Purpose, vision and strategy are vital to the success of any business. It may sound obvious, but you cannot run a successful operation unless you have a well-defined idea of why you are doing it (purpose) where you want to go with it (vision), and how to get there (strategy).
Your business purpose and vision need to be defined early on, to enable you to set your strategy for the future. Your strategy should ideally be firm up to two years ahead, and defined but more flexible up to five years ahead.
Ask yourself a few basic questions:
What should my business actually do? This one is easy to ask and hard to answer. Ideally, you should be able to define your business vision and purpose in a fairly simple mission statement. If you can’t do this, perhaps you need to re-think your core purpose.
Is the business intended as an income supplement or an income replacement? Stay small, or expand and take on employees? An answer to this one will help you in development of your strategic business plan, and define the potential size of your business.
Is the business an investment that you will build up from scratch and then sell on? An investment requires a different approach from an ongoing business. Your business plan may need a rapid growth approach plus a clear exit strategy.
Will your business be product-led or market-driven?
Many small businesses start off with one or more people with a set of skills and capabilities. They start to make a series of products, or offer some services. The next step is usually to try to find someone to buy those products and services.
This product-led approach can be profitable, and may suit some artisan-type producers. However, this approach will not maximise the profit potential of the available market. A business set up on this basis may be a good income supplement, but it is unlikely to make that big profit breakthrough for the owner.
A better approach is to be market-driven. Based on your vision and purpose, you should be able to identify your total potential market. Once you know what your market is, you can research who your customers will be, and what they actually want or need. Having established customer needs, you can then format your products or services to meet those needs.
If you are looking for an investment or an income replacement business, there is much greater scope for profitability with a market-driven business than a product-led business.
Up-front time and effort
Invest time and effort in the early stages of your business. Consider and define the purpose, vision and strategy for your business, and you will reap the rewards in the long-run.
For more information on purpose, vision and strategy for your business, email us at email@example.com or complete the form below, and we will try to answer your questions.