should be able to clearly understand the numbers and objectives. Giving your employees access to valuable company information can motivate them to better perform and be more productive, as they know that their productivity can actually positively affect the startup’s revenues and growth.

This is also true for prospects and current customers. By being transparent of your financial status, your customers will feel more comfortable and secure because they know where their money goes; the same applies with prospects where transparency leads to higher conversion rates as prospects have trust and confidence because they have a very clear view of where your business stands and where it is going.

There are some possible risks of being transparent, however, and the number one would be competition. If your startup is doing really well and you share your financial report, one or more of your viewers or audiences might want to try to copy your business thinking they would also be as successful as you. Don’t fret and don’t let it affect you, though, because customers are wiser and they know exactly which business is the original and which is not. Besides, those who copy are always a step behind!

Why choose flatten hierarchy?

There are some businesses that run their companies with no managers – it’s called “flat organization”. Most likely, when you’re just starting out and have a very small number of employees, this would be the way you would be operating your business. However, as your company grows, you have to consider the fact that the environment in a startup is usually dynamic and reporting should happen on a daily basis, so employees should have a percentage of flexibility and empowerment to take actions. That is why it’s important for startups to eventually have the right management hierarchy starting from the President or the startup CEO, followed by the Vice-President, Managers, and then the other employees. Flattening hierarchy could be of great help in having a smooth workflow at work, and most importantly, it helps in creating a transparent environment at all times.

What about customers?

After establishing a strong and transparent relationship with your employees, you now need to consider having and keeping a good one with your customers. Having your customers feel like you’re hiding something from them is not something you want. Being transparent with your customers, when it comes to what you’re offering to them and how you would do it, is crucial to increase their trust and confidence level and make them come back again.

Transparency in startups is, in its entire context, providing great customer experience and customer satisfaction, and building trust, therefore, building stronger relationships between you and your customers. And when there are strong business relationships, your small business will be more profitable and you will be a step closer to reaching your goals.

How to deal with bad news?

Have you heard of the news about the marital status of Amazon owner Jeff Bezos? There are some rumors that have circulated that Jeff Bezos and his wife are having marital problems. So, before the news gets even bigger, Jeff Bezos addressed the rumors by announcing his divorce with his wife. He became transparent right away before the news could create greater damage to his business. He somehow assured the public, especially the investors, that there is nothing to worry about because there wouldn’t be a problem as they separated on good terms.

No matter how small or big your business is there could be some bad news, whether rumors or not, that you might face along the way. This bad news can affect your team internally, or can possibly affect your business’s image to the public, which can cause them to lose their confidence in doing business with you. The best way to deal with it is to address the issue and maintain an honest attitude. At these delicate moments, you don't want to make the wrong move that will get you into more trouble. Make sure you are transparent with whoever could be affected by the news or the rumors and check how you can fix the situation with the least damage possible.

Final thoughts!

In the business world, being transparent is not a choice, but more of a way of conducting work that will define the culture and the processes of your startup. Just like what Joel Gascoigne, Founder, and CEO of Buffer – a software that is meant to aid businesses and marketing teams schedule their posts and analyze its performance – believes in regarding transparency, it is meant to breed trust, and trust is the foundation of great teamwork. Yes, there might be risks involved in being transparent, but its benefits definitely outweigh the risks. When you embrace transparency, people you work with – your employees or team members, your customers, or your investors – are also transparent in the way they work. You’re also assured of a homogeneous environment where all parties involved are all on the same page, are open and share issues with each other, and are focusing on achieving the same goals.