The adage that businesses should focus on profit above all else is no longer valid in today's society. A company needs to have a purpose beyond just making money if they want to be successful in the long term.
There are many reasons why businesses need to have a purpose beyond profit. Customers now demand that companies take social and environmental issues into account and are more likely to support those that do. In addition, employees want to work for companies that benefit society and are more engaged and productive when they feel their company is making a difference.
Making a profit is vital for any business, but it is no longer the only thing that matters.
Why Pursuing Profit for Profit's Sake Is Counterproductive
Many businesses make profit their sole purpose, but this can often be counterproductive. A singular focus on profit can lead to short-term thinking and shortsighted decision-making.
Loses Customers
Businesses that only care about profit can often lose sight of their customers and employees, leading to a decline in customer satisfaction and employee morale.
Business Crumbles
In addition, a business with no purpose beyond profit is often less resilient during tough times, as there is no reason to persevere when things get tough.
No Legacy
Businesses without a purpose can find attracting and retaining top talent challenging, as many employees look for more than just a paycheck. They often forget to leave a lasting legacy.
While they may make money in the short term, these companies fail to positively impact the world around them. By pursuing a purpose beyond profit, businesses can avoid these pitfalls and create a legacy everyone will remember.
Why A Purpose Beyond Profit Is Beneficial
As the world progresses, businesses are under more pressure than ever to not only make a profit but also to have a positive impact on society. There are many reasons why having a purpose beyond profit can benefit businesses.
A business with a strong sense of purpose can inspire employees and customers. When people feel part of something bigger than themselves, they are more likely to be passionate and committed to their work, leading to increased productivity and creativity, which increases profits.
Purpose can also help businesses weather tough times and make difficult decisions. During an economic downturn, for example, companies that focus on making a difference may be more likely to continue investing in their products and employees instead of cutting costs. This strategy can help them weather difficulties and capitalize on more opportunities when the economy improves.
How Does Pursuing A Purpose Increase Profits?
It's no secret that businesses need to make money to survive. But what's often less discussed is the role that purpose can play in driving profits, especially for women in business.
Attracts Top Talent
People want to work for companies that stand for something beyond making money. A strong sense of purposes can attract the best and the brightest talents.
Sets Your Business Apart
In today's competitive landscape, businesses need to find ways to stand out from the crowd. A clear purpose can help companies differentiate themselves from their competitors.
Builds Customer Loyalty
Customers are more likely to be loyal to brands that share their values and are more likely to return when they share a connection with a company
Drives Innovation
Purpose-driven businesses are more likely to take risks and innovate because they're not afraid to fail. Instead, they see failure as part of the journey toward achieving their goals.
Strengthens Stakeholder Relationships
When businesses pursue a purpose beyond profit, it builds trust and credibility with all of their stakeholders, including employees, customers, suppliers, and the community.
Pursuing a purpose is not only the right thing to do for society; it's good for business. Companies with a clear purpose are more profitable, more attractive to investors, and better able to weather tough times.
How To Embrace A Purpose Beyond Profit
As business owners, it’s easy to get caught up in the day-to-day grind and lose sight of the big picture. We become so focused on making a profit that we forget why we’re in business in the first place.
So what is the higher purpose? It's different for every business, but at its core, it is a mission beyond simply making money. It is a reason for being behind a company's strategies and decisions.
Reviewing What Matters
It starts with taking a step back and asking yourself what you want your business to achieve. Do you want to make a difference in your community? Will your company create innovative products that improve people's lives? There is no wrong answer here – the important thing is that you are honest with yourself about what matters most to you and your business.
Applying Goals to Business
Once you have clarity on your purpose, the next step is to infuse it into everything you do. From how you market your business to your interactions with employees and customers, your purpose should be a guiding light. It should shape the decisions you make and the actions you take.
Virtual CFO Services Aligned to Your Mission
There are all sorts of reasons why businesses outsource CFO and contract CFO services. One of the most important is to help them find and embrace their purpose beyond profit. A CFO can offer valuable insights and advice on how to allocate resources to achieve long-term goals. They can also help businesses grow mission-driven finance.
Are you looking for a virtual CFO? Book a call with Profit Reimagined today. We know that you have a vision beyond profit, but you need your company to succeed too. The first thing we do is make sure we understand your purpose. That way, we can devise a financial strategy that aligns to your company's ethics.