Everyone Deserves a Piece of the Profit

The blueprint for a simple, powerful profit-sharing program.

If there’s one thing owners, employees and contractors agree on, it’s that it is always nice to have some skin in the game, especially when business is thriving. A successful profit-sharing program inspires and motivates your employees. It allows you, as the owner, to give back to your team. It even makes for a great story when an employee experiences a windfall.

But for a small business owner, setting up a simple and effective profit-sharing system is a daunting challenge. I know, because I spent the last year building mine.

In today’s article, I’ll show you how to go beyond the common (but misleading) examples of public and venture-backed companies and set up a simple, easy-to-manage, easy-to-understand profit-sharing system that will make you and your team members proud.

What the big companies do

Starbucks has granted stock to its employees since the early ’90s, making its Bean Stock program famous for its generosity and for the windfalls many early employees received when the company went public. Amazon granted its warehouse employees stock as part of their compensation until 2018, when it replaced the program with a cash raise.

Back in the 1950s, Sears was the gold-standard of profit-sharing — it invested 10 percent of its earnings in the employee retirement program, allowing longtime employees to retire as millionaires, adjusted to today’s dollars. By one calculation, “if Amazon’s 575,000 total employees owned the same proportion of their employer’s stock as the Sears workers did in the 1950s, they would each own shares worth $381,000.”

And, of course, stock options and equity are the main vehicle by which early-stage software developers and venture capitalists roll the dice in Silicon Valley.

What’s missing from this picture, however, is a clear and simple way for today’s small businesses to share their success with their team. A profit-sharing program is not only a complement to equal pay, diversity and inclusion efforts, it’s also a surefire way to build a strong, stable and dedicated team.