Defining Your Purpose to be in Business
by Ron Kurtus (updated 19 January 2022)
Whether you are starting a new company or improving an existing one, you need to define your purpose or reason for running the business.
Typically, there are three reasons to start or operate a business. They are to make money, to gain satisfaction from working in a field of interest, and to benefit others. The order of the reasons depends on your personal goals and whether the business is a for-profit business or non-profit organization.
After you have clarified your purpose, you need to establish the means to achieve that purpose or your business concept.
Questions you may have include:
- What are the purposes in a for-profit business?
- What are the purposes in a non-profit business?
- What about a business concept?
This lesson will answer those questions.
Business for profit
If you have a business for profit, you can define your purpose to be in business by examining your reasons and their order of importance. They are usually to make money, to gain satisfaction, and to benefit society.
Making money is a primary motivation in starting and improving a business entity. Owners or stockholders want to earn profits.
Money is usually the first goal of an entrepreneur, followed by the other two purposes.
The reason to improve business operations is to increase profits.
The secondary motivation is to provide some sort of satisfaction or enjoyment for the owner. People usually start and run businesses in areas that they are interested in and enjoy.
When others involved in the business are also enamored with the products or line of work, the business usually prospers.
Workers at Harley-Davidson Motorcycle Co. love their Harley's. Likewise, workers at Apple Computers love Apple products.
The third reason to run a business is to be able to help others and to do good for society. It is true that leaders of many companies don't think about helping others, but the ones that are truly fulfilled and the companies that are truly successful realize that this is also important.
Some have another order
There are companies that are run with these three items in a different order. This is similar to people who have a hobby they enjoy and that is their primary motivation. Getting money for them is just something extra.
The motivations to start and operate a non-profit organization are the same as for a business, except that the emphasis is changed.
The primary purpose of a non-profit organization is to help those in need, to solve a social problem, and/or to benefit society.
On the other hand, the purpose of a non-profit organization or government agency is to provide a specific service that will fulfill a need and benefit its constituents.
A secondary motivation for a non-profit is to gain funding in order to remain a viable entity.
In order to fulfill the primary purpose of helping others, your non-profit organization is still a business that needs money to continue functioning. Such organizations primarily depend on donations, but often they are in exchange for a service (like a church service) or some product (some send stamps in the mail).
People who get involved in charitable or non-profit organizations usually do so because they are interested and concerned about the charity, and they enjoy doing the work they do.
Means to achieve purpose
The means to achieve your purpose for starting or running a business boils down to getting a great idea of a product or service. This is often called the business concept.
The company needs a means to achieve the purpose of making money. The owners must have an idea of a product or service to provide to a specific market or group of people (customers).
A non-profit organization or government agency needs a means to solve problems of its constituents. Their idea is to provide a specific service that will fulfill a need and benefit its constituents.
It is important to define your purpose or reason for running the business. Reasons to start or operate a business are to make money, to gain satisfaction, and to help others. Their order depends on your personal goals and whether the business is a for-profit business or non-profit organization.
After you have clarified your purpose, you need to have a great idea or business concept that provides the means to achieve your goals.
Know what you want and how to get it
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