Do you really need a business mission statement? Is it just some fancy words to put in that business plan that collections 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 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 not 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 …