Last Updated on March 16, 2024 by Treana Wunsch
How to Write an Effective Business Plan: The Business Philosophy
In order to have a successful business, it is essential to have a strong business philosophy. It is based on the company’s core values and beliefs. It’s built upon the Mission Statement. It serves as a guide for decision-making and helps to keep the business on track. The business philosophy defines the business relationships with your employees, suppliers, customers, environment and community.
A well-defined business philosophy can help to improve clarity within the company. It provides a clear purpose and direction for the business, which can help employees to better understand their role within the organization. A strong sense of clarity can also lead to increased productivity and motivation.
It is also important for businesses to have a clear focus in order to be successful. A business philosophy can help with this by providing a set of guidelines to follow.
In this article, I’ll guide you through the process of writing a business philosophy that makes sense for your business. It’ll cover how to determine the key relationships in your business, the commitments your business plans to make to them and how to create action steps to follow through.
How to write it: Tips for crafting an effective business philosophy section
As mentioned above, the business philosophy is a declaration of the business commitments and how the business will take action to carry out those commitments. By using action statements, employees, partners, yourself and anyone who reads the business philosophy will know how the business plans to create and strengthen the business relationships.
An effective business philosophy section for a business plan can be the difference between success and failure. Here are some tips on how to craft an effective business philosophy section.
Identify Key Business Relationships
In order to have a successful business, it is important to identify key business relationships. There are many relationships that a business has, but some are more important than others. The three key relationships that every business should focus on are suppliers, customers, and employees.
Suppliers provide businesses with the materials they need to produce their products or services. A strong relationship with suppliers is important because it can lead to lower costs and better-quality materials. Customers are the people who purchase the business’s products or services.
A strong relationship with customers is important because it can lead to repeat business and referrals. Employees are the people who work for the business. A strong relationship with employees is important because it can lead to increased productivity and loyalty.
Format
Using a clear and concise format of commitment statements followed by action statements leaves little room for misinterpretation. This way of writing the business philosophy is simple and straightforward so that all who read them will understand what the commitments are and how you will be fulfilling them.
If there are business partners, these would be the most important relationship to nurture. Many people overlook how they will work with their partners. This can cause a lot of tension and conflict if there isn’t a commitment made to how you will deal with this.
An example of how you would write this in the business philosophy section would be:
ABC Company is committed to:
- creating transparent and collaborative relationships with its partners
We will do this by:
- always working as a team and communicating on a regular basis
Many businesses will have employees from day one. Employees are the lifeblood of any business. Aside from any partners, you may have, employees, are the most important business relationship a business will have. Many business owners and managers look at hiring employees the wrong way. A good leader always asks how they can serve their employees, not how their employees can serve them.
“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.
An example would be:
ABC Company is committed to:
- providing an empowering environment for its employees that welcomes their input and feedback
We will do this by:
- ensuring the business values and goals are clear
- encouraging communication
- having an open-door policy
- asking employees what their opinions are and taking them into consideration
If you are operating solo, employees obviously won’t be a relationship your business will have. The next most important business relationship is with the suppliers. ‘Suppliers’ covers a large variety of business relationships you may have. It can include, office supplies, inventory suppliers, cleaning supplies, subcontractors etc.
For example:
ABC Company is committed to:
- working with suppliers that share its core values and goals
We will do this by:
- communicating our goals with suppliers and ensuring they can meet those goals
- talking to references who have used the supplier
Aside from the main relationships, your business may want to focus on others such as the community or environment. Many people get into business solely to serve their community. Also, giving back to your community is rewarding and makes your community a better place to live. It can provide a sense of purpose which is something all humans need.
Here is an example:
ABC Company is committed to:
- giving back to our community
We will do this by:
- participating in fundraisers and donating to causes that we believe in
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3 businesses with inspiring philosophies
Jack Stack, CEO of SRC Holdings, believes that “the true measure of a company’s success is how it treats its employees.” This philosophy has guided SRC to become one of the “100 Best Companies to Work For” according to FORTUNE magazine.
Patagonia, an outdoor apparel company, follows the philosophy “Doing business without doing harm.” This means they are constantly striving to minimize their impact on the environment and working to improve the lives of their employees and customers.
The Body Shop, a cosmetics retailer, follows a philosophy of “Enrich not Exploit.” This means they strive to enrich the lives of their employees, consumers, and communities while also being environmentally responsible in their business practices.
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I hope with this information you are able to write the Business Philosophy section of your business plan. Up next…External Factors.
If you have questions, please comment below and I’ll be happy to answer them.
