Do you really need a business mission statement? Is it just some fancy words to put in that business plan that collects dust on your shelf, or is there really more to it?
One of the key attributes of successful businesses is that they clearly know what they do. Defining the goal or the “mission” of your business can be the key to your success.
A good mission statement does three things:
” States what business you are in. ” Defines your target market. ” Provides inspiration for your business.
One of the best examples of a mission statement comes from Levi Strauss & Co. http://www.levistrauss.com/Company/ValuesAndVision.aspx
“We will market and distribute the most appealing and widely worn apparel brands. Our products define quality, style and function. We will clothe the world.”
Clothing the world is a pretty lofty goal, but Levi Strauss has the ability to do this for one reason— Their founder, Levi Strauss, started the business with a mission and focus.
Levi started his wholesale dry goods business in San Francisco February, 1853. Rather than hoping to make his fortune in the Gold Rush, he created a fortune by wholesaling clothing and fabric to the small stores supplying the thousands of miners and later, families of the West.
In 1872, he was contacted by Jacob Davis, a tailor who had developed a method to rivet the stress points of the pants he made from fabric he bought from-you guessed it—Levi Strauss. Jacob did not have the funds to patent the process, so he teamed up with Levi Strauss to patent the original blue jean in 1873. The rest is history.
Now, if Levi Strauss was your typical small business, he would have probably have spun off in ten different directions in their early years, but the company remained focused on supplying quality clothing and fabrics to the working men and women of the West, and later the world. Rather than focusing on their core market, they would have fallen into the AFAB method…Anything for a Buck.
Most small businesses suffer from this lack of focus.
When we work with struggling business owners, the first thing we ask them is “What is your bread and butter?” What one product or service provides you with the majority of your business profit?
Unfortunately, most business owners can’t answer that question. They did not define their core product or service and target market when they started, and end up doing a little bit of everything, and nothing well.
Or, they focus most of their time on a product or service line that they like, without knowing whether it actually is their most profitable.
Fortunately, there is an easy fix for this problem.
You have to determine your gross profit margin from each of your product lines or services. Get together with your accountant, and figure out what you need to do to separate your revenue and expenses by the major product lines of your business. Then, you can find out your gross profit margin, or the percentage of gross profit you receive from each activity.
The product or service with the highest gross profit margin is your core business activity. It is the bread and butter of your business, and the key to your company profits.
Now, you must focus as much of your company resources as possible on this core activity. Market it, systemize it, and turn your business into a machine for duplicating this product or service over and over again.
Well, rather than running around like a chicken with your head cut off, putting out fires all over your business, you suddenly have the focus to know where to spend your time and energy. You know your core, and you can work to make a good thing even better.
This focus will transform your business and your life.
Remember the term “Jack of All Trades, but Master of None”? You cannot become really good at something without focus, and focusing on your most profitable core product or service will make your business even more efficient.
Does this mean that you should never expand beyond your core? Of course not, but you must make sure you are really good at your core product or service before you venture into different directions. Creating a strong bread and butter business will give you the base necessary to expand.
Your core product or service is the foundation for your business. Build it well.