When it comes to growing a business, planning is, of course, crucial. It can help you raise funds (from lenders or investors), define your goals and objectives, and give your business a clear direction.
But all plans are not equal. Businesses that do it well know that to create a meaningful and effective plan, you need a starting point – a foundation on which everything rests.
What’s the best foundation for your business plans?
The answer is simple and won’t surprise regular readers of our Insights: a clear and concise non-financial business purpose.
Put simply, your business purpose is the reason your business exists beyond the pursuit of revenue and profit. It’s something that really can’t be invented and should reflect the client-focused challenges the founder or founders set out to address.
Again, nobody who knows us will be surprised to hear that.
Research from around the globe consistently finds that purpose-driven businesses have a head start when it comes to creating growth that’s sustainable over time.
Is purpose important to stakeholders?
It’s hard to get the results you want in business without having the full support of your various stakeholders – employees, clients, investors and the like.
When you’re clear on your non-financial business purpose, it becomes easy to articulate it to those interested in the success of your business. And that means you have a pretty strong case when appealing for their support. For example:
Employees, managers and leaders are more highly engaged (and therefore motivated to deliver “discretionary effort” when they’re clear on why the business exists. They can more readily appreciate how their roles contribute to the success of the business and, importantly, to client satisfaction and engagement. When all that happens, financial outcomes are likely to be enhanced.
Clients likewise become more loyal to the business and its brand. Research continually shows that consumers of practically any good or service prefer to deal with businesses that can clearly articulate why they do what they do to benefit clients. They’re more loyal to these businesses and become their advocates…to the point where they defend the business if it makes a mistake. Loyal clients mean repeat business and enhanced revenue and profitability.
Investors/financiers are drawn to businesses with a track record of and/or clear potential for sustainable (repeatable, predictable and consistent) profitability. Increasingly they appreciate the impact that clarity of purpose has on that sustainability. So if you want to attract funding to your business, be prepared to articulate your purpose succinctly and without hesitation.
Why start with purpose?
Here are some reasons your business purpose should be the starting point for your business planning process:
Defines your goals: A clear business purpose sets the basis for your goals and objectives, making it easier to align the business plan with these aspirations. This helps ensure everyone works towards a common goal, resulting in better collaboration and improved outcomes.
Guides decision-making: A defined business purpose gives the business clear direction. This helps everyone in the business make decisions that closely align with preferred long–term and short–term outcomes. When your employees have a clear and consistent understanding of your purpose, you create a business that’s more sustainable over the long term.
Helps secure funding: As mentioned above, investors and lenders want to see that a business has a clear purpose and plan for the future. Not unreasonably, they want to help fund focused, committed businesses with a clear vision for the future. After all…they want some degree of certainty that their money is in safe hands. Clarity of purpose – and the extent to which it is embedded in a business - is an increasingly important measure many investors and lenders consider when deciding where to deploy funds.
Increases brand recognition: A clear business purpose can help your business stand out in your market and increase brand recognition. This helps attract customers, employees, and partners, leading to growth and success in the long term.
With all that said, maximising the planning benefits of a clear and well-articulated business purpose. If you plan to deliver sustainable growth successfully, there’s a process you should ideally implement. As you can see from the graphic below, your business and action plan is just one element of the process:
Truly effective planning must start from a place where your purpose - the non-financial reason your business exists - is clear. This is where the overall direction for the business is set.
Purpose is what informs your vision. Your strategy then outlines the medium to long-term initiatives underpinning your "purpose-driven" sustainable growth.
For maximum impact, it's best to create your business plan only after you've addressed purpose, vision and strategy. Without those things, you'll lack the long-term view of your business that enables a clear focus for your shorter-term business and action plans.
And that clarity reduces the risk of engaging in irrelevant activities in the quest for sustainable growth.
And on that point….
Purpose-driven planning has great potential in all kinds of market conditions. When business conditions are generally favourable, most businesses do well relative to their long-term average performance (a rising tide lifts all boats, as they say). However, purpose-driven businesses will usually outperform the pack.
Conversely, when things are not looking so positive, and business conditions turn less favourable, your purpose will remain your “north star” and help you make the sometimes difficult decisions and choices that need to be made.
Also, if you have demonstrated your commitment to a non-financial business purpose over time, your clients and employees are likely to be more highly engaged than those of similar businesses.
Clients will remain loyal to you and support you (as much as they can) through tough times. You may even find that they express that support by being more active advocates of your business, recommending you to people they know.
Similarly, your engaged employees will support you by delivering “discretionary effort”, consistently going beyond what’s expected.
Purpose really can be your business superpower! But only if you put it to work as the cornerstone of your business plans.
Putting your plan into action
Even the best, purpose-driven plans will fail if you expect them to execute themselves – you need to put some effort into that process.
A big part of executing “well” is establishing appropriate milestones and actively monitoring progress toward their achievement.
By “actively”, we mean regularly, critically and objectively reviewing progress.
Our good friends at Empiraa excel here, and it's why GrowthCatalyst has partnered with them to benefit our clients.
Traditionally, businesses might review plans annually (if at all). With the available technology, there’s no excuse for infrequent reviews of your business plan.
Empiraa is designed to pump life into planning. Strategy isn't meant to live in spreadsheets or other documents. The Empiraa platform engages everyone in the business with its strategy. With its "Simple Strategic Framework," Empiraa helps bring your game plan to life.
Using the platform, you can keep on top of your plans more efficiently and effectively than ever. You can see if all’s going well or if there are issues with one or more elements of your plans. It does away with spreadsheets and other more static tools that are frequently used in a business.
You can learn more about Empiraa here.
So there’s more to a great plan than you probably thought
The point we hope we’ve made is that your business purpose is the critical component in delivering a successful business plan. It sets the foundation for your goals, guides decision-making in all market conditions, helps secure funding, and increases brand recognition.
But even if it is your business superpower, it can’t do everything on its own. You need to put in the effort to work through the purpose-driven planning framework to make sure there’s logic in your end result.
And, of course, focus on the delivery of results through great execution.
Feel like you're too busy to work on the business?
And not achieving your growth objectives?
If not now, when will you take action to change?
GrowthCatalyst can help you set your priorities and create a purpose-driven, workable and time-effective action plan for growth.
We invite you to contact us to arrange a conversation, face-to-face or virtual.
Alternatively, you can book a time for an initial discussion here.
And how sustainable is your business growth?
If you're keen for immediate feedback on how sustainable your business growth might be over the longer term, please follow the link to our "Sustainable Business Pulse Check".
And you'll get your results instantly.
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