Why should your business exist?

Whether you develop a new business or lead an existing one, its all about the money. Or is it? As the industrialist Henry Ford reminded us a long time ago, “A business that makes nothing but money, is a poor kind of business”. I full-heartedly agree and think this remark bears even more value today than in Ford’s era. But if it is not for making money per se, why should your business exist? A careful scrutiny of the various purposes a business may have, shows us that there at least four types of purposes relevant to any business. These lead to four questions entrepreneurs may want to ask themselves occasionally.

Purpose with the business: what should it do for you?
The first question you may want to ask yourself, or your teammates, is what you are or were trying to achieve with the business. Did you want more freedom? Is it the realization of an ideal or an idea? Were you trying to get rid of paper work and red tape? Putting this question first place does not suggest that self-interest always comes first. What it does suggest, though, is that it may be smart to keep in mind whether your business is still doing for you what it was supposed to do and whether you’re still in the right business. If not, this is a signal to make some changes, or to leave, perhaps.

Purpose for the business: what kind of business should it be?
As long as it exists, your business will evolve into some kind of business no matter what. But if you don’t like to be surprised with the kind of business you end up with in a couple of years, it may help to think about this second question upfront. What kind of business should your business be? Should it be large? Innovative? Efficient? The best in its kind? Always the first? The answer to these questions is not a pure derivative of market forces or an automatic result of organizational dynamics. No, the kind of business you end up with, is largely influenced by what you want it to be.

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Photo thanks to IR app

Purpose of the business: what should it do for others?
It is probably this third question that Henry Ford referred to in the famous quote above. It says that your business is a poor one if it fails to be more than a money-making machine. This question concerns the intended and unintended impact your business has on others. Your business has many direct and indirect stakeholders – all of which cannot be served at the same time. Who are yours and how does your business affect them? How does your business matter and for whom? The answers to these questions can give you some insights about the added value of your business.

Purpose in the business: what guides your actions?
Finally, there are values and criteria that guide your everyday choices and actions. Whether implicit or explicit, all your business decisions will be guided by a normative view on what should and what should not be done – according to you. How is this for your business? How do you decide what is right and wrong? Is everything legal also appropriate? Is everything appropriate also legal? Answering this fourth question may help to make explicit how you make your choices and whether you like it that way.

These are not easy questions and answering them may require substantial time and effort. Yet, asking them every now and then in a moment of reflection – in the train perhaps or when driving home – can help you to make sure that your business should indeed exist.