Corporations Have Mission Statements but Smaller Businesses Don’t
Every week I meet with the heads of publicly held corporations and they all have a Mission Statement. I also analyze smaller businesses, private ones, including Mom & Pops. And none (well almost none) have a Mission Statement. Why is this?
Why do Smaller Business Lack Mission Statements?
The quick answer is “Who Knows?”. But it’s not hard to take some educated guesses. Before I give those guesses, let me define mission statements. In our performance enhancement strategy Your Mission Statements are Impressive, we discuss the merits of 5 mission statements, including the traditional Mission Statement. Here, I will use Mission Statement to denote the traditional one, and mission statements to denote the class of 5 possible types of mission statements. Incidentally, those 5 are Mission Statement, Profile Statement, Corporate Mantra, Vision Statement and Statement of Social Values. But we won’t be going into those.
Why Should Smaller Businesses Have Mission Statements?
For a few reasons smaller businesses should have mission statements.
- Much of the time your customer doesn’t know what you can do for them. Having a mission statement helps clarify why you are in existence for them
- Your competitors don’t have them. You’ll immediately seem special compared to the rest.
- You increase your Corporate Presence. In general, people trust larger companies better than small ones. Since large companies have mission statements and small ones don’t, the logic is simple
- It helps you grow. At Performance Business Design we never say small business. Thinking small results in stagnation. Thinking big can result in growth. So, acting as the larger businesses do will help you become large yourself. Similar to “think and act like a skinny person will help you lose weight”.
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IMAGINATION PARK BUSINESS PERFORMANCE: 57% July 2017
ASSET PERFORMANCE FACTORS (all are 1 to 10)
COMPETITIVE AND INTELLECTUAL PROPERTY RISKS 2 I’m not an industry expert here, but I have to believe there are a lot of content producers selling to Hollywood studios.
PRODUCT MIX 10
They have a well-chosen blend of music, script, all tailored to the new environment for movie production. Makes sense.
PRODUCT VALUE 3
Sounds good, though I have to believe the writer-in-the-basement, armed with a computer and software, can also produce original content cheaply.
Still, there ties to both people and places (namely India) is noteworthy While I resist thinking this way, the fact that none of 20 content packages haven’t been sold yet tells me it is a rocky road
MARKETPLACE (supply/demand, financing environment) 10 Very timely, given that major studios are craving cheaper content
PEER VALUATION 10
This is an original story. All the others are enormous companies.
BUSINESS STRATEGY (and operations) 5
Sound, though I’d like to here more nuts and bolts detail of selling the packages and getting the new venture launched.
MANAGEMENT (Ownership, g&a) 10
G&A of 700,000 is 8% of Market Value which isn’t low (I prefer 5%).
Although, this is mostly because of the low valuation.
Personalities ar appropriate for the Hollywood world FINANCIAL STRATEGY (cash, overhang) 5 Cash to last less than a year with little talk of additional financing isn’t good.
Minimal option warrant overhang, about 10% The previous balance sheet was a mess. This is both good and bad. The good is that the new CEO seems to know how to run a company.
MARKETING AND OPERATIONS (including project management) 2 Not enough detail on timelines and milestones No discussion of marketing, sales and ramping up staff