Today, I read this article on business transparency. The guys at Empire Flippers make a living, connecting buyers and sellers of web businesses and I love seeing what type of businesses end up on the site. I enjoy looking at some of the profits the businesses generate and how long they’ve been in business for. It’s also interesting to see how businesses are affected by cyclicality (e.g. a company selling kayaks is probably busier in the summer months). Moreover, it’s kind of refreshing seeing the many different ways that business operate and make money. There is no one method to running a successful online business. Anyhow, one of the other cool things about the Empire Flippers website, is that they occasionally have some great and insightful . This time they talked about business transparency.
Empire Flippers have adopted a policy that aims to be open about their business, talking about their shortcomings and successes, problems they’ve had with their customers and what they’re doing to address them. It definitely makes for an interesting read when talk about how they became victims of Russian scammers. Or how they try to determine what an online business is worth.
However, the long story short is that they are big proponents of being open about what they do and how they do it. In an era of encroachment on individuals’ privacy and much more scrutiny on what companies are doing, these guys are taking a stand and are becoming more open about their business.
Business Transparency: the benefits
Empire Flippers clearly highlight the main benefit that comes with practising business transparency: Trust.
They have established a high level of trust between themselves and their customers. But in being open they are also gaining trust from other stakeholders such as suppliers and affiliates. As the people behind the company step into the limelight and speak openly about how they operate their business, what may have previously amounted to a faceless business now receives a human visage.
A great example of how Empire Flippers managed to gain trust is when the Founders spoke about how they were scammed out of $25,000. Not only did they discuss what they did to recover some of the money, but they also went step by step through they’re thought processes at the time. By opening up about this, they showed their human side and also demonstrated how they improved their processes after the event, hopefully stopping any similar scams of this type going forward.
Business Transparency: the downsides
I can’t think of many downsides to being this open about your business apart from there being extra work on a regular basis. I guess the main point is that it doesn’t work for every business sector. There are businesses that are so complex that transparency might only end up confusing things and could deter future customers. Other businesses require a certain amount of confidentiality. This may also apply for listed businesses which have to adhere to specific rules and regulations as to how they publish sensitive information. Although in the latter case the detailed transparency could be publicised well after the announcement has been made to investors. There are always instances where client confidentiality has to be guarded, and this may tricky if you are practising business transparency.
In a way, operating as a transparent business is very clever and honest marketing. You’re opening up to your customers about your values and goals. And most importantly you are honest about it. And honesty breeds trust.