The Purpose of a business

[Derlyn]

@Blurock, couldn't agree with you more.

[Blurock]

This article by Pavlo Phitidis supports and illustrates my philosophy that the purpose of a business is to create new customers.

How to Boost Team Engagement by Focusing on Product, Not Just Financial Metrics (edited)
A business owner was struggling to get his team more involved in driving the company's growth. His goal was to increase revenue and his logic was straightforward: as the company grows, so do opportunities for everyone involved.
They removed financial targets from the conversation and shifted the focus to the company's products and how they directly impact the lives of customers. Aligning the team with the purpose behind the product, resolved much of the disengagement.
The business owner had previously focused solely on revenue numbers. But we redefined growth in terms of units sold, shifting the emphasis from money to the product's value. Every product sold represents a unit of revenue. To meet future forecasts, the company would need to sell five times the current number of units.
By approaching the problem this way, the focus shifted from abstract financial goals to concrete actions that positively impact customers. When the team understood that selling more products directly enhances customers' lives and experiences, they became more engaged. It gave them a clear direction and a sense of purpose beyond just increasing revenue.
The Power of Purpose in Team Engagement
This product-focused strategy helped the entire team gain clarity on what to focus on, where to direct their energy, and how to achieve collective success. They no longer viewed their work as simply contributing to the company's financial gain. Instead, they saw how their efforts could make a difference for the people who use their products.
By "productizing" the numbers, the team became more aligned and motivated. This approach created a broader sense of purpose and highlighted how their work contributes to something bigger than just the bottom line.

In reality, a product alone cannot generate an income. Every unit sold, was sold to a customer, because the product was aligned to the customer's needs. Now if you satisfy that need better than your competitors, you get recurring or repeat sales, which works like an annuity, ensuring a constant flow of revenue to the business. So, in the words of the marketing guru Peter Drucker, "the purpose of a business is to create a customer."

[Blurock]

Once we start analysing our business, we realise that we cannot MAKE money. We can only EARN money. We don't have a machine or a tree to grow money, so how do we EARN it?
We earn money by creating a customer to whom we can sell our service or product. If we do it right and if we do it better than the next guy, the customer will come back and voila! you have recurring income!

Don't tell me you're a plumber or electrician that will never see the customer again. He may need you again in the future and will remember the satisfying service. Or better still, he may tell his 10 friends while having a braai. If only two of them use you in future and they tell another 10 people about you.... Get it?

So, the purpose of a business is not to make money. The purpose of a business is to create a customer. Treat them well and you'll have a customers for life.

[Mike C]

He may need you again in the future and will remember the satisfying service. Or better still, he may tell his 10 friends while having a braai. If only two of them use you in future and they tell another 10 people about you.... Get it?

And the same is true of poor service. The customer might not complain directly to you, but will tell his 10 friends around the braai ... and your business will start feeling it!