Your mission statement can be totally useless or a gold mine

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Nine out of 10 of all mission statements I’ve read in business plans are a waste of time, paper, or digital space. The rarest is a useful vision of strategy or a useful reminder of long-term goals.

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I read hundreds of business plans every year. I can do this since I’m a member of an Oregon angel investor group and also because every year I judge several major venture capital competitions. Mission statements are common because many business plan documents and guidance recommend including one.

Related: Create a Mission Statement You’ll Remember

So what makes a mission statement useful? I see two types of approaches to mission statements that work:

1. Set goals for customers, employees and owners. I believe that a healthy business benefits all three groups. Most mission statements include proposed benefits for customers, but relatively few include goals for employees and even fewer include goals for owners.

But why not? Doesn’t the company exist to make profits for the owners? Doesn’t it need to find, keep, inspire and reward employees? These objectives are all part of the mission.

2. Define a strategic orientation on a specific target market segment. This would include a particular type of commercial offer intended to attract or meet the needs of that specific market group.

The best mission statements do both: they set the goals and define the strategy.

Related: How to Create a Business Plan? (Infographics)

Consider this hypothetical example, an imaginary mission statement for a fictional restaurant:

“We offer organic gourmet foods from local sources for people who enjoy fine dining without compromising healthy eating. We want a diverse and respectful workplace where chefs can be creative and experiment and people can enjoy working with others. And we want to get a fair return on the investment of our owners.”

A good mission statement serves as a useful daily reminder of the company’s basic strategy and long-term goals. And in the particular case of a business plan drawn up for investors or lenders, the statement provides a useful summary of objectives and strategies.

The most common reason a mission statement fails is that it’s just a collection of buzzwords and clichés that don’t say anything. You may have heard of the Dilbert mission statement generator. The website is no longer available, but it chained bold phrases together to create meaningless mission statements.

In his book The art of departure, Guy Kawasaki suggested a simple test to expose the futility of most mission statements. Take a mission statement, he said, and try to guess from its words alone which company it relates to. Can you tell a company apart from all of its competitors by its mission statement? Not often.

Look at your company’s mission statement, if you have one: would your customers know it’s yours and not your competitors’?

Conclusion: Don’t write a mission statement for your business unless it has strategic utility. Generic mission statements are just a waste of time. And a business plan doesn’t need a mission statement unless it serves a specific business function.

Related: The Worst Business Plan Mistake Entrepreneurs Make


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