TEACH EMPLOYEES ABOUT BUSINESS FINANCIALS
Build Personal Responsibility
Teaching employees about business financials can build personal responsibility and improved teamwork.
Every business owner and CEO wants employees to take more initiative and work for the well-being and profitability of the company. When employees understand the costs involved in running a business they become much more aware and conscious of time and material.
More advanced or autonomous teams engage in continuous improvement and problem-solving. By teaching employees the basics of business financials, they are more apt to consider expenses when working on solving problems pertaining to business operations.
Profit and Loss Statement
In the past when I’ve conducted team training sessions for some clients, I’ve incorporated some basic training on business financials such as understanding a profit and loss statement. I conducted exercises in groups to help the participants understand a P&L report. Using a home budget as an example is a good way to explain a profit and loss statement.
Surprisingly I found that many employees didn’t know what a profit and loss statement was and didn’t realize the expenses involved in running a business. I explained how after expenses profits can be very slim.
Often employees perceive the business is making a ton of money because they see the amount of goods being sold or services delivered. By walking them through a profit and loss statement and showing them how difficult it could be to make a profit, they start to change their perspective.
This change in perspective is a great foundation to have people be more conscious of how they spend time and materials. Every employee is a stakeholder in the company and if they enjoy working there, they want the business to succeed.
Training Session
You can hold a simple training session in which you explain what a profit and loss statement is and the expenses related to running a business. You can do this internally or bring in an outside consultant or facilitator. Sometimes bringing someone in from outside makes it more objective and gets a better buy in from the participants.
Take Action
If this idea makes sense to you take action and teach it to one group or team of employees. This is a good way to test if it will make a difference in terms of their understanding and perspective about company financials and protecting the profits of the company. If you see positive results from this you can then roll it out to other groups and teams of employees.