Key 1: Every business should have a mission
Creating and Planning a business is not easy, but the task can be approached in a systematic way that will maximize the probability of success. First, it should be recognized that every business has to have a reason for its existence. Second, ever entrepreneur should know why his or her new business should come into being. Entrepreneurs start new businesses for lots of reasons, some good and some not so good. Many entrepreneurs simply want freedom and independence from the work place. Unfortunately, the market place may be more demanding than the most meticulous boss, and the entrepreneur who starts a business just to get away from the constraints of a job may be sorely disappointed.
It is not unusual for entrepreneurs to want a creative opportunity, and they embark on a new business as a means of self-expression. This motivation for owning and operating an enterprise is certainly acceptable, but in the final analysis few business are deemed successful unless they make money, and for good reason: Few entities can exist for long if they do not become profitable at some point.
The simple desire to have a business is not sufficient to justify the existence of an enterprise. Even the desire to make a profit is not sufficient for a business to succeed. There also has to be an economic explanation for a firm to thrive. A business mist produce goods and services that people will buy in sufficient quantities to justify producing those goods and services. The entrepreneur who says, “I want to be in the catering business in San Diego because I am a good cook and I like the climate in San Diego,” may not be in business very long if nobody buys his or her food. Unfortunately, there are a lot for reasons people don’t buy things. The price has to be right. Quality is a consideration. What else is on the market is a factor. You may be the best cook in San Diego, but if you can’t sell your food at a reasonable price, you will probably not succeed. Also, if you can’t deliver on time and can’t provide a tasteful setting for your meals, your business will not endure.
The successful business comes into being and survives because a smart entrepreneur has identified a real demand for specific goods and/or services. Furthermore, the demand must be satisfied by being able to sell those goods and/or services at a price people can afford. Finally, the demand must be met with a cost structure that will yield a sufficient profit to justify the investment in time, energy and money that must be made by the entrepreneur and his backers (financial and otherwise).
Given the caveats outlined above, it should be obvious that the first thing an entrepreneur should do when he is contemplating establishing a new business (or continuing an existing one) is to determine why that business should exist. It is smart to spell out the reasons in a short narrative statement that reflects the motivations of both the entrepreneur and the market served. This narrative statement is called an enterprise mission. A possible mission statement might be:”The ABC Company wisher to provide X (for the product and/or service area where the business will be, or currently is, located) with the highest quality Y (the product and/or service being provided), while permitting the owner(s) of the business to achieve personal and financial independence.”