How to Understand Your Business Purpose
Too often, entrepreneurs set out to start their business without knowing what exactly it’s about. And what ends up happening is that their whole business becomes consumed by and dependent on the brilliant idea that prompted the business. This means that instead of the initial idea being a product idea as part of the business, it becomes the business. Explained in the simplest way, it’s equivalent to a unique menu item becoming the whole focus of the restaurant, and the rest of the menu being either non-existent or just not measuring up to your unique item.
Why is this bad? Well, it’s not bad exactly. It’s just not a great long term strategy. What will your business become when the market catches up and your unique menu item is no longer unique? If your entire business has been focused on one product idea, you risk closing off the development routes for your business down the road.
It can be easy to go down the path of focusing solely on your single product idea, as that’s the idea in the initial stages. However, in the planning stage of your business, it’s important to consider what your business will be about, even without the product. What is the overall aim and core purpose of your business, and what is it trying to achieve?
Why is this important?
Understanding and setting the core purpose of your business is important for several reasons. In the book, Built to Last: Successful Habits of Visionary Companies, authors Jim Collins and Jerry Porras studied eighteen exceptional and long-lasting companies and examined what made them different from other companies. One of the components they found that helped these companies endure and thrive was a sense of a core purpose.
Having a core purpose is like grounding your business to a set of its most important goals and values, and understanding that you cannot stray from it. Without a clear purpose of your business, even you, as the founder, can lose track of what it’s trying to do.
What is a purpose?
In this article, we’re not talking about the mission statements and values of your business, although there are similar components. We’re strictly referring to what your business ultimately tries to achieve. And here, it’s important to distinguish purpose from business activity and products.
Say your business sells a mobile app that compares hotel prices in a given area. The app that helps people to conveniently look up prices of hotels is the product. The purpose of your business, however, is NOT selling the app. Your business adds value to those that it serves. This means that the purpose is bigger than the app and any other business activity you participate in. The purpose is why your business exists.
How do I know what the purpose of my business is?
Don’t be disappointed if you haven’t considered the purpose of your business yet, or if you can’t just think of it on the spot. Discovering the purpose is an important practice for businesses that a lot of entrepreneurs tend to forget. And the good news is that it’s nowhere near as difficult as finding a purpose for your own personal life. And don’t worry if you feel like you don’t have a noble goal you’re trying to accomplish with your business. Your business’s purpose is not the same as your personal goals. Even if your only reason for starting a business was to become rich and successful, your business has its own purpose that will ultimately help you achieve your personal goals. Follow the next steps and see if you can uncover the core purpose of your business.
What does your business do? What problems does it solve?
Businesses solve problems that are experienced by the general public or particular groups of people. A company selling sunglasses helps to solve a problem that most of us experience, which is finding it difficult to see in the sun. All businesses solve problems and aims to add value. What problems does your business solve? And whose problems does it solve?
What component of your business is timeless?
It’s a given that your business activities and products will always follow a trend. When mobile phones became an everyday product in our lives, companies around the world stepped up their game and made their products available via mobile apps or made their websites responsive to be viewed on smaller screens. Your business too will evolve with technology, and there is no question about that.
But what is it about your business that will stay relevant regardless of trends, time and technology? What problem will your business always solve, even if the products need to be upgraded to do the job?
How does your business add value to the world?
Even if you’re a sole trader or starting a small, seemingly insignificant business, your business would have worldly goals. How does your business contribute to changing the world? And how does it contribute to chanting lives?
What is the most important thing about your business’s existence?
Why is your business here? Yes, it solves problems and changes the world, but what is the reason that it exists? And why does its existence matter? And without your business, what would happen to the world or the people that you serve?
How does your business add value to your employees’ lives?
Aside from the money and security and any other benefits that can be earned, what can your employees get out of working in your business? What passion does it reach out to and what personal purpose can it resonate with? A purpose that’s clearly set out, communicated and followed in a business can make the employees feel like they’re part of something that is adding value to the world, and that they’re working towards a greater good.
The core purpose, although not required to be communicated to customers or anyone else, is a critical aspect of your business that will help you stick to its goals. Knowing why your business exists will help you understand how it needs to grow, what it should or should not do, and who it should serve.