When writing a business plan for your company, you’ll often notice that business plan templates or experts suggest you include a vision statement, a mission statement, and objectives. What are the differences between these three elements?
1. Objectives: The objectives of your business plan are the most important part. Spell out your goals; specify results and activities that can be easily tracked. Goals may include increasing monthly sales or profits to some specific number or by a specific percentage; decreasing costs or operating expenses to a specific number or percent; or finding a specific amount of new funding.
Objectives don’t have to be financial. You can set objectives for performance, customer satisfaction, and other key elements of success, as long as you define how they will be measured. For example, if your business wants to serve the best coffee on the block, add that it will be determined by a random survey of customers (or by some other method). “Being the best” is great, but it isn’t a business objective unless you can measure it.
2. Mission Statement: Next in importance comes the mission statement. A mission statement defines the long-term goals of your business in three ways:
- What does your company do for its customers? Think broadly about the benefits you offer. Starbucks, for example, offers a lot more than coffee, including a certain environment, an affordable luxury, or a meeting place.
- What does your company do for its employees? If you want employees to stay with your company, you need to provide meaningful work, useful feedback, training, benefits, and more.
- What do you want from your business? Your mission is probably to grow and produce profits, and your mission statement should say so.
Your business’s mission statement is more permanent than an objective in a business plan. It must be applied consistently over time. The mission statement serves as a reminder — to you, your employees, and your customers — of the main purpose of your business.
To avoid vague, fuzzy mission statements, review your statement for useless comparisons. Do your competitors do the same thing? Are your missions identical? Think about how your company is different, and use that to influence your mission.
3.Vision Statement: The vision statement is often confused with the mission statement. Some people use the two terms interchangeably. Actually, the vision statement is about what the business’s future will look like if the mission is achieved. Some say a vision statement imagines what success looks like.
Martin Luther King, Jr.’s “I Have a Dream” speech was a vision statement. So was John Lennon’s song “Imagine.” Visions are frequently related to social good, so they tend to be more important for nonprofit organizations.
Does your business plan need all three elements? Our advice is to include objectives and a mission statement in any standard business plan, and add a vision statement when and if you have a vision that adds substance and value to your plan.