Is Your Best Skill Aligned with Your Business Model?

When starting a business, most entrepreneurs excel at the specific technical skill set they need in order to deliver their services and products to clients.  For example, if you own a bike shop, you are pretty great at all things related to bikes. If you own a law firm, you are probably good at practicing law. This skill is your core skill.

As your business grows, you need different skills beyond your core skill in order to thrive. That skill depends on the type of business model you want to succeed at. Here are some examples of business models and the key skill you need to be outrageously successful.

People-Based Business Model = Leadership

If your business is one of the 25 percent of small businesses that have employees and you have a team that serves customers, then you most likely have a people-based business model. The revenue you earn is dependent on how your people perform and serve clients.

Some examples would be a mid-sized law firm, a nail salon, a marketing agency, and a mid-sized plumbing company. Each one has a team of people that generate revenue.

These people need to be hired, trained, and motivated, and that is where the skill comes in.  If you have a business model like this, you need to excel at leadership, which includes managing people as well as hiring and firing. You need to be great at developing a productive, happy team in order to reach your highest pinnacle of success. Your core skill is still needed, but without leadership skills, you won’t grow as much as you could.

Acquisition-Based Business Model = Negotiation

Some companies grow through acquisition of other companies. In this case, your top skill should be negotiation; you will need to make excellent deals to keep your business growing.

Project-Based Business Model = Project Management

If your job revolves around delivering large projects, such as construction, possibly IT companies, and some real estate, then your business model might be project-based. While knowing how to be a general contractor might be your core skill, your top skill should become project management.

How well you manage the project timeline, delivery of materials, and management of the right number of people with the right skill at the right time all factors into completing the project as quickly and profitably as you can, with the quality needed so you can move to the next one.

Volume-Based Business Model = Merchandising 

If moving high quantities of products or services is your business model, then your revenue depends on volume and how much you can sell. Some examples of these types of firms include grocery stores, software companies, some retail stores, and wholesalers.

How you display and market your products will affect how many customers you can get in the door and how fast you can sell. Your top skill should become merchandising and all things marketing.

Your Top Skill Is No Longer Your Core Skill

These four types of business models serve as a sampling to show that once you achieve some level of success, your core skill will no longer be the keystone to further success. Developing skills beyond your core skill will take you farther than you ever imagined you could go with your business.

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Five Subtle Ways to Carve Out More Business Profit

Whether we’re headed for a recession or not, it’s always a good time to squeak out more profits from your business books. We’re not talking about drastically slashing expenses or spending a lot to raise revenue; the tips in this article are long-term ideas to gently lift up your profits.

Timing on Capital Purchases

The timing of asset purchases, such as equipment, a truck, or even a PC, can be tricky. Understanding the best timing for asset purchases and replacements can make a difference in your profits.

When purchasing a new asset, gain a good understanding of the return on investment so that you’re prepared from a cash flow standpoint. With more complex businesses, it’s a good idea to hire an accountant who knows your industry and has capital expenditure experience.

When replacing an asset, it should be timed so that the asset is replaced before you have to spend a lot on repairs, but not so soon that you don’t get good use out of it.

Rent and Utility Contracts

When rent and utility contracts come up for renewal, this is the time to bargain. If your landlord hasn’t fixed something, you can at least use pressure to get the repairs accelerated.

For utility contracts, especially internet and phone, the price often goes up when the contract runs out. This is the time to get it lowered back down by asking for a new customer deal (it never hurts to ask!). Communications companies are constantly creating new deals and packages, so you should be able to jump into one of those to keep your costs from going up.

Profit in Leftovers

What assets have you got lying around that aren’t working for you?  Put them to work!

Here are some examples:

  1. Cash – make sure your excess cash is safely invested or at least in an interest-bearing account.
  2. Extra space – rent out space that you are not using or only using some days. This solution can have many different looks to it beyond the monthly renter. As an example, virtual workers looking for a conference room for a day could be a money-maker for you.
  3. Manufacturing firms can sell the scrap from their assembly lines as well as their obsolete inventory.
  4. Excess construction materials can be sold, donated, stored for the next job, used on a new small project, or used as firewood.

Training

If employees are wasting time, they are wasting money in the form of salary you pay them. There are three good solutions:

  1. Offer training – perhaps they haven’t been shown what to do correctly or how to do it efficiently. Or they may need to break bad habits.
  2. Re-energize employees with incentives, new benefits, or motivational training and events.
  3. Redesign your processes and automation, then retrain – it could be your workflow needs revamping to make it more efficient.

If these options don’t work, it could be your employee is a bad fit. You know what you have to do in that case.

Stop the Subscriptions

Those recurring monthly charges just keep adding up. The average small business uses dozens of apps, meaning they also likely have dozens of $20 to $50 automatic monthly charges going on a credit card somewhere in your business. This includes magazines, memberships, dues, conferences, newsletters, gadgets, and software.

If you’re making a lot of money, you may have trouble finding the time to research what subscriptions you really need versus what you don’t. But in the long run, you will make more the sooner you sit down and examine this area of spending. Stop the $20 to $50 madness by reassessing what subscriptions you really need and cancelling the ones you don’t.

Try these five ideas to give your profits a permanent, long-term boost.

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Unravel Your Competitors’ Secrets with Mystery Shopping

Every business has competitors of one sort or another, and in many industries, it’s crucial to know what your competition is offering their customers. The good news is you can often find out what your competition is up to, and this is where mystery shoppers come into play.

A mystery shopper is a person who is hired to visit and shop your competitors for the purposes of sharing information about their experience. Mystery shopping is one way to collect input so you can complete a Competitive Analysis – a report on who your competitors are and what they are doing. This report should be part of your marketing plan and will help you spend your marketing dollars wisely.

Let’s say you own a fabric store, and you want to know what other stores in your area are doing. You can make a list of the four or five fabric stores in the three zip codes around you. You would then provide that list to your mystery shopper, who would visit each of the stores. You might also provide your mystery shopper with a list of questions or a checklist of things to observe and/or purchase. The mystery shopper will take detailed notes about their experiences at each place and report their findings back to you.

From your mystery shopper’s notes, you can find out many things:

  • How does their storefront look? What is their curb appeal?
  • Was it easy to find parking or was it congested?
  • What are their opening hours and do they open on time? Are there people waiting to get into the store at opening time? Or do you need an appointment or reservation to use their services?
  • Did employees provide a greeting when entering the business? How friendly or approachable are the employees?
  • How does the store look? Is it crammed full with items or sparse?
  • What kind of displays do they have and how attractive are they?
  • Is their inventory broad or deep or both? What type of items and brands do they carry compared to our store? Are there brands, items, or product lines I should be carrying that they do that I don’t?
  • If a service firm, what does their waiting area look like? What do their service areas look like?
  • Were there a lot of customers in the store? How long are the checkout lines?
  • How clean is the store? Do you feel comfortable with the level of cleanliness?
  • Taking a sample of items and checking price, how do my prices compare with theirs?
  • What was the purchase experience like? Were you offered an upsell or a coupon? What does the checkout area look like? Were customers offered a bag for the items?
  • What was it like to return an item? How strict is the return policy, and was the service friendly or hesitant?
  • Was there follow-up, such as with email promotions or a thank-you note?

You can also find quite a bit online to supplement your competitor research, but the focus here is on the face-to-face experience.

Mystery shopping is not just for retail; you can use it for professional and personal services, health care, some real estate services, restaurants, trades, and nonprofits. You can also adapt the idea to other industries, such as construction and manufacturing.

Once you have compiled the information on your competitors, you can look for ideas to improve your business that are in line with your own business brand and culture. These improvements are often in the area of customer service, but can also include adding inventory, changing hours, adding store features or events, and more. You may even be able to find ideas to implement at a lower cost than your competitors, giving you an edge on profits.

Where do you find a mystery shopper? You can hire individuals or a company that specializes in providing mystery shoppers. Many people consider a friend for this role to save money, but we don’t recommend it unless they are trained observers with significant customer service experience. You’ll need a budget to pay the shoppers for their time as well as what they will be purchasing on your behalf.

Hiring mystery shoppers provides easy access to your competition and is very often well worth the time and money spent.

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How to Make Accountability Work

Almost every successful business owner craves accountability. We’re wired to respond to crises and to help others, sometimes before we help ourselves. Entrepreneurs are excellent in running their day-to-day businesses, but some need more accountability to meet internal deadlines and long-term goals. Let’s take a look at how we can increase our accountability.

Setting Goals and Deadlines

The first step to being accountable is to have something you want to achieve, and this means setting goals. We all have projects we want to do that haven’t been done for a variety of reasons. Just choose one, and make a timeline of tasks and milestones that you would like to be held accountable for. Mark your calendar for each milestone and the project’s end date. Display your list of milestone dates prominently on your desk or wall where you work. Carve out time to work on your project by blocking out your calendar.

Connect with Your Purpose

Take some time to analyze why you want to complete your project. How does it connect with your business purpose, mission, vision, and values? Document your why and display it prominently next to your milestone list. This will help you stay focused.

Publish Your Goals Publicly

Use social media or another means of communication to share your goals publicly with peers, friends, or co-workers. At this point, it becomes “real” for many entrepreneurs. It’s a big step to put yourself out there. Now you have to do it or face embarrassment and other consequences later. It may feel scary to do it, but this step works!

Consider an Accountability Partner

Some people do very well by partnering with a peer or trusted business person. This can be a mentor, a paid coach, an advisory board, a mastermind group of people, a nonprofit group, a co-working group, a peer, a vendor, an incubator, or an investor. Most experts do not recommend that you choose a friend.

Your relationship can be one-way or two-way. Perhaps you will hold them responsible for something they want to achieve, so that the relationship is reciprocal.

Tell your accountability partner to push you and to be candid and honest. They may need your permission if it’s an informal arrangement. Set meetings in advance every week (or two weeks), where you review your progress and report on your milestones. Allow your partner to point out mistakes, or acknowledge them yourself. Make course corrections, using your partner as a sounding board.

Make sure you are candid and honest as well, focusing on results and not excuses. Know when you’re procrastinating and dig deep to discover why. Often, it can be a lack of resources or time, but coupled with that is usually a mindset issue or simply fear of failure that needs to be brought to the surface.

Celebrate

Celebrate every milestone achieved.  Reward yourself, especially if it’s a project you’ve been putting off for years that is finally getting off the ground. This reinforces positive behavior and creates enthusiasm and momentum.

Beyond Project Accountability

You can use this same formula to achieve accountability in many areas of your business, such as these areas:

  • Financial accountability via your accounting firm or financial consultant
  • Staffing or supervising accountability via HR consultants or a coach
  • Technology accountability, via an IT firm or consultant

This type of accountability makes the functions of your business run better. You can also apply these ideas to your personal life goals.

Accountability can make a tremendous difference in achieving the success you want, so try it and let us know how it’s working for you.

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Should You Get Cybercrime Insurance?

The short answer to this question is YES! Incidents of cybercrime have been problematic for a long time, but have soared exponentially since the start of the pandemic. If the reputation of your firm depends in part on your maintaining confidential client records secure and private, then this insurance is a must. It’s not a matter of “if,” but “when” your private business info will be breached.

Finding the Right Insurance

The best place to start is your current insurance agent or a general insurance broker that you trust. Cybercrime policies are separate policies that cover specific acts, and you will need to read the policy carefully to see exactly what you are protected from. You should also distinguish between personal and business policies; you may want both.

In a business policy, some of the items you want to consider being protected against include:

  • Data breach
  • Ransomware attack
  • Spoofing and identity theft
  • Wire fraud
  • Civil fines
  • Lawsuits
  • Costs of notification, reputation repair, forensics and data restoration, credit monitoring, and other potential damages

A good policy will cover some or all of these costs:

  • Business interruption costs
  • Data breach costs
  • Extortion costs
  • Crisis management and public relations costs
  • Data recovery costs
  • Computer replacement costs
  • The cost of reputational harm

Just like any other insurance, you will need to complete an application to obtain a quote. Some of the standard questions include:

  • Type of products and services sold in the business
  • Type of electronic data stored on its computer systems
  • Whether laptops are password-protected
  • Whether you have written network security and privacy policies in place
  • Whether you have physical security procedures in place
  • Whether you have the most current software and processes to keep it upgraded
  • Whether you have backups
  • Whether you monitor unauthorized attempts to access systems
  • Whether you are in compliance with PCI DSS (Payment Card Industry Data Security Standard), HIPAA (Health Insurance Portability & Accountability Act), and GLBA (Gramm-Leach-Bliley Act)
  • Whether you have a written document retention and destruction plan in place
  • Whether you have encryption enabled
  • Whether third parties are involved in data handling
  • Whether you have a process to check copyrights of materials you use
  • Whether you have a risk management education program for employees
  • Your current insurance policies
  • Whether you’ve had a breach in recent years
  • Whether you’ve had any lawsuits or claims in this area
  • Whether you use a firewall
  • Whether you use anti-virus protection
  • Whether you have an employee/third party off-boarding process that terminates access to computers and data

As you can see, the application process itself is an excellent way to “cross your Ts and dot your Is” when it comes to putting safeguards in place for your business. And of course, your premium will be less expensive when you have these items in place. It goes without saying that your premium will be less expensive if you get insurance before you are attacked, so that you have a clean application.

A key part of owning a business is managing enterprise risk effectively, and a cybercrime policy will go a long way toward protecting your hard-earned investment and giving you peace of mind so you can sleep better at night.

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ESG and Small Businesses

Pick up just about any public company’s most recent annual report, and you’ll find a section on ESG. ESG stands for Environment, Social, and Governance, and the trend of not only considering, but also measuring a company’s sustainability performance on ESG issues has become key. A new generation of investors is driving this movement as they become more discerning when selecting companies to invest in.

While ESG is still predominately a large company issue, small companies can benefit from being aware of this trend. But first, here is a very brief summary of the ESG components:

Environment

Measuring a business’s impact on the environment means taking into consideration topics such as climate change and sustainability. How many natural resources does the company use, and are they replenishing them as they use them? If they are polluting, how are they cleaning it up?

Social

The social impact of a business is the broadest of the three areas. It includes a multitude of topics, including:

  • Diversity and inclusion in the workforce and with suppliers
  • Consumer protection related to its products
  • Human rights, including workforce issues such as working conditions and minimum wage, especially overseas
  • Animal welfare in product research and development

Governance

The area of governance measures the leadership of the company when it comes to topics such as ethics, transparency, compensation issues for both executives and employees, and employee relations in general.

Accounting for ESG

The accounting industry is developing and adopting standards for how to measure a corporation’s sustainability performance. As of this writing, the IFRS (International Financial Reporting Standards) Foundation has proposed the creation of the Sustainability Standards Board, which will help to set standards for ESG in 140 countries.

This move will better align the current financial performance of the company with the new sustainability measures. However, all of this is many years off, as there are many organizations that have developed standards for numerous components of ESG that need to be consolidated and adopted.

In the meantime, we do know that positive sustainability performance by a company drives positive financial performance. There are many ways small businesses can participate in ESG’s benefits.

ESG and Small Business 

ESG can have a positive impact on your company’s value, company culture, who you hire, the vendors you select, and the customers that select you.

As an example, if you plan to do business with a large company, mirroring their ESG values can help you align with them, giving you an edge in the selection process. Similarly, when you communicate your ESG values and contributions, you are more likely to attract employees with the same individual values, making for a better fit.

While there are a lot of things a small business can do, here are just a few ideas:

  • Disclose your starting hourly rate, if it’s well above your state’s minimum wage, to attract better quality hiring candidates.
  • When purchasing vehicles, consider electric or hybrid.
  • Match employee nonprofit contributions, and give them time off to volunteer.
  • Practice transparency when it comes to executive salaries or financial results.
  • Write and post a diversity and inclusion statement.
  • Conserve electricity by closing off unused spaces, turning off lights when not in use, and switch from gas to electric appliances when possible.
  • Optimize service routes to reduce fuel consumption.
  • Donate excess food to shelters (in the case of restaurants).
  • Protect customers’ private information with privacy processes and policies.
  • Make product components recyclable, purchase supplies that are recyclable, and train employees to recycle.

Add your own ideas to the above list.

Ask yourself how your business measures up when it comes to ESG, and make a plan to make the changes you want to see in your business.

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How a Loan Affects Your Financial Statements

Getting your business loan can be an exciting step in the growth of your business. Recording your loan properly in your accounting system usually requires special handling by your accountant. Your loan statement will provide the information you need to get it booked properly.

You’ll need the following pieces of information about your loan:

  • Total amount borrowed
  • Date of loan
  • Date of first payment
  • Payment amount
  • Term of loan
  • Number of payments
  • Interest rate

The full amount of your loan should be recorded as a liability on your business’s balance sheet. Two liability accounts should be set up: one for short-term and one for long-term. The offset is either an increase to cash or the recording of new assets like a car, truck, or building.

Each payment you make consists of two parts: interest and principal. Interest is an expense and is recorded in an Interest Expense account. It will reduce your profit. Principal is the amount you pay toward paying off the loan. It reduces the liability account where the loan is recorded. It does not affect your profit, but it does improve your liquidity with each payment you make.

The interest and principal amounts are not the same for each payment. Early loan payments consist of higher interest and lower principal amounts. As you reach the end of paying off your loan, the interest portion is smaller and the principal becomes larger. An amortization schedule shows you the exact amount of interest and principal for each payment.

Each time you make a payment, cash is reduced for the entire amount of the payment. The offset is split between interest expense and your loan liability, using the amounts in the amortization schedule. When you code your loan payment, you can use the amortization schedule to get the correct amounts to both of those accounts.

In a simple service business with no assets except cash, your cash balance can mimic your profit level. When you introduce loans and new, non-cash assets with depreciation expense, that won’t be true anymore. You might wonder why you have no cash and more profits, or the opposite might be true. This is why it’s a good idea to understand how these transactions affect your Balance Sheet and Income Statement as well as your business’s overall financial health.

At year-end, your accountant can make correcting entries if needed between the loan balance and interest expense. They can also adjust the short-term and long-term liability accounts to reflect the correct balances for the upcoming year. The amount of principal reduction planned for less than one year goes into the short-term liability, and the rest goes into the long-term account.

If you failed to make payments or made them late, your accountant can make those allocations as well using manual journal entries.

Often, when you get a loan, you have also purchased some type of asset, such as a car or land and building. Those assets should be recorded on your books correctly as well. You should have some type of closing statement or purchase contract that has the details for your accountant. They will also compute and record the correct amount of depreciation for the asset type.

Your accountant can speak with you in more detail about your specific situation and can better explain the interplay between cash and profits if you are interested. Feel free to reach out to us anytime.

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How to Write a Refund Policy

A refund policy defines the processes and rules for when customers want their money back and want to return the products or services they purchased from you. It’s often required by your credit card or shopping cart company as part of maintaining PCI (Payment Card Industry) compliance. Plus, it’s just a good, fair business practice to post one.

As a business owner, you can set your own refund rules. The important thing is that they are communicated clearly to the customer in advance of their purchase.

A good refund policy answers the questions that customers have when the item they purchased from you does not work out. It reduces conflict and ambiguity, and improves customer service. It also helps your employees work with customers’ expectations, by allowing them to refer to the posted policy that a customer can see with their own eyes.

Here are some of the components you’ll want to address in your refund policy:

Items to be returned: Which items can be returned and which can’t? Some products, after opening, like food, simply can’t be returned safely. You might still honor a refund of money even if the item can’t be returned or re-sold.

Condition of items: You may want to stipulate for some returned items that they are in a condition to be re-sold. That means the customer may need to return packaging as well as the item in order to qualify for a refund.

Time limit: How long from the date of purchase do customers have to return the item and ask for a refund? Common time limits range from 7 to 30 days.

Shipping: If shipping cost is involved, who will pay it?

Processing time: How long will it take to receive a refund once the item is returned?

Money: How will the money be returned? Will it be on the credit card used? What if it is cash or a check? Or will you give store credit only?

Requirements: Will customers need to fill out a form, request refund approval, or use a specific shipping return label?  What instructions do you need to provide them for proper return requests and processing?

Fees: Will there be a re-stocking fee, cancellation fee, return processing fee, or any other fee that reduces the amount of the refund?

The first step is to decide the answers to all of the above questions. You might be tempted to have a “no returns, no refunds” policy, and this could be the right thing in many cases. However, the refund policy is a chance to build trust with the customer, and a rigid one could cause lost sales. Often a “no questions asked” refund policy can increase sales in the long term. Only a very tiny percentage of people will take advantage of it.

Once you have determined the answers to your refund policy, you can write up the policy. Post it on your website and near your cash register or checkout areas of your store.

Next, make sure you have a smooth process in place for handling returns on a timely basis. Most stores have a separate checkout area or customer service desk to process returns so that they don’t slow down the regular check-out lines. Employees should be trained on how to talk with the customers, how to accept the returned items back into inventory for resale or return back to the vendor, and how to use the cash register or shopping cart system to process the returns.

You can even turn returns into a positive experience for everyone. If an item is the wrong size, it may be able to be converted into an exchange for a different size so the sale is not lost. A great sales person can also provide upsell opportunities for new or similar items to the returned item. Proactively, your store can sell warranties at the time of purchase for selected items.

The more customers you have, the more chances there are of having a customer who asks for a refund. Be prepared with a clear, fair, well-documented refund policy.

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How to Keep Your Customers Coming Back

Measuring and encouraging customer retention is important for businesses in many industries. There are a couple of great measures to see how you are doing in this area. We’ll explain those and provide some tactical tips in this article.

Measuring Customer Retention

The most common metric to measure customer retention is the customer retention ratio. The best report to run to gather the data for this is a Revenue by Customer Summary Report. Each customer should be listed in a row of your spreadsheet, and each year’s revenue for that customer should be listed in the columns.

From this report, you can get the following numbers. Let’s use 2020-2021 as our measurement period.

A = How many customers you had with sales in 2020

B = How many customers you had with sales in both 2020 and 2021

The formula is B / A, which will give you the retention ratio. The formula A – B will give you a count of how many repeat customers you lost.

C = How many customers you had with sales in 2021, but not 2020

Answer C will tell you how many new customers you gained in 2021. This doesn’t inform customer retention metrics, but it does help to know how many lost customers you replaced.

Now dollarize your figures.

D = 2020 total sales of customers you had with sales in both 2020 and 2021

E = 2021 total sales of customers you had with sales in both 2020 and 2021

The formula E / D measures the percentage increase or decrease in sales of your repeat customers, so that you can see as a trend whether they are buying more or less from you. A lot of factors go into being able to influence this number, including upsell and cross-sell opportunities over time, sales communications, your business model, and products offered to repeat customers.

One final measure is customer lifetime value, which is easy to pull. Run your Sales by Customer Summary Report for all of the years that you have in your accounting system, then sort by highest revenue. Your most valuable customer over the years included will be listed at the top of the report.

Want to compare how you’re doing with other businesses? Industry-standard value ranges for each of these metrics vary greatly and are beyond the scope of this article. However, your best competitor is yourself, and learning how you can improve your own results year after year can be time very well spent.

Encouraging Customer Retention

No matter what industry you’re in, the best thing you can do to improve customer retention is to maintain an email list of customers, so that you can communicate with them on an ongoing basis. Letting them know when you have sales, new products and services, and even new staff members can go a long way toward building long-term relationships.

Other ways to promote customer retention include:

  • Your business model – a VIP membership or subscription model with perks and special access and bonuses can work for numerous businesses to maintain customers
  • Rewards programs
  • Special events
  • Special gifts
  • Thank you notes
  • Special discounts or exclusive offers
  • Social media presence, especially groups and active engagement where questions are encouraged and answered

Anything to make your customers feel special will work to increase retention. Think about what you can do to increase customer retention, and make a plan to execute your ideas. If you’d like to find out more about calculating these metrics, please reach out.

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Why Are You in Business? Crafting Your Mission, Vision, and Values Statements

Most large businesses have developed mission, vision, and values statements to help guide them and inform stakeholders about the company’s strategic direction. Going through this strategic exercise is a wonderful idea for even the smallest business as well.

A company’s mission statement lists its core purpose and desired impact for employees, customers, owners, and other stakeholders. A vision statement defines what the company wants to be. A values statement describes what the company stands for.

It’s a perfect activity for business owners to answer and remember why they built the business in the first place. It also serves to correct and re-align the trajectory of the business.

Mission Statement

Start by asking what impact you want your business to have on the outside world. Here are some mission statement examples that are frequently quoted:

  • Harley-Davidson: More than building machines, we stand for the timeless pursuit of adventure. Freedom for the soul.
  • Disney: The mission of The Walt Disney Company is to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world’s premier entertainment company.
  • Nike: Nike exists to bring inspiration and innovation to every athlete* in the world. Our purpose is to move the world forward through the power of sport – breaking barriers and building community to change the game for all. *If you have a body, you are an athlete.

Notice how each one is short and simple to understand. They focus more on the big-picture benefits they bring to customers and less on how they will get there.

To write your own mission statement, ask yourself what your business’s purpose is and how you will impact your customers’ lives with your products and services.

Vision Statement

A vision statement is big, bold, and futuristic. What do you want your company to be?

Here are a few examples:

  • Harley-Davidson: Building our legend and leading our industry through innovation, evolution, and emotion
  • Deloitte: We aspire to be the Standard of Excellence, the first choice of the most sought-after clients and talent.
  • Amazon: Amazon strives to be Earth’s most customer-centric company, Earth’s best employer, and Earth’s safest place to work.

What do you want your company to become?  That’s your vision statement.

Values Statements

Values statements are typically a set of adjectives or statements that answer what the company stands for. They can be in the form of leadership principles, core values, or a similar format. These days, they often include values on environmental, social, climate, global, human rights, diversity and inclusion, sustainability, and many other current issues. They can take the form of additional strategic statements on each one of these issues.

Sample values statements can be found in the company’s annual report as well as the About or Company section of their website.

Here are some examples:

  • Harley-Davidson Principles:
    • Communication – Communicate with purpose, structure, facts and inspiration
    • Agility – Accelerate, innovate and thrive in a rapidly changing environment
    • Impact – Focus on impact, not process, and be outcome driven
    • Simplicity – Pursue the simplest path to achieve each outcome
    • Speed – Don’t let perfection get in the way of process and pace
    • Culture – Be fair, honest, positive and creative. Strive to win and have fun.
    • Courage -Take risks and go against the norm
    • Judgment -Think strategically and make informed decisions
    • Focus – Focus on a short list of meaningful opportunities that build desirability
    • Lean – Maximize impact with limited resources
  • Coca-Cola Behaviors We Focus on:
    • Curious
    • Empowered
    • Inclusive
    • Agile
  • Merck Values:
    • Patients first
    • Respect for people
    • Ethics and integrity
    • Innovation and scientific excellence

Your mission, vision, and values statements will help you communicate the qualities of your business. It can help in hiring to see if a candidate’s individual values align with the core corporate values, and with customer acquisition when prospects see what your company is about. It can also help you remember your roots and why you work so hard every day.

We’d love to hear from you when you write up your mission, vision, and values statements.

Posted in Business Tips | Comments Off on Why Are You in Business? Crafting Your Mission, Vision, and Values Statements