Why a Business’ Purpose Should Not be to Make Money
This article will explain why the Purpose of any business should never be “to make money”.
The Purpose of a business should state why it exists.
A Business Purpose should define why a company exists – its reason for being. The Purpose should not, therefore, relate to financial gain as the money that a business makes is an result of the activities that it undertakes, it is not the reason why it exists.
If you disagree with this statement, think about what your company does with the money it makes. Does it put it in the bank and never touch it or does it use the money to pay staff, buy equipment, invest in property, etc.? I don’t know of any company which exists purely to make money but if they do exist then is must be a very poor place to work.
To explain this, let’s say that the purpose of your business is to make money. What signal does that send to your staff and your customers? Firstly, your staff are likely to be poorly paid and, therefore, dissatisfied with their job. This will translate into poor customer service since they will not have any commitment to the business and are, therefore, unlikely to ‘go the extra mile’ to help a dissatisfied customer.
In addition, if the company manufactures and/or sells goods then it will probably use the cheapest materials which means that the goods are likely to be of poor quality with a ‘stack ’em high and sell ’em cheap’ philosophy. This will result in a poor reputation in the marketplace. The alternative would be to over price their products or services which would result in a discrepancy in the expectation of the customer vs the quality of the product/service.
When you start asking questions like those in the examples above most people will quickly realise that the reason that they are in business is not just to make money. The dichotomy here is that being Purpose-Driven – embracing the fact the business has an inspiring reason for existing – has many benefits, including improved profitability.