operators: any ideas on open book management?

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May 10, 2024

by a searcher from University of Pennsylvania - The Wharton School in New York, NY, USA

I expect to close on a skilled trades (electrical-related) business in the next couple of weeks and would love to connect with folks who have implemented any form of "open book management" - for those unfamiliar with the term, here's an HBR article:

https://hbr.org/1997/03/opening-the-books

I believe this dovetails nicely with Jim Sharpe's recommended approach to employee profit-sharing.

https://jimsteinsharpe.com/sharing-profits-not-equity/

I plan to focus first on maintaining the healthy foundation of "business as usual" in the first few months, but when I begin to implement changes, I'd love to incorporate some experiences from other operators.

Today, the employees have zero knowledge regarding the overall financial performance of the business.

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Reply by a searcher
from University of Pennsylvania in New York, NY, USA
also shout out to ^redacted‌ - this is great

https://www.searchfunder.com/post/exploring-open-book-management-in-a-search-fund-acquired-small-business
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Reply by a searcher
from University of Florida in Miami, FL, USA
In the startups I've been part of, we've taken it a step further than that and educated staff on financial statements and P&L. I believe people get a different sense of ownership and responsibility when they know what's going on with the finances.
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