The importance of transparency in a startup

Image Credit: Bailey Weaver

Being transparent with your whole team is something which is easy to do when things are going well. If things start to take a downturn it is easy, as a CEO, to hide away from telling your team the complete truth but this could be argued as the time when transparency is needed the most. Transparency as a startup can be created in a multitude of ways and the benefits are far reaching. When you are in the very early days with just a few employees and stakeholders, it is important to keep everyone in the loop with what happens in the company.

Monthly Updates

I keep saying it and will continue to say it. If you, as a founder, are not taking the time out of your schedule to create a monthly update to go to your investors, potential investors, employees, family, and people who you have exchanged cards who showed an interest, then you are missing out on a big opportunity. It enables reflection on where you are heading as a company, and it enables these receivers the ability to offer advice. When someone is looking at your business from the outside, they may just have something sensible to say. Being involved day in day out can leave you with tunnel vision. A new perspective is welcome.

The benefits are massive. Potential investors can already feel involved in the way you are running the company and will be more confident if you do come to raise money that you will continue in the same vein. If they know that, they will continue to receive such updates. then they can have confidence in you as a founder.

Don’t Sugarcoat Financials

If you are not keeping a track of your financials then you need to review your path into this territory. Financials are what ultimately make or break a startup. Are you getting revenue? How much are you getting? How much do you spend on customer acquisition? How is this against last month? You need to know the answers to all of this off the top of your head. You should be comfortable with letting your team know.

There are some great tools out there for showing your KPIs. I am keeping it pretty old school with it all in a Google sheet, I’m always happy to share such information with interested employees and those on my update list. If an employee shows an interest in the financials, I couldn’t be happier, it shows they care.

Problem? What problem?

It can be simple to hide away problems when they happen. Pretend they do not exist. It is simple, right? Wrong! If you have trouble paying salaries one month ,or it is going to be delayed for whatever reason, then the earliest and clearest explanation of why this is happening is going to be appreciated.

A problem shared is a problem halved.

Whilst this is a cliché saying, it holds some truth. Share with your team any problems you may have. Somebody may speak up with some unknown experience and be able to assist you with solving it or point you in the right direction. They may just be grateful that you have let them know the real situation.

It’s not all ping pong and foosball

Startups are not easy, right. Reading this blog shows that you are one of the few people who follow a life of pain and uncertainty by following the startup way of life. There are many failures and many disappointments and not everyone can get to that place where they are running a profitable business, but we can all try!

Transparency is a very important part of business. Building a culture of transparency instills trust and openness. I would not run a business any other way, what are your thoughts?