I want to be honest with you. I’ve never owned a small business. I’ve merely been a dedicated employee in a small business for a year and a half. I loved that business and I loved the culture we cultivated there.

We discussed every level of the business, functioned transparently with our community, and we trusted each other completely. We were honest with our customers, and they appreciated our honesty. We built a loyal brand and managed to expand the business because of it.

Honesty has a powerful way of drawing people in and creating trust. It cultivates a positive and communicative environment, and it is essential for creating a successful small business.

I want to share with you some of the main reasons honesty and transparency need to be a part of your business strategy. I’ve seen the effect it has first-hand, and studies have proven just how impactful it can be to building a strong and loyal customer and employee base.

Internal honesty and employee engagement

Honesty and transparency can do wonders when implemented into the company culture of a business. Not only does it create a solid flow of communication through every level of the business, but it also helps employees feel more connected with the business’ message.

Those on the ground floor, doing the arduous work of the entry-level staff, will appreciate seeing the business transparently. When they can see how their personal work affects the company on a wider scale they can appreciate their time and effort more, and continue to create quality work. It keeps them motivated and dedicated to the company; reducing turnover and retaining talented and dedicated employees. Creating a transparent business model shows that you trust your employees, and in a small business that can mean the world to your workers.

When it comes to management, some of the most basic keys to keeping employees engaged and motivated lies in respectful, honest, and supportive treatment. Especially with the influx of millennials into the workforce - who highly value honesty and support from their peers - being a “mentor” to employees is more important than being a “boss” in today’s office culture.

Not only that, but honesty breeds honesty. As Katie Burke, writer with Glassdoor and employee with the recently-made-public company Hubspot, noted in an article: “when you create a culture devoid of transparency, employees often conceal failure, and doing so can be lethal to your company. Not only does this practice make it more likely that employees are hiding behavior that is less than admirable, it also makes failure a four letter word, and that’s the fastest way for your company to regress to the mean. Don’t hoard information; share it widely–doing so will give you better ideas, better insights, and ultimately better behavior from everyone in your organization.”

External honesty and marketing potential

However, honest company culture doesn’t just affect your internal structure. When honesty becomes a way of doing business, it will bleed into the public perception of the company.

In our modern age of technology and inundated ad-marketing, this is a huge advantage. Marketing is no longer a journey of getting your name out there in the world, but a journey to share your story and capture the attention of your audience. One of the best ways to do this is through honest and authentic marketing. This is especially beneficial for small businesses that are just starting to gain traction and recognition.

With the recent death of traditional marketing tactics, there has been marketing shift that favors shareable and meaningful content. You want to grab their attention and build a connection.

According to Maryville University’s MBA program, building a strong relationship with clientele is one of the most powerful forms of marketing emerging today: “Use of digital media platforms allows for a two way conversation between companies and the consumers purchasing their brands. By engaging people who are talking about the brand, marketers can create a sense of community and inclusion, giving consumers a feeling of ownership in the brand.”

Not only does a customer feel more connected with a brand, but responding honestly in the case of negative feedback can turn dissatisfied customers into loyal brand activists. As Maryville University also notes: “Digital platforms also allow consumers to express dissatisfaction with a brand, which can be seen as a downside, but negative feedback allows a company the opportunity to respond publicly, demonstrating concern and taking action.”

Making honesty the best policy in terms of a PR response is effective in both recovering from any public negativity and in cultivating a larger and more loyal fanbase. It strengthens your public image and solidifies your company’s reputation for honest business practices.

See also:

6 questions to ask yourself before launching an eCommerce venture

Coco Moon: where eCommerce meets a mother's love

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