Why do businesses exist?

The simple answer to the question would be, to make profit. Businesses exist to make profit is a popular notion, but that doesn’t mean it’s true.

WhyDoWeExist

According to Ray Anderson, Founder of Interface Global, businesses exist for something higher and a nobler purpose than to make profit.

“For those who think business exists to make a profit, I suggest they think again. Business makes a profit to exist. Surely it must exist for some higher, nobler purpose than that.” Ray Anderson, founder of Interface.

There is no arguing to this statement. Think about the following scenario. A person next door is running a business and he is making way too much money that you decided to create a replica of the same business to make profit. Do you think you will be very successful? I don’t think so.

The person next door established his business for a reason, he has a higher purpose. This is why innovative people are excelling in the business world today. They are creating businesses which means something to the people around them. Businesses which are doing good to the people. In Sir Richard Branson’s terms, these innovative people are screwing business as usual.

Getting back to the question, there is no single or universal answer to the question why do businesses exist. But we know for sure that businesses doesn’t exist to make profit, but they make profit to exist.

One business is different from another and each of them have a different mission and a vision. Vision is more focused on the future whereas mission is a statement of why an organisation exist. Mission statements are much more simple, clear and they tend to change very rarely.

From the mission statement, we can identify why an organisation exist. For instance lets take a mission statement of a very successful business. “Make People Happy” used to be the mission statement of The Walt Disney Company. The company exist to make people happy, not to make profit. They make profit in order to make people happy (exist). Without profit they won’t be able to make people happy.

The answer to the question why do businesses exist differs from business to business just like the mission is different from business to business.

Leave a Reply

Your email address will not be published. Required fields are marked *