Business Plans: How to Develop a Business Mission Statement

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  • 0:05 Why Have a Mission Statement?
  • 1:17 Developing a Mission Statement
  • 1:45 Step 1: Not Too Narrow
  • 2:19 Step 2: Not Too Broad
  • 2:42 Step 3: Just Right
  • 3:51 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
Companies must develop an effective business mission statement in order to have an effective foundation for their marketing plan. This lesson explains what a mission statement is and the characteristics of a good business mission statement.

Why Have a Mission Statement?

Many startup companies skip the most important step of creating a business mission statement. The importance of a mission statement is that it communicates to the consumers and investors the reason the company is selling their product. The mission statement is based on an analysis of benefits sought by customers and a summary of the business environmental conditions. It should summarize the entire reason a company is in business, and what the purpose of the product is in relationship to the consumer.

An example of an excellent business mission statement would be Facebook's. Its statement says, 'Facebook's mission is to give people the power to share and make the world more open and connected.' Another superior statement would be Google's statement, which says, 'We want to organize the world's information and make it universally accessible and useful.'

A new candy company has opened in town, and the business team is trying to create a business mission statement. The statement must identify the boundaries and beliefs of the company to ensure that it will have long-term success and be able to make the correct decisions and strategies. It will also be the foundation for any marketing plan.

How to Develop an Appropriate Mission Statement

There are some basic rules for the candy company to follow in order to create an effective business mission statement. Sugar Rush LLC needs to first decide what business it is in. The team has easily decided on the fact that they are in the candy business. The purpose of their business is to create a little smile with their customers through a jolt of sugary candy. The Sugar Rush Candy Company needs to make sure that its mission statement passes the three-step test.

Step One: The Mission Statement Cannot Be Too Narrow

The first step is that the statement can't be too narrow. For example, Sugar Rush should not have a statement that says, 'We make lollipops.' This is too limited a statement and does not fully explain the benefits the company provides. It also is a limiting statement in what products Sugar Rush produces for the market. When a business mission statement is too narrow, it's called marketing myopia. It means defining a business in terms of goods and services rather than in terms of the benefits customers seek.

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