Written by Michael Feder
Reviewed by Kathryn Uhles, MIS, MSP, Dean, College of Business and IT
Every business, regardless of size, industry or revenue structure, needs a purpose statement. The statement should capture a company’s purpose, vision and values and summarize its main goal in one or two sentences.
A purpose statement is a single, concise, declarative statement that identifies why a company exists. It is shared with customers and helps inform business decisions by outlining a business’s direction and how it aims to inspire and positively impact others.
Just like social capital, a purpose statement can cultivate goodwill with customers. People may prefer buying from, or partnering with, companies that maintain a high moral standard. It’s important for companies to maintain those high standards, both for customer visibility and to drive operations forward.
A mission statement, vision statement and purpose statement sound similar, but they actually fulfill different roles. A mission statement best describes a company’s overarching goal. A vision statement is a declarative statement about a company’s purpose. Both statements are often only shared internally with employees or key stakeholders.
Mission statements should describe an organization’s reason for existing. They might describe the mindset of a business’s leaders, list and define core values, or describe how a company inspires to improve or change the world.
A purpose statement, meanwhile, defines a company’s purpose as a means to direct activities. It is meant to be shared not only internally but also with potential customers or brand participants.
To this end, purpose statements should address customers and connect what the business does with whom it does it for. Consider this a person-first version of the mission statement, with customers at the center of a business’s objectives.
Several elements go into writing an effective purpose statement. When creating one for your company, make sure you prioritize elements like clarity, honesty and an understanding of your business’s sector.
Even if potential customers aren’t familiar with your brand, they should be able to understand what you do just by reading your statement. Make it concise, use active verbs and eliminate unnecessary details so you can focus on your main, customer-focused goals.
Exaggerating or including false information can harm your business. Misrepresentations of your company can lead to overpromising and underdelivering — two of the quickest ways to alienate customers.
For best results, be transparent and accurate.
An honest purpose statement should also highlight what makes your company stand out from the competition. This element requires an understanding of your industry and a strong competitive analysis.
Try to help potential customers choose your business over the competition by highlighting your organization’s advantages, all while being careful not to belittle other companies.
When writing a purpose statement for your organization, address your target audience while emphasizing elements that make your company different from the rest. You will need to decide who writes and contributes, and who can provide feedback about how the statement resonates with employees.
First and foremost, decide who will write the statement. This may not be easy, particularly for companies with large marketing departments and multiple executives. Some companies might have several employees who want to write or contribute. In other cases, it might be difficult to find anyone to volunteer.
For best results, make sure someone with a business background writes your organization’s purpose statement. Ideally, this person should have a business degree that included course content in operations, communication and business management.
The best purpose statements are sometimes written by employees with a master’s degree in business. These individuals can leverage executive-level business leadership and administration skills to create something that resonates with all company representatives.
If your company can’t agree on one person, consider making the statement a collaborative effort. Schedule a meeting or two when everyone can share their thoughts. You can use the ideas to form the initial draft before distributing it throughout the company for feedback.
Your purpose statement should be all about your audience. Keep it directed toward your potential customers and describe the elements of your organization that might appeal to them.
This is an opportunity to describe your company’s reason for existence, with customers as your direct audience. Craft the messaging with the recipients in mind, and don’t be afraid to emphasize how important customers are to the company’s continued success.
Your company is unique no matter how many other competitors might be in your field. Your statement should highlight your company’s unique features as compared to every other company operating in your sector and should align with your overall business plan.
Focus on the goods and services that make you a better fit for customers than other providers. To do this, you’ll need consider everything that makes your company stand out. This step is vital when starting a new business since it will help you focus on your organization’s best qualities.
No matter how confident your company might be in the first draft of your purpose statement, it’s still a great idea to get feedback. Give internal employees the chance to read the statement, and remain open to what they have to say about it.
Getting feedback while drafting your purpose statement can help you gain a fresh perspective on your business. You’ll learn to view your company through other employees’ eyes. You’ll also achieve a more complete definition of your company’s purpose.
So, how do you pull it all together? Indeed.com has some examples, including:
Joseph Aranyosi, associate dean of the College of Business and Information Technology at University of Phoenix, offered a few more:
University of Phoenix offers several business degrees that prepare students with skills for a variety of career paths. Whether you’re looking to build the fundamentals or advance your skill set, there’s a degree program for you. Here are just a few online business programs at University of Phoenix to consider:
A graduate of Johns Hopkins University and its Writing Seminars program and winner of the Stephen A. Dixon Literary Prize, Michael Feder brings an eye for detail and a passion for research to every article he writes. His academic and professional background includes experience in marketing, content development, script writing and SEO. Today, he works as a multimedia specialist at University of Phoenix where he covers a variety of topics ranging from healthcare to IT.
Currently Dean of the College of Business and Information Technology, Kathryn Uhles has served University of Phoenix in a variety of roles since 2006. Prior to joining University of Phoenix, Kathryn taught fifth grade to underprivileged youth in Phoenix.
This article has been vetted by University of Phoenix's editorial advisory committee.
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December 23, 2021 • 6 Minutes