4 steps to writing an effective purpose statement for your business

At a glance

• A purpose statement is a one- or two-sentence statement that defines a company’s purpose and goals.
• A purpose statement is similar to a mission statement or vision statement, but whereas those exist primarily for internal employees and stakeholders, purpose statements are designed for customers as well.
• Want to learn how to write an effective purpose statement and other business skills? Check out online business degree programs at University of Phoenix. 

What is a purpose statement?

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.

Purpose statement vs. mission statement vs. vision statement

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.

What makes a purpose statement effective?

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.

Clarity

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.

Honesty

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.

Positioning

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.

How to write a purpose statement

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.

1.   Decide who will write the purpose statement

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.

2.   Address your audience

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.

3.   Consider what makes your company stand out

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.

4.   Get feedback

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.

Examples of strong purpose statements

So, how do you pull it all together? Indeed.com has some examples, including:

1. “We strive to protect wildlife through education about endangered species.”
2.  “Our purpose is to bring awareness to the need for medical supplies in overpopulated cities.”
3. “We work toward building a safe and secure community by implementing emergency calling systems.”

Joseph Aranyosi, associate dean of the College of Business and Information Technology at University of Phoenix, offered a few more:

1. “Our purpose is to provide sustainable food alternatives that can help to minimize greenhouse gases and reduce global warming.”
2. “We offer affordable healthcare options for low-income patients to proactively address medical issues and reduce healthcare costs.”
3. “We develop automated customer service solutions and custom-built social media apps to promote small business growth.”

Gain critical business skills with an online degree

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:

• Associate of Arts with a concentration in Business Fundamentals — From management to accounting, the skills learned in this program are essential for anyone looking to advance their business education. 
• Bachelor of Science in Accounting — Businesses around the world rely on skilled accountants to manage their finances and make profitable business decisions.
• Bachelor of Science in Business — Knowledge of the ins and outs of running a business can spell the difference between success and failure in a competitive business world. 
• Bachelor of Science in Communication — It’s one thing to have a great idea, it’s another to properly communicate that idea to a large audience. Develop skills to be a media relations specialist, copywriter and more in this degree program.
• Master of Business Administration — Advance your business skills beyond the fundamentals and prepare yourself for higher leadership roles. This degree program can prepare graduates for careers as business managers, operations directors and more.
• Master of Management — Take your understanding of business organization and management to an advanced level. This degree program is perfect for those with experience in the workforce who are looking to take on greater leadership roles. 
• Doctor of Business Administration — Expand your understanding of organizations, work environments and industry. This program invites participants to delve into cutting-edge research in the field of business and develop skills for solving complex organizational problems.