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Wednesday, June 06, 2007

The Importance of Mission Statements for Small Businesses

"That business mission is so rarely given adequate thought is perhaps the most important single cause of business frustration." – Peter Drucker

With 40% of small businesses failing between the first and fifth years of inception, 27% failing between the sixth and tenth year, and 33% failing by the time the businesses cross their tenth year, the lack of a well-written (and well communicated) mission statement is one of the foremost causes of small business failure.

The mission statement answers the first question of any business venture: What business are you in and what is your reason for being?

The mission statement explains why your organization exists - and what its purpose is.

Companies that do not have a clear and concise written mission statement risk wandering aimlessly in the sea of competitors. A written mission statement forces the small business CEO to think about what he/she is doing and where the company is headed.

Some hints and tips:

  • The most important attribute of purpose is authenticity - not on what looks good to others.
  • The purpose should be valid for 20-30 years - or even longer
  • The simpler the better.
  • Focus on why - not how. ("How" is strategy, and will change over time.)

BOTTOMLINE: Once you have created your mission statement - put your energy into communicating what the mission means - and living it.

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