The Purpose of a Business

Many a business has been ruined when management begins to believe that the purpose of a business is to make money.

This faulty premise leads to most grievous business errors including becoming product centric or, even worse, financial statement centric.  While product and finance are important and should not be ignored, if these views come to dominate, they make the business vulnerable to clearer thinking competitors.  These views can progressively lead to lost customers, lost revenue and, if management doesn't change, stagnation, decline, a forced sale or another business failure.

Most successful business leaders know that the purpose of a business is to fulfill a human need.

Successful business people spend much of their time and energy working on their profit model, finding new or better ways to fulfill that need or expand the repertoire of what needs they can fill.

They spend time improving their systems for three reasons:  1) they want to discourage competitors from entering their market,  2) they want to increase margins by delivering a better product or service and,  3) they want to take cost out of doing business.

Successful business people know that making money is not the purpose of a business, that making money is the way we score how well the business fulfills human needs.

Successful business people never lose sight of the purpose of their business.

Successful business people are customer centric, first and foremost.  As a result, they score well.