According to the Small Business Association (SBA), roughly 50% of new businesses fail within the first five years of operation. One of the major reasons for this is that many entrepreneurs suffer from a lack of clarity when it comes to the purpose their business will serve. A solid and realistic business plan is the cornerstone of a successful business, and the tell-tale sign of an effective business plan is a clear and memorable mission statement.
What is a Mission Statement?
A mission statement is a short phrase that defines the purpose of a company, expressing its immediate goals and objectives. It is generally brief, memorable, and indicates the specific values of your business.
Businesses often fail because the owner doesn’t really know what they want to accomplish outside of making money. While a vision statement refers to long-term goals, a mission statement focuses more on the daily operations of a business.
Both are important for a growing business, and both feed into one another as well. A lack of vision can make it difficult to see what your short-term decisions are adding up to, but an unclear mission is like planning a trip without any idea of the route to your destination. As author and business owner Dave Ramsey put it,
“Without a mission statement, you may get to the top of the ladder and then realize it was leaning against the wrong building.”
For an example, let’s look at the mission statement for the business magazine Forbes:
- “To deliver information on the people, ideas, and technologies changing the world to our community of affluent business decision makers.”
There aren’t many hard rules for constructing a strong mission statement, but the key is giving a clear picture of your businesses’ identity, and in that regard, Forbes’ mission statement is very successful. In just twenty words you know exactly what kind of content Forbes provides, who their target audience is, and what purpose their magazine serves. It is brief, captivating, and clear.
However, not every mission statement effectively conveys a business’ goals and objectives. Try to pinpoint which business (or even which industry) this is based on the following mission statement:
- “To create a shopping experience that pleases our customers; a workplace that creates opportunities and a great working environment for our associates; and a business that achieves financial success.”
While this sounds nice in a general sense, the goals mentioned are so broad that it fails to give any clear idea of what their business does or aims to accomplish. If you didn’t know, the above mission statement belonged to Albertsons’ (a grocery store chain), it’s unlikely you would be able to figure that out from that mission statement. It lacks much of an identity, which is one of the worst qualities a mission statement can have. The sense of identity created by a strong mission statement is one of the most important benefits it provides for a business.
When your goals are broadly defined and profit-based, it can be difficult to measure just how well your business is doing. But a mission statement based on one’s values gives you something to compare yourself to, giving a sense of direction to business owners and employees. It’s also an excellent marketing tool, as a strong mission statement can be integrated into your company’s brand, selling the business to customers and investors who share the same values.
So if you’ve been questioning how successful your business has been, ask yourself if you have a clear mission statement, and decide whether or not it serves your vision. If not, think back to why you started your business in the first place. There is always a spark that started you down this path. Identify that, and you’ll find your vision and your mission.