How To Do Profit-sharing
Business leaders and owners ask me all the time, “Sooooo, should I implement profit-sharing? And if so, how?” It’s a fantastic question, but there are a few questions I always have before I answer.
First of those is, do you actually have profit? You would be amazed at how many owners or leaders have a huge heart, and want to share with their teams, but it would be at a loss to themselves. In other words, they might not have much of a profit, but they want to give their team a spiff anyway that would come out of their salary.
This is not a good plan. How can you keep your doors open if you can’t keep food on your own table. Trust me, if your team is earning a good wage, they can do without profit-sharing while you and the team work to get profits up. Simply put, you can’t give from that which you don’t have.
The second question is, why do you want to give profit-sharing? Is it because your team is doing such an amazing job that you want to share? We always go with the old saying, “Dance with the one who brung ya!” Or is it fear based? Like, “If I don’t give, I’ll lose my team.” If it’s the first, great job leader. You’re headed in the right direction. If it’s the latter, and that’s what it takes to keep your team, you’re never going to be able to do enough to keep them happy.
If they are there for your profit-sharing, then they are just there to work a j.o.b. What you want are people who are on board because they realize that what your company has to offer is bigger than them. You’re looking for someone whose eyes light up anytime they are talking about the position you’re putting them in. These are the people you share with!
So what does sharing look like? It’s a lot of info for one post. See tomorrow’s post where I will break it down for you.
Question: What issues do you have with profit-sharing? What questions do you have?