Developing a Mission Statement
There are two ways to react when you hear the words MISSION STATEMENT…..the first is to do what I did and become an African history major. If the temptation of retail management is not alluring, you will be forced to think about developing a mission statement. Please do not steal from Tom Cruise and entitle your mission statement “The Things We Think and Do Not Say.” Let’s say it together now, “SHOW ME THE MONEY.” Now that we have that out of our system, we can move on. You MUST not only think about your mission statement, but you must understand what a mission statement is and detail it in writing. While this might sound easy enough, “I want pretty cookies; I am going to kill myself trying to enroll in Cupcake Wars and figure out how Clorox Bleach can be used as their mystery ingredient; I want to feed one person at a time and make the world a better place; and so on.” Please keep in mind that you are not in a beauty pageant and you are no longer meeting at the YMCA for your “baking hobby,” but you have determined that you have a business. This is “your diet starts today.” Please keep in mind when reading this posting that I am not going to use the depth necessary that you will have to use when you actually compose your business plan. Additionally, just because you started without a business plan, does not mean that you don’t need to write one now. Without a business plan, you will have no way to evaluate the day to day opportunities for potential business that knock on your door. The first question is always “where do I begin?” There are three questions that are essential to all business plans.
Let’s start with the three key questions. 1) What are the opportunities or needs that exist that you need to address? (the purpose of your venture). 2) What are you doing to address these needs? (the business of the venture); and 3) What principles or beliefs guide your work? (the values of the venture). Your purpose is as simple as it sounds. Everything else is in place to help you accomplish your mission. The clarity that you use here is important, because all your goals, actions you take and the way you spend your time will be guided by this statement. For those of you who are still awake, we can now begin.
Answering the following questions will help you when developing a mission statement for your business:
1) What are the opportunities or needs that you exist to address. You need to focus on the fact that baking is an opportunity. A niche has been created through television shows such as “Ace of Cakes,” “Cupcake Wars, etc.” for custom cakes, cupcakes and cookies. The reality is that this niche started long before our favorite television show, as cakes became more and more elegant. We have long since graduated from my personal favorite, “the yellow iced smiley faced cookie with the brown features.” Now that you have identified the opportunity: that there is a potential market for customized cakes and cookies. Are you done? No. You will need to identify what is the scope of the opportunity? Is there an opportunity in town for a local brick and mortar bakery and do you want to fill it? Is there an opportunity for a wholesaler? Do I want to be a wholesaler? Does your state allow for a home based bakery and would this fit your situation better? There are additional factors that we are not going to cover such as potential staffing concerns, insurance and other factors that should be considered if you are going to open a facility. There are many other steps that you would have to take to properly identify what the opportunity is as you are writing a business plan. You may also engage in a demographic study to determine the saturation point based upon demographics and market participants, but this is also outside the scope of both this post as well as a standard business plan. You can now look to how you are going to address these needs. Are you going to limit your reach locally or nationally?
2) What are you doing to address these needs? There are obvious steps that many have taken.
You can incorporate or organize my business using whatever structure is recommended by my attorney, my accountant, or the check-out girl at the local supermarket. You will go out and have business cards printed. Here is where it gets tricky, “do you pay for a website or utilize Facebook and social media?” I would recommend a website. If you are truly trying to launch a business, you need a landing page. It is difficult to find businesses through web based searches without a landing page. Also, as you engage in social media to get word of your endeavor out, you want to have a centralized page that links to all of your social media. There are always local opportunities that will present themselves for advertising. The caveat here would be whether you are going to be a brick and mortar store or a home based business utilizing the internet. If you are a local brick and mortar store, local advertising will probably have more value than if you are a home based business. Social media is a key and many people outsource their social media, but I cannot stress enough that if you don’t learn every step of your business, even the steps you have relegated to employees or third parties, your business will fail. A business owner needs to know every aspect of their business. You will need to learn unit pricing for ingredients and whether it is more cost effective to buy locally or online. You will need to assess labor cost, including your own, and determine the cost of goods sold. You will have to determine your profit margin and what you need to make on each good sold. You need to be cognizant of what you are doing to address the opportunity with your business, while keeping in mind that if you are not making any money “YOU WERE WRONG. THERE WAS NO OPPORTUNITY IN YOUR MARKET.” If you have determined that there is not only an opportunity, but there is a way to address the opportunity in terms of creating a business, you can now move on to step three.
3) What principles or beliefs guide your work? With the proliferation of the internet, people can shop online for baked goods and have them sent directly to your home. Is this enough? No. You now have to identify specifics such as “will I use only organics, will I be known as a local sourcer of ingredients, am I going to focus on local opportunities or national, and so forth.” This is where your values will help you determine not only the potential opportunity, but whether it matches who you are. Please do not misunderstand, your values will not control every aspect of your business, but it will establish who you are as a business. You have to keep to your overall principles not only in terms of how you run your business but also in evaluating potential clients or opportunities in the course and scope of your daily operations. If you have identified that you want to be a niche bakery, don’t buy out the local bakery who operates in a ten thousand square foot space just because it is a cash cow and will put you on the map. If you are not a wholesaler, don’t take the opportunity to be the wholesaler for the local supermarket chain. YOU MUST STICK to your principles. You might as why is this important? I would advise you to look at several companies that are no longer in business because they changed their core principles, such as Circuit City.
As I stated in the beginning, this posting is not to be an exhaustive exercise in how to write a business plan as much as identifying the three key questions to get you started on your way. If you care enough about starting a business, you have to care enough to protect your investment of time, money and energy. This starts with a business plan. If this is not for you, join me with a liberal arts degree and we can co-manage a retail store together.
Did you miss the first blog post? No worries. Here is the link: Building Block Number 1
Have questions? Feel free to leave a blog comment. My husband would love to help answer your questions about building a solid foundation for your business.