What Is a Purpose Statement?

A purpose statement, also known as a position statement, defines the purpose of the company through its brand, products, and services that affect the lives of consumers. The target audience that the purpose statement covers include its clients, customers, consumers, patients, parents, and any other group that the company interacts with and directly affects outside of the company. These statements are very common in different industries that cater to the public, including food, tourism, services, and all others. The purpose statement often goes hand-in-hand with the mission statement, values statement, and vision statement of a company. A company utilizes the combination of these statements to develop its identity, including its internal culture, core values, and ideals. It also helps the company to devise a process it must implement toward reaching its full potential. While the combination of all these statements helps the company to define the process, policy, and procedure of company operations, it is the purpose statement that explicitly focuses on the value of the company towards its employees and audiences. The purpose statement guides the company through the morals, values, ethics, beliefs, and other things that inspire a company to make its mark and make a difference. It is a clear and concise explanation of the purpose and the reason behind establishing the business.

According to a McKinsey & Company survey comprising more than one thousand representatives from United States companies, around 82 percent of respondents affirms the significance of having a purpose. However, the survey shows that 42 percent of representatives who report the purpose statement of their companies do not feel its effectiveness.

Importance of Having a Purpose Statement

A purpose statement is essential to a company because it helps define the personality and identity of the organization. Knowing this is beneficial to employees and customers to help them remember what the company stands for and wishes to accomplish in the future. As such, there are different benefits of establishing a purpose statement for an organization. The section below covers the various reasons why a company must develop its purpose statement.

Increases employee motivation: When the employees understand the reason behind the drive of a business and how the customers benefit from the products and services they produce because they possess a better understanding of their roles and responsibilities in helping the company to realize its purpose. As such, it helps employees and workers to realize their significance in the growth of the organization, increasing employee motivation in all facets and departments, especially among those employees who aim to make a difference and care about the job they do for the customers.Helps the company to reach its goals: A company becomes better able to meet its organizational goals and objectives when there is a clear purpose statement that helps drive the business forward. All employees in the organization, from the executive down to the field workers, both old and new, have a clear distinction of the direction that the company goes and that all their work contributes to the growth of the organization. When every single member of the company operates under a similar purpose, it produces a fully functional and operational business where goals are the driving force behind each action. These SMART goals that the company wishes to accomplish stem from a clear understanding of the purpose statement.Establishes employee loyalty: Working employees show their appreciation toward a company that makes them feel they are valuable and necessary to the organizational workforce. Communicating with workers using a strong and impactful purpose statement enhances this feeling in employees. It makes them feel that they are essential members of a team working towards a common goal. Together with the value statement, the purpose statement allows employees to operate and perform using the core values of the company and to feel good about the work they are doing, knowing that it influences the overall growth of the organization. Distinguishes itself from its competitors: A purpose statement sets a company apart from its competitors by defining and pinpointing its unique characteristics to the consumer market. When employees and consumers see perceive that an organization distinguishes itself from the competition, the brand identity of a company strengthens. The purpose statement makes customers choose the company instead of its competitors because it highlights what the company does best. It tells individuals the changes that the business wants to implement through its actions, making customers choose the company over others. People get genuine inspiration from the company if it showcases a solid purpose. Fosters clear communication: When an organization already has the needs of its customers in mind, it can effectively communicate its ideas, programs, products, and services through external means and tailor promotional events and advertisement activities that speak about these needs.Helps to fill the niche: The purpose statement helps a company claim a niche in the marketplace, especially when there is a significant contrast between the products and services of competitors that are similar to the business. The statement also aids in directing the energy and passion of employees toward an organizational mission that leads to attracting customers who have aspirations and needs resonating with the purpose of the company. Gives employees a sense of clarity: If employees identify with and refer to a clearly articulated statement from the company regarding what they need to produce and who they need to produce it for, they can focus more on the work that they need to accomplish to get the results that align with the company purpose and the needs of the consumers. Having a clear commitment to customers and ensuring customer satisfaction contributes to the overall well-being and sense of responsibility that employees work with and the core values they implement in their job.

How to Develop an Effective Purpose Statement for a Business

The purpose statement serves as an introduction of the company to its consumers and employees, demonstrating what the company does best. It serves as a constant reminder for people about the changes that the organization wants to apply through its actions plans, making individuals choose the company over its competitors. Writing a purpose statement is not always an easy task. The growth of the organization depends on a purpose statement, and it is advisable to make the statement as clear, concise, and achievable as possible. The section below provides a helpful step-by-step guide to aid you in creating the purpose statement for your business.

  • 1. Develop a Purpose Statement Committee

    When creating the purpose statement for the business, teamwork activities are essential. The more people working together to establish the purpose statement is better. All the people in the organization can contribute to formulating the purpose statement since they know the organizational and departmental structure, strengths, and weaknesses. To create a strong and accurate purpose statement for the organization, consider the formation of a committee with employees from various departments of the organization to incorporate a wide range of perspectives into the purpose statement. Encourage all the members of the committee to share different ideas, opinions, and insights when brainstorming to ensure that many and different voices have representation in the final statement.

  • 2. Determine the Essence of the Purpose Statement

    A purpose statement is a sentence that reminds the company what it needs to do for its audience. For the organization to figure this out as accurately as possible, it is vital to ask why the owners decided to create the organization. If the company offers its consumer market and the marketplace with products or services, brainstorm why the company is beneficial for the audience to receive these goods and services and why the company is unique in the marketplace it is currently serving.

  • 3. Define the Audience, Products, and Services the Company Offers

    There must be a clear understanding of who or what the company serves when developing the purpose statement. Remember that the purpose statement caters to the customers that will benefit from the products and services that the company offers. Determine their goals, aspirations, needs, wants, hobbies, interests, and the challenges they face, especially with using similar products and services, to determine how the organization can alleviate more customers from experiencing similar problems. All workers and employees are well-aware of the various products and services the company offers to the marketplace. Make sure to contemplate the unique functions of products and services, pinpoint the customer problems they solve and classify alternate uses of these offerings.

  • 4. Take a Look At Your Competitors

    Take a look outside the organization and take the time to conduct research studies about competitors and evaluate their processes and procedures. Identify the activities they excel at and determine where they lack. Competitive analysis is very vital in different industries. Make sure that the purpose statement highlights the unique qualities of the company, making it stand out from its competitors. Think about the most applicable and essential keywords that are vital to the business, and incorporate them into the purpose statement. Associating these words in the purpose statement motivates, inspires, and celebrates the uniqueness of the company.

  • 5. Ask Customers, Stakeholders, and Other Employees For Feedback

    Despite establishing a purpose statement committee at the very beginning, customers can provide accurate feedback about products and services that the company offers since they use and purchase them. Ask them why they chose the product and services the company offers instead of others and what they like about the organization. To acquire customer feedback, conduct surveys, and deliver questionnaires. It is also necessary to ask company stakeholders and other employers for additional information.

  • 6. Finalize and Draft the Purpose Statement

    After acquiring all the necessary information, compile the feedback, and focus on what the company wants to project and provide to the target audience. After, construct the purpose statement and distribute them to all employees for them to understand the sole goal and focus of the organization.


How do you write a good purpose statement?

There are different elements that a purpose statement must possess. It must be specific, precise, concise, clear, and goal-0riented.

What are the three parts of a purpose statement in a research study?

The three parts of a purpose statement in research studies include the motivation driving the research paper, the significance of the research, and the research question that the researcher needs to address.

How do you create a purpose for the company?

The purpose of the company serves as its identity for its consumers. When deciding, look at the essence of the company, define the values and activities around the purpose, build a practical and inspiring purpose, and develop a core purpose statement.

The purpose of the company serves as its identity for its consumers. An organization must have an identity that calls out to its consumers, keeping in mind their needs, wants, hobbies, interests, and challenges, converting them into a purpose statement that resonates with its customers, partners, and employees. It is necessary to develop a purpose statement that translates to positively affecting the lives of consumers purchasing services and products from the company. Create an effective purpose statement by downloading from the 20+ SAMPLE Purpose Statement in PDF | MS Word from Sample.net.