The Purpose of a business

[Blurock]

What is the purpose of a business?

Nine times out of ten I get the answer, "to make money."
Is this why some entrepreneurs try to take shortcuts, supply sub-standard materials and inflate prices?

The question is; where does the money come from?
Obviously from customers.

So should the purpose of a business not be to create a customer? Once you have created the customer, the next step is to retain the customer for repeat business.
So how do you retain a customer and keep them happy and coming back for more? (and also tell their friends).

[Justloadit]

Unfortunately the type of business you own will dictate if it will be a repeat customer. If it is a consumable, then yes you are looking at repeat business.

If I supply a product once every 10 to 15 years, then the rules of the business change with respect to repeat customer.

This does not mean that you become a maverick and supply rubbish to get your money, you will soon get shot down in flames by litigation, especially high end products.

What I see is presenting professionalism, quality and a good service, in order to get a referral to a new customer based on your performance as the business.

[Isetech]

I am sure if you asked any of my customers why they support our business, why they keep using our services, some for as long as 15 - 20 years. I have had one customer, who I had be doing work for over 15 years, turn around one day and said they didnt believe they could trust that I had their best interest at heart, I walked away and have never gone back.

They answer would be trust first and quality second.

If I was in the business of making money, I would be doing things completely different to the way I do things now. I would be a lot less concerned about my reputation, as an honest person, there would be no ethics in the manner in which I conducted my business and my main focus would be to get rich as fast as possible.

I am in for the long game, not the quick buck. This should be the question you are asking. It is easy to make quick money.

What is the purpose of a business?

So should the purpose of a business not be to create a customer? Once you have created the customer, the next step is to retain the customer for repeat business.
So how do you retain a customer and keep them happy and coming back for more? (and also tell their friends).

[Krono9]

I say the primary purposes of most businesses is to generate a return to its shareholders/owners. How you create a sustainable profit generating business is influenced and determined by how you maintain your relationships with your various stakeholders (be it customers, suppliers, employees) through the manner in which you do business.

[Blurock]

"There is light at the end of the tunnel".

A very popular remark when things are not going well, targets are not met or misguided optimism?
But who wants to be stuck in a tunnel when there is a whole world full of sunshine out there?
How did you land in the tunnel in the first instance?

[Isetech]

There are way too many get rich quick, like overnight videos and people flashing nice cars and big houses on social media.

If you are smart and browse through the videos, like I have looking for that get rich quick method, you will notice one thing in common with most of them, they all seem to be linked in some way. Once you start taking note, you will find they are somehow tied together.

You dont get to have Tony Robbins or Gary V on your little podcast, unless you have some sort of connection, backing or links, or maybe links to oil, gold or in some cases governments.

If hard work was the route to riches, Elon wouldn't be the riches man in the word. I am sure there are many people out there who have put in more hours than many of the richest people in the world.

Like everything in life, goggins may not be the toughest in the world, and it didnt happen over night.

[Andrew_van_Zyl]

I had a builder do some work on a boundary wall that had collapsed. A week into the job he wanted more money. I had already paid him 75% deposit. 3 Weeks on, after paying him in full he hasn't got the cashflow to finish the job.

This man goes from project to project, swallowing deposits and thinking it will never catch up with him. He wonders why I don't want to partner with him on projects.

In my business I am proud to say my customers give me their house keys to do work while they are away skiing in Europe. I have fired one customer (yes you can do that) but I have never had my integrity called into question.

So for me certain things have to be a given, such as trust and integrity. After that comes making a reasonable living, and deriving pleasure from what you do.

[Blurock]

How often do we get to a cashier or teller who shows total disrespect for the customer by continuing to talk to the colleague next door?
How often do you get to a business and there is no parking because the staff (including the manager) have parked in front of the business?
How often have you arrived at reception and had to wait while the lady ignores you and continue with an obvious private call on her cell phone?
How often have you been put on hold to listen to the most awful distorted "music" on a company's phone?

Who appoint these people and who train them? Are they even trained or do managers just not care?
Businesses can learn a lot from the hospitality industry although they may also not always be perfect.
Your front line staff are the face of your business. If your face is dirty and not looking good, clean it up.

The customer is so important to your business and all staff should realise that without customers you do not have a business.
Teach them to treat EVERYONE with respect. Be courteous, be helpful and most of all be friendly!

The customer always remembers how he/she was treated and that may be one of the deciding factors to come back for business.
Add value to your business. Most people are prepared to pay for good honest service.

[Isetech]

Going back to "the purpose of a business" ... why you want the to start a business and what you are prepared to do to make that business work will determine the purpose and direction of the business.

For example, lets use me as an example and everyone will have a different purpose.

When I started out, I had no intention of become a huge corporate, I just wanted to make enough money to support my family and be my own boss, rather than making everyone rich from my time being exploited.

I tripped and landed on my face within a couple of weeks, I shuffled, adapted and moved forward, with the same vision. I tripped and fell more and more often, to a point that I wanted to give up. I went to the bank to try get finance for a vehicle, but that didn't go so well, they requested silly things like a business plan and financials and all the stuff, really who wastes time with all that unnecessary stuff. Apparently you do need it.

To this day I have never seen a financial statement for my business, if you have to ask me what my turnover or profit margin was for last month, I honestly couldn't answer that question. You could phone the guy who deals with my books and ask him, he would be able to answer the question.

IF you want to know what is happening with your project at any point, you phone me I can answer any questions regarding the status of the project, I could also give you a ball park figure on what it will cost and that is about it.

Something nobody will tell you about starting a business, to what extent are you prepared to sell your soul, what are you prepared to do to make it work, I dont mean the time and effort. You see business failing everyday, not because the person didnt have a business plan or a degree in business economics, they just weren't prepared to do what it takes to get to where they wanted to be.

The purpose of the business could be the motivation, just understand that not everyone has good intentions and they will expect more than you are prepared to offer , dont sell your soul for money, you will regret it at some point.

[Blurock]

It is important to understand the dynamics and principles of business if you want a sustainable business.
Research has shown that family run organisations in general are more successful. There family-owned businesses in Europe that have been running for ages and the baton passed on from generation to generation. Maybe its the passion or maybe its old family values. Big corporations tend to be cold and clinical and mired in controversy.

My take on this is as follows:
Principle no 1: Carefully choose the Right Supplier. A supplier can make or break a business. (Ethics and trust)
The supplier has to be able to support your business by delivering a quality product/material on time and at a reasonable price.
You may lose business if the supplier runs out of stock or supplies you with sub-standard products leading to complaints from your customers.

Once selected, support your supplier by paying on time (you may need to lean on him someday when you have cash flow problems).
Build a strong relationship so that you may get preference service and attention when needed.
Be loyal to your supplier and do not force him to compete with the guy selling illegally imported cheap stuff.
There may be a long list to add to this, but a supportive and reliable supplier is the foundation of any business.