Why My Whole Team Can See What the Business Makes
Most shop owners keep their numbers to themselves. The thinking is that if the team ever found out what the owner takes home, morale would fall apart and everybody would show up asking for a raise the next morning.
I understand that instinct.
Then somebody told me a statistic that changed how I look at it, and I have never forgotten it.
If you do not tell your employees how much money you make, they will assume you make about five times more than you actually do. Their imagination fills in the number, and the number their imagination produces is always worse than the truth. You might as well tell them, because in their mind you are already making millions.
So that’s how we run our stores.
What our team can actually see
We do not keep this to a quarterly meeting or a slide at the end of the year. The numbers are in front of the team continuously, at three levels of detail:
A live dashboard showing revenue across all of our stores. Today is the last day of the month and everybody is glued to it. A few stores are breaking records and everyone can watch it happen in real time.
Gross profit alongside that revenue. Revenue on its own does not tell you much. Gross profit starts to move you toward the number that actually matters at the end of the day.
The P&L itself. We used to review the P&L with managers only. Now we open the review to the whole team, and anybody who wants to come and look at it can come and look at it. We walk through how it works line by line and teach people how to read it.
Why we teach them to read it
Transparency by itself is a gesture. The reason we teach the P&L is that it changes how people behave when something goes wrong on the floor.
Say we damage a customer's car, or a job has to be done a second time. I am buying the parts again and paying a technician again. Call it $1,000 out the door. If the team only understands revenue, the loss looks like a $1,000 problem that gets solved by selling a $1,000 job.
That is not how the math works. To net that $1,000 back, we need to sell somewhere in the range of $5,000 to $6,000 in additional repairs. The technician redoing that job is also tied up on work we already got paid for, so he is not starting anything new while he does it. One mistake takes two bites out of the same day.
The same gap shows up in what people think an employee costs. If we pay somebody $1,000, that person costs the business closer to $1,200 or $1,300 once you add payroll taxes, health insurance, and uniforms. Assume at least 20 percent above the paycheck on every single person on the payroll, before you have accounted for a dollar of general overhead.
When a technician has sat in a P&L review and watched those lines add up, the conversation about a damaged bumper is completely different. You are no longer the owner who is annoyed about a scratch. You are both looking at the same page.
What this actually costs you
I will be honest that opening the books means giving up the version of yourself that the team invents when they have nothing to go on. Some owners like being seen as the guy with the private jet money.
You definitely lose that.
What you get in exchange is a team that understands why we charge what we charge, why we care about a redo, and why a big revenue month is not automatically a good month. That trade has been worth it in every store we have done it in.
What to take from this
Your team is already forming an opinion about your numbers. The only question is whether that opinion is built on the real P&L or on whatever they assume. Show them the dashboard, show them gross profit, and then teach them how the P&L works so the numbers mean something when they see them.