Have you ever asked yourself:
Why does your business exist, and why would anybody care?
What does it take to make a success of your small business… how can you avoid adding to those frightening statistics about failure rates of small business?
In this series of articles and associated webinars and workshops you will learn the basic concepts and get the knowledge you need to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’.
The format of each episode in the “First Steps” series is to explain the basics of the topic and then in line with the principles of New Perspectives business development programs, to suggest some “First Steps” you can take straight away to put the knowledge into action.
The Purpose Question
In the fourth of these articles we’ll look at Purpose and ask: What is the Purpose of your Business?
Contrary to what most people think, the Purpose of your business is not to make lots of money.
As John Mackey, author of the book “Conscious Capitalism” (More info here) and founder of “Wholefoods Markets” says: “Thinking that the purpose of business is to make money, is like thinking that human beings are on this earth to eat. Eating allows us to fulfil our purpose in life and it is the same for business. Profit allows Business to make good on its Greater Purpose”
Shame really, because life was so much easier when us business owners could just focus on “maximising shareholder value”, but in the 21st century we have to rethink the Purpose of business.
Allow me to illustrate what I mean with one of my Business Bedtime Stories.
A Business Bedtime Story
(The ‘Business Bedtime Stories’ are real world case histories that illustrate the different aspects of business that the various New Perspectives Business Coaching programs deal with. See it in pictures here)
Once upon a time… a long long time ago in a country not unlike Australia… John owned a cornershop in the inner city of Sydney…
Running a cornershop in the inner city is hard, there are corner shops everywhere and then there are the 7-Elevens and city express stores and even Woolworths and Coles get in on the act from time to time.
The hours are insane, profitability is minimal and the Competition is just crazy.
John often caught himself thinking: “How can I escape this trap of deadly competition with my neighbours, so we can all have a better life?”
Working with me as his business coach, John came to realise that the only way to escape the competition trap was to make the competition irrelevant.
The way to make the competition irrelevant is by making yourself truly unique, by creating something that is completely different from everything else out there.
And so he did, John decided to become “The Best Small Supermarket in Sydney”.
The day he made this decision, everything changed. Sydney has great corner-stores, handy convenience stores, big Coles and Woolworths, sexy delis and grocers, but there is only one “Best Small Supermarket in Sydney”.
2 Years later, John opened a second store, a year after that his third and a year later again his fourth. John’s customers love him and love his stores, profits are many times what they were 3 years ago and John is creating something really special in the Inner City of Sydney.
And John and all his satisfied customers lived happily ever after…
Lessons from John:
So let’s have a look at what we can learn from John:
First: Competing on price is not a strategy for sustainable success of your business.
Second: In order to avoid having to compete on price, you need to be clear about the Purpose of your business.
Third: The Purpose of your business has to relate to your customer’s needs.
The Problem with Profit
Focusing on profit as the Purpose of your business, has one major flaw: Your customers have no interest in supporting you to make money. They are quite happy for you to make a profit, but only after you have met their needs first.
There is a beautiful video on Youtube by Simon Sinek (watch the video) another bestselling business author and management guru. In the video Simon states that “People don’t buy What you do, they buy Why you do it”.
In other words, your customers want you to explain to them why your business exists, what it is on this earth for and why they should care.
In working with my clients to find the deeper Purpose of their business, I always ask them those questions first and invariably I get the following three answers:
1. We do great work
2. At a great price
3. And we give great customer service
Undoubtedly true, but first of all your customers expect those three qualities as a bare minimum, a starting point and secondly, your competition makes exactly the same three claims. Have you ever met a business owner who proudly claims to produce and average product at an average price with average customer service?
This is why you must find the deeper Purpose of your business.
Here are some example of deeper business Purposes:
1. An Architect’s business: Architecture that Inspires
2. A furniture factory: The Most Beautiful Tables in the World
3. An Electrical contracting business: You’re in Safe Hands
If you were in the market for a table, wouldn’t you like to check out the furniture factory at number 2? Of course you would… I know I did.
You might be interested to know that all three of these businesses have been wildly successful and bucked their respective industry trends for years now.
How do you find it?
The process of finding and developing the deeper Purpose of your own business starts with asking yourself the following 7 questions:
1) What are my 5 most important personal values, as they relate to business?
2) What core beliefs do I hold about my business and industry?
3) What do I get really excited about in business; what do I get out of bed for; what am I passionate about?
4) What do I want my business to be the best in the world at?
5) Who are my ideal customers?
6) What do my ideal customers need or want that they are not getting at present?
7) How can I address all 6 questions above and develop a long term sustainable, profitable business model around that?
I encourage you to involve others in brainstorming these questions with you. Working your way through them will put your business on an entirely different footing, I guarantee it.
This is the topic we will be talking about at the November Masterminds ‘live’ workshop as well as the Masterminds online webinar, both on 14 November. If you would like to attend either the webinar or the workshop, register here
Purpose and the 7 Big Questions of Small Business
Business owners frequently ask 7 Big Questions about how to Build a Beautiful Business and Life.
The first of these Big Questions is: How do I grow my business?
To answer that question I have identified the 11 most important strategies to create Business Growth.
The first of those strategies is Grow your business with Purpose. This is one of many more articles on this site that explain how Purpose and Growth hang together, in some depth.
Your First Steps:
As mentioned at the start of this article, here are some resources and actions you can take right away, that will get you started on implementing the principles I discussed.
Go to the resources page to find the following resources that will help you clarify your Purpose and Passion in your business:
1) The Simon Sinek Video about the “Why” of your business
2) An article from business guru Jim Collins about the importance of “Vision”
3) A worksheet and tool I have created to help you step through the 7 questions above.