Purpose of a Business?

[bdblue]

There are several different reasons a person would start a business, and each of these implies a different purpose.

I was junior partner in a business that was started by myself and 3 other people about 16 years ago. For us the purpose of the business was to provide a better place for us to work than our previous employment, and provide an income for us. We were very experienced in our field so naturally our business was intended to provide that service to our clients. The business did well for most of those years but sometimes clients aren't appreciative of our devotion to them and the business failed. I am an employee in another company now.

I can envision that a person would start a company to provide income for themselves, maybe themselves and their family that could also work in the business, or to provide employment for their community if they are wanting to help people.

Similarly I can envision a company started to provide a product that would help people, maybe to produce a product or provide a service that is not currently available.

I can also envision a person starting a company to make a new product that they have invented, thereby fulfilling their dream. Maybe their primary goal is to make the product a reality and income is secondary.

Not all purposes for a company involve profit although a company has to make enough money to sustain itself. However I'm going to pose that most companies are intended to make profit. Throughout human history people have been consumed by needing to provide for themselves and their family, whether hunting and gathering food, selling goods or services, or working as an employee. And most of the time there is a lot of competition so just going out and trying to do something doesn't guarantee success. So not very many people have the luxury of starting a company whose primary focus is not profit.

[Jazz]

Obviously, to make a living, meaning profit. Providing products and/or services with quality and integrity. Being good to employees, but not puting up with lazy asses at the same time.

[Bodog]

To crush your enemies, see them driven before you, and to hear the lamentation of their women!

Just kidding.
To provide freedom for you and yours.
Ideally to have an outlet for your passions and hobbies. To keep busy doing what you love.
To set your kids up with some kind of platform for their success and any subsequent generation.
To provide a living, and more importantly, a life for you and your spouse.

[PaleMoon]

A little disclaimer here, I run my own small business in a very unusual setting and everything I say is purely subjective and probably wouldn't apply to most other people running most other businesses in most other countries.

My first goal is to make enough money to survive; break even and make a little extra on top of that for my family to afford a place to live, good food, good health and holidays once a year. Being able to buy a knife here and there is also a nice little bonus :D Beyond that, I really just want to have an occupation I can be proud of, that can make me happy and that gives me a way to meet like-minded folks. Making your own decisions and following what you think is right is really the best part in all of this.

I get a lot of customers and fellow business people who ask me why we are not expanding, why we are not franchising, why we are not extending our business hours, why we don't add this and that on the menu... I don't really know how to talk to those people. Obscene financial gains will never really be the goal for me. I usually ask them, if they really care, to watch "Jiro Dreams of Sushi". That movie pretty much encapsulates my life/work philosophy, although to a somewhat more extreme degree :o

[SpyderNut]

To me, the purpose of a business is to express one's creativity and vision for a specific product or service. It is essentially the catalyst by which the products and services are made available to the public. By and large, people/businesses are generally motivated by extrinsic factors, such as recognition and monetary gain. However, intrinsic motivators may be more important to some people/businesses than even financial or other gains. For example, rumor has it that Mr. Henry Ford once toured the manufacturing operation of Mr. F. E. Stanley (founder of the Stanley Motor Carriage Company, which built the Stanley Steamer). As the story goes, Ford began to chide Stanley for his comparatively slow and otherwise outdated (and costly) manufacturing process for his carriages. Mr. Ford stated that his own Ford Motor Co. was producing thousands of cars per day, while Stanley's business was producing vehicles in the single digits. Mr. F. E. Stanley reportedly just smiled and said something to the effect of, "We build them this way because we can." Mr. Stanley loved his steamers and didn't care one hoot if the world thought he was nuts.

To put it in the words of Sir Henry Royce (Rolls-Royce): "Strive for perfection in everything you do. Take the best that exists and make it better. When it does not exist, design it".

-Michael

[shunsui]

Two things come to mind:

Making money:

"Commerce is our goal here at Tyrell. 'More human than human' is our motto."
Dr. Eldon Tyrell

Being THE BOSS.

Steve Jobs 1984
https://youtu.be/-ubRL7sXW4k

[Pinetreebbs]

If a business doesn't make enough money, then all the other reasons will be irrelevant...

Chuck I hear you loud and clear. It will only last as long as they can talk investors/banks into investing, until the lottery money runs out, they can no longer get grants from the government or their inheritance runs dry. Then, Poof! it will all be gone. Something some of the philosophizers apparently do not understand.

[vaisforlovers]

If you want to boil it down without all the business mumbo jumbo, you could say the purpose of a business is to make happy customers, without that there is no business to speak of... profits, job satisfaction and expansion can only continue if you have satisfied that one criteria.

My father created and owned his own successful businesses for over 40 years. He once said "a good sale is one where the buyer and seller end up happy."

Jim, I believe you are really close in your statement above. I think happy customers often make for happy businesses owners. But I do not think making happy customers is the PURPOSE. Instead I believe it is creating happiness for the business owner - that is the true purpose for owning a business.

As stated many times in this thread, profit makes for happiness in a lot of people. Sometimes more profit could be made by partaking in practices that lessen the owner's happiness. What does the owner choose and where does he/she compromise? If more profit makes for more happiness, profit wins - like with many group owned corporations. But when quality of life for employees are highly valued, when pride in creating value exists, and when happy customers bring the business owner happiness back, then these three things can trump additional profits.

I understand that without some profit, business owning is generally unsustainable, but I'd argue there are many business owners that could make more money working for someone else, but choose to struggle through owning their own business because it provides them a greater happiness, for whatever reason.

[The Mastiff]

It's more simple than made out to be.

Offer a product or service at enough of a profit to maintain or grow the company. All else is part of the business model.

[vaisforlovers]

It's more simple than made out to be.

Offer a product or service at enough of a profit to maintain or grow the company. All else is part of the business model.

Why does a company need to be maintained or grown? Maintenance and growth are not a purpose.

[The Mastiff]

Why does a company need to be maintained or grown? Maintenance and growth are not a purpose.

The need or desire for growth will cause me, the owner, to run the business in a different way than if I am just keeping a business functioning. A small town stamp and coin store inherited from my father will have a different business model completely if I just want to keep it going to some day pass on to my son than if I intend to expand it on to 3 stores across the region. Goals decide how I go about doing things.

What is a purpose in the context of me running my business? Do I need one?

Joe

* Note: I don't run or own a stamp collectors store.

[chuck_roxas45]

Making customers happy is just a way to make profits. Ultimately, even if your customers are ecstatic when they patronize you, you will go out of business if you don't have ROI.

Bottom line always is to make enough money to make it worthwhile to continue making your product and pleasing customers.

[rak2]

The purpose of a business is to create value.

What that value is, what form that value takes, can vary widely depending on who is in a position to influence it.

The value might be short term profits, or long term profits.
But it can also be providing a product or service to the 'community' or providing employment to the staff.
It might be providing 'meaning' to the owner (and perhaps the staff) in doing/providing something useful.
It can also be just feeding the ego of the owner.

So - businesses can vary widely in their behaviors (and exhibit behaviors that are unexpected if you are assuming that the motivation/value is something other than what it really is).

A business can go into a decline if something changes in the environment to alter the value. A business might go stale after the original owner (and his/her vision) wanders away after 'going public' and entering a diversified product line involving items of no interest to the owner. A popular grocery chain might collapse after the original owner dies and the business experts hired by the family stop doing things that the customers liked.

rak2

[sal]

Hi Rak2,

Welcome to our forum.

sal

[Surfingringo]

The purpose of a business is to create value.

What that value is, what form that value takes, can vary widely depending on who is in a position to influence it.

The value might be short term profits, or long term profits.
But it can also be providing a product or service to the 'community' or providing employment to the staff.
It might be providing 'meaning' to the owner (and perhaps the staff) in doing/providing something useful.
It can also be just feeding the ego of the owner.

So - businesses can vary widely in their behaviors (and exhibit behaviors that are unexpected if you are assuming that the motivation/value is something other than what it really is).

A business can go into a decline if something changes in the environment to alter the value. A business might go stale after the original owner (and his/her vision) wanders away after 'going public' and entering a diversified product line involving items of no interest to the owner. A popular grocery chain might collapse after the original owner dies and the business experts hired by the family stop doing things that the customers liked.

rak2

Very good assessment Rak2...and welcome to the forum.

[Doc Dan]

The reason I shared my story was to illustrate what I think is critical in business. I have built two successful businesses and became the top dog in the entire region in my line. Yes, I was in it to make money, but that was balanced by genuine concern for my customers. Without that, it was all an empty shell and I would not have been nearly so successful. To me, a business must be customer driven. If you care for them, they will care for you and they will not go over to your competition.

[araneae]

So many answers to that question. Gotta have money, which means you need a good product base or an answer to a problem, which means you need good people that want to work and grow with you. If you have those things, hopefully they will sustain, mature and evolve. The customers hopefully will recognize these things and respond, hopefully giving you space to continue to evolve, to take chances, experiment, and hopefully have some fun along the way.

[JT]

Personally I think ideally a business is something that someone starts in a field they enjoy then find away to make it profitable while keeping the customer base happy for the most part. If they can make a reasonable profit doing it and keep it up then that is what I would call an ideal situation.

In an ideal world, this!
doing something you love, and make it a working business instead of just a hobby.

[ChrisinHove]

I regard a business like I do a living organism.

It's purpose, following inception, is primarily to survive.

Secondary purposes may include the desire to thrive, and perhaps leaving behind the natural world analogy, to perpetuate the reasons for its inception which may include its values, or vision.

[The Mastiff]

To crush your enemies, see them driven before you, and to hear the lamentation of their women!

Heh!

I was going to put that in here also. It reminds me of a friend of mine who now manages the finance section at a used car dealership. I have stated before that this guy assumes that every dollar that every customer has belongs to him and any good salesman should be able to figure out how to get it. The customers love him as he is (edit: sensually caressing) them. Management material all the way.

joe