Many business owners know what a mission statement is, and understand how important it is to have one. Indeed, many of us will be familiar with such statements from major organisations. We all understand the benefits of such a statement and how its existence can be used to keep a company aligned to its core values and focus. Yet many smaller businesses do not have one. Are they really necessary for your company, you may wonder? The short answer is yes, but let me first start with the following:
What is a Mission Statement?
A mission or belief statement for a business is a short paragraph describing what the business is doing and why it’s in existence in the first place. It is meant to serve as a tool, communicating to the reader the essence of what the business is all about.
A Guide in Growth
A mission statement can serve as a guiding post when your business experiences growth. As your business expands, you are normally presented with options on how it can grow. Your mission statement can act as a guide, helping you to make the best choice from the options available, and it serves as a powerful reminder of why your business is there in the first place.
Serves as a Guide to Increasing Efficiency
All businesses go through cycles of good times and lean times. Having a belief statement and referring to it regularly will guide you on your decisions. This will help you become more cost-effective, without compromising your key beliefs or your customer service.
In the mid-80s and 90s many of the major listed organisations in the US were pressurised to grow. They started acquiring businesses that were not related to their core expertise and that did not adhere to their mission statements. Over a period of time, they found that these acquisitions did not provide the benefit that they had hoped for and as a result, they had to sell (or divest) the business at a massive loss to the company.
It Can be Cost-Effective to Your Business
The mission statement is used to communicate the core values of your business to other people involved in its operations. On certain occasions, business owners themselves can be distracted by the market. I have always found it helpful to bring them back to the place of origin (the mission statement) and identify once again why the business is there in the first place. Having such a statement helps keep the business focused on its core competencies and can potentially highlight whether a potential investment is aligned to its values.
So, when is the best time to develop a mission statement for the business? In short, there is no proven ‘best time’ to have one. Some people believe that a business should have one before it even starts operating. Others believe you should wait until you understand the reality of running your business a little better. My personal opinion? For companies who realise the benefit of having one, the best time to create a statement is as soon as you can. The benefits of having one far outweighs the effort taken to develop it.