When you’re in business, there’s a good chance you can quickly explain what you do, including the products you offer and the services you provide.
But that’s not really the purpose of the business that you operate. The real purpose of any business comes down to why you do what you do, which speaks to the problem you’re trying to solve, the ethos behind your business, and the ideal clientele you’re hoping to attract.
When you know this ‘purpose’, a whole range of key business elements quickly fall into place, including your target market, your vision and mission, your marketing plan, your growth strategy and a whole lot more.
So how exactly do you define your business purpose and in what ways will it assist your business now and in the future?
It starts with a simple question
Defining your business purpose starts with a simple question: why? Why do you do what you do?
And the answer to this is very different to how you would respond if someone asked ‘what do you do?’
For example, a content creator writes copy, such as blogs, articles and press releases. That’s the ‘what’. But the ‘why’ behind that business could be described as the following: “To help other businesses find their voice and stand out in a busy online world”.
As another example, real estate agents sell houses. That’s their ‘what’. But the ‘why’ actually involves helping people transition from one life chapter to the next.
When you know that ‘why’ and understand your business purpose, positioning yourself in the marketplace, marketing to people, attracting the right staff and a whole host of other business elements become a whole lot easier.
Over the past decade, the purpose behind a business has become increasingly important.
It helps you:
- Appeal to your ideal tribe of business clients
- Quickly establish your position in the marketplace
- Define your point of difference
- Identify the problem your business is solving
- Establish your vision and mission
- And more
In fact, statistics consistently indicate that a business with a clearly defined purpose is more likely to resonate with customers and attract staff who share those values.
If you’re in any doubt about how important purpose is, here are some statistics to keep in mind:
- 64 per cent of global consumers find brands that actively communicate their purpose more attractive. (Accenture 2018)
- Purpose-led brands have seen their valuation surge by 175 per cent over the past 12 years. (Kantar 2018)
- LinkedIn members want jobs that offer a sense of purpose: 74 per cent of members place a high value on finding work that delivers on a sense of purpose. (Imperative & LinkedIn 2016)
So now, let’s take a deep dive into how knowing your purpose assists your business.
Your ideal client
When you know the purpose behind your business, it becomes easier to define your ideal client and differentiate yourself in the marketplace.
After all, purpose often speaks to the problem you’re trying to solve, which helps you quickly identify who is likely to be in need of your services and products.
In the process, it helps you differentiate from other players in the broader market and can help set the price point at which your business operates.
Let’s go back to the example of the content writing business whose purpose is “to help other businesses find their voice and stand out in a busy online world”.
This purpose begins to shape who that company is looking to attract – businesses. Now they can drill down into what businesses (Small business? Big business?) which helps them define their exact clientele and how they are different to other content writing agencies.
Your vision and mission
Knowing your business purpose also shapes your vision and mission, which are two of the key foundations of your business plan, marketing strategy and growth aspirations.
In fact your purpose underpins your vision and mission, which are the statements you publicly display indicating who you are, what you stand for and why you do what you do.
Marketing and messaging
In turn, this business purpose then forms the basis of an organisation’s marketing strategy.
It allows you to know who you’re speaking with, where they’re likely to ‘hang out’ and the messaging that’s likely to resonate with them.
Finally, your business purpose is one of the key reasons why staff will choose to work with you. As the above statistics indicate, employees now want more from their workplace than just a job.
They want to work with a business that aligns with their values and beliefs. That makes knowing your purpose and espousing it in your vision, mission and organisational behaviours imperative.
The problem your business solves
Every business solves a problem for someone and ultimately the purpose of your business speaks to this problem and how your organisation solves it.
It answers the questions:
- Why are you in business?
- Who do you serve?
- And what do you offer to assist?
The final word
Ideally, every business will define their purpose early in their journey. But as businesses grow and evolve, this purpose can change slightly over time.
That means you should regularly ask yourself why does my business do what it does? And if you’re having trouble defining that, I’m available to assist. You can reach out to me and book a discovery call to discuss your business purpose here.
Talk Strategy with Clive
With more than 30 years’ experience in mentoring small to medium-sized businesses around Australia. Clive works with company owners and their teams to grow their business and achieve goals through strategic coaching.