I’m sure you’ve been asked this question before. I’m hoping that your answer wasn’t “to make a profit.”
I can almost promise you that when you started your business, making a profit was more of a dream than a purpose. Let’s take a look at some options and see which one fits for you.
Why isn’t making a profit the purpose of my company?
This is a logical question. Making a profit isn’t the purpose because it’s a result. Making a profit is a requirement if you want to stay in business.
I want you to take a look at the word result. If you run a great company and do things correctly you’re going to end up with a profit at the end of the year. Tell me, does this sound like a purpose or a result.
In my world, profit is about the result of being in business and has nothing to do with a business purpose. At the same time if your business isn’t profitable on a regular basis, you won’t be in business for very long.
Where does having a great product fit in?
Having a great product is a wonderful thing. If you’ve built something that you believe everyone will want, you might have a cool business. You also might find that no one is interested in your new mousetrap.
Having truly great products and services is part and parcel in what it takes to have a great business. But, it’s not a purpose. Products your customers want to buy is a
requirement for being in business and it could be a reason your business exists. It’s not the purpose your business has.
Your business won’t prosper unless you have a service and product your customers want. It’s really that simple.
I’ve always wanted to work for myself.
I can certainly identify with that statement. I’ve come to the conclusion that I’m not employable by other people.
If you’ve always wanted to work for yourself that might be a reason that you’ve gone into business. It’s not the purpose of your business. No one really cares who you want to work for.
I bet if you own your own business you can’t imagine working for anyone else. It’s a great thing to work for yourself and it might be part of who you are. It’s just not a good purpose for why your business exists.
There has to be a better way for companies to run.
There are an awful lot of companies that are truly dysfunctional. I think that’s too bad. I also think that this might be a reason for you to want to start a business. If it’s your purpose for starting a business there’s a very good chance you’re not focusing on the right thing.
Your customers might like doing business with a triple bottom line company that’s socially responsible. It’s not the purpose for your business.
Having a well-run company will help with profits and it’ll certainly help with how your stakeholders feel about your company. It’s just not the purpose for your business.
I know, it has to have something to do with customers.
Now we’re on to something. According to Peter Drucker there is only one reason for a business to exist. And, what is that purpose you ask?
The purpose of your company is (let’s have a drum roll here) to create a customer. Without a customer your business won’t exist.
One of my favorite sayings about business is “nothing happens until a sale is made.” And, a customer is never created until a sale is made.
There are lots and lots of reasons people go into business. You have to make a profit to stay in business. You have to have happy employees to have great service. You even might want to make sure your company is socially responsible.
All of those things are nice and even good things to focus on. And, the only thing every business absolutely positively needs is customers. Without a customer you have no business.
Now that you’re at the end of this post what do you think? Is the holy grail of your business to create a customer? If not, why not?