Many business owners worry about sharing too much information with employees. They may figure it will either turn pliant workers into resentful critics or bore staffers who don’t care about the company’s numbers. But the secret of communicating financial data with your team is to track profit and loss while also teaching them to read a balance sheet. Don’t dwell on one element without the other. According to John Witt, CEO of Witt Plastics in Greenville, Ohio, “So many companies just concentrate on the P&L statement, but that’s not enough. You can make a lot of money in a given quarter, but have no money in the bank or very low margins. I want my employees to understand our balance sheet along with the P&L.” While Witt’s 115 employees appreciate these issues, the hundreds of thousands of workers at General Motors may wonder what’s going on. When they hear that GM earned a record $6.7 billion in 1997, they understandably demand higher pay and better benefits. But that $6.7 billion produced a paltry net margin of only 3.9 percent (by contrast, Ford earned $6.9 billion in profits with $25 billion less in revenues).
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips.
If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/7820/unlock-the-mystery-of-openbook-management "