Why your startup should care about transparency and how to implement it

A lot of factors go into a startup to make it successful. It starts with a solid business idea, followed by adequate funding, market research, and a lot of hard work and determination. Another thing that can make a startup successful is transparency. In a nutshell, this means informing your employees and the public about business goals, revenues, plans, and even setbacks or challenges. Transparency is making business information accessible to people.

You may be thinking, what’s the point? What do those figures mean for your customers, anyway? And, couldn’t that pose a security risk? The idea behind transparency is to make your target audience more involved in the business and have a deeper understanding of your products or services. This approach has become more popular in the last several years as companies strive to stand out from the competition. When people know more about your business, they will be more interested in your products or services and be instrumental in your growth and success.

How can you increase the transparency level of a startup? Here are some tips to take into account:

• Share financial information. Gone are the days when businesses kept their finances to themselves. Within the startup, sharing financial details with employees can help them understand the company’s goals and how to achieve them. Informing them about the startup’s plans for the future will increase productivity. When employees know how their roles affect business growth, they will appreciate their jobs with more motivation. Being transparent is also beneficial for your target market. When existing and potential customers know the financial situation of the startup, they will be more confident in spending money on its products or services.

• Opt for a horizontal organizational structure. Also called flat hierarchy or flat organization, a horizontal structure means that there are few or no levels of management between the managers and employees. This approach encourages employee involvement in the decision-making process, a smoother workflow, and promotes transparency in the workplace.

• Be honest especially in times of crisis. Running a startup is not always sunshine and roses. Small and large businesses, regardless of industry, need to deal with challenges and negative publicity at some point. When something bad happens, the key is damage control. Address the issue right away before it gets blown out of proportion. A crisis can make or break a business. It can affect not only your employees but also your target market, so it’s important to be honest to maintain the public’s trust and keep the damages to a minimum.

• Buy business insurance.There’s something comforting in knowing that you have something to rely on in case an accident or unexpected incident occurs. Insurance protects your business against significant financial losses, but it also helps you become more transparent. It shows that as a startup owner, you have a sense of responsibility to take care of your team and customers. It establishes trust. It informs people that you have the foresight to protect your business from potential risks.

With so many insurance products out there, how will you know which coverage to choose? The type of insurance varies depending on the nature of the startup, the state where it’s located, as well as the different business activities. Consider getting General Liability coverage which protects the startup against losses associated with bodily injury or damage to property. There’s also Commercial Property insurance which covers the businesses physical assets.  And when it comes to employees, it is crucial to carry Worker’s Compensation insurance which covers the medical and rehabilitation costs in case an employee sustains work-related injuries.

Transparency has a lot to do with the workplace culture. It can be a two-way street in that when you are transparent to your customers and employees, they will also be transparent with the business. Being transparent makes your startup trustworthy and reliable. It makes it easier to build stronger bonds with the target market. When customers feel more comfortable and satisfied with your business, they will play a huge role in increasing your revenues and eventually, in realizing your business goals.