There’s a whole mess of reasons why all businesses should distribute profits to their employees:
-Redistributing money = redistributing power
-You didn’t build your business to only benefit yourself
-Your employees should benefit from the value they create
Those are just three of many, but you get the idea! I’m not talking about the folks who believe it’s their divine right as Capitalists to amass capital for themselves. For anyone that takes a people-centered approach to business, how can the resources my business creates benefit the people within the business and my greater community, should be a guiding question.
So here’s the counter-intuitive reason to build profit distribution into the foundation of your business:
It’ll make you accountable to ensure your business actually works.
When I ask folks– the people in my community who align with all the values that would point one in the direction of not hoarding profit for oneself– why they are not distributing the profit from their businesses, either to employees or as redistributions to the common good…. 100% of the time they say they don’t because they don’t have it. Because they’re worried that they don’t have enough.
What if we started with the principle that a business should only exist if it can generate enough resources for everyone involved?
You might be like, yo Kate, no one opens their business to muddle along with tight or non-existent cash flow. And you’d be right! However, a lot of purpose driven folks don’t prioritize profitability– it’s something that might happen in the future, or to someone else– because they’re prioritizing purpose.
Which is ultimately an individual concern.
But what if you had to tell your employees that bottom line number every year? What if your community knew how much you were able to redistribute annually?
You’d probably start organizing your business priorities a bit differently.