Purpose is such an important word in business because it drives your strategy, marketing, sales, pricing and your employee engagement programme.
The first part of purpose is being selfish and thinking about why are you in business? Do you want a business that makes you £50,000 a year without working everyday or are you happy to work long hours and earn £75,000 a year? Or, is the purpose of your business to enable you to enjoy what you do more than working for someone else?
Having monetary targets helps you make decisions and you will know when you are finished. But, because things are always changing it is best to check carefully and make sure your financial goals accurately reflect what you really want. Perhaps you don't need as much as you think or more likely maybe you need more than you think you do.
Complete a personal expenditure statement for your life now, think about if you are happy with this and how this will change over the years. Consider the effect of one-off financial events like paying for a Wedding, helping a child on the property ladder or incomings like you taking a tax-free lump sum from your pension fund or downsizing your house. This should tell you what your business needs to return you every year.
Once you know the specific purpose of your business from your perspective you can start to decide what services and products you can offer to return you what you want. For example, if you would like to make £50,000 without working IN the business this could be achieved by building a fee block of bookkeeping work and getting others to do the work for you, or maybe a low cost accounting service for micro and small businesses. I mention these two strategies because Crunchers and MORE have been designed to help bookkeepers and accountants achieve this outcome.
It is important you know why you are IN business so you can make sure you get OUT what you want. The key is investing a little time working ON your business strategy. Create a financial model of your business and work through the resourcing requirements.
When you do this you will know what services and products you will offer, how many clients you will need, what the average fee will be, what profile will the right client be, how many employees you will need and how big your office needs to be. You will also be able to start to consider what will the business be worth and how much you are prepared to invest in time, money and energy to build the business.
The second part of purpose is thinking in terms of what purpose your business has for your clients. A business exists to create an outcome outside itself. What specifically will your business do for your clients? When you know why your business exists from your client’s perspective it is a lot easier to shape your sales and marketing strategy.
The third and final element of purpose is for your employees (including you). When your business has a purpose it can effectively engage its employees with a compelling vision.