A business purpose statement is an essential part of forming a new business. In some states, it is even a legally required aspect of your business filing. Whether mandatory or not, having a business purpose statement can help you to identify your mission, define your goals and ultimately find the success you crave.


Writing a business purpose statement comes down to answering one important question: why is your company in business?

What Does Business Purpose Mean?

Business purpose differs from mission or vision in that it illustrates the organization’s impact on customers. The purpose of your company is to provide a certain service or product to your clients. The statement of purpose should, therefore, illustrate how you will improve the lives of those you serve. Not only is a business purpose statement a good thing to have, but it can also provide a competitive advantage over companies without such a statement. Also, the purpose can be used as a guide to dictate company actions. If a certain decision does not align with the business’s statement of purpose, it shouldn’t be acted on.

How to Write a Business Purpose Statement

To write a business purpose statement, you need to be able to answer one important question: why is your company in business? If you are forming an LLC, it is required by law that you provide a statement of purpose. For many other business structures, it is still advisable that you have a documented statement of this kind, whether required or not.

A business purpose statement should be short, at just one to a few sentences. While it should be specific to the type of work you plan to do, you should also leave some room for ambiguity to provide your company room to grow and develop over time. Depending on your jurisdiction, statements that are too vague may not be accepted for business filing purposes.

Vision vs. Mission vs. Purpose

Mission, vision, purpose what’s the difference? Your mission statement should define your company’s objective and its approach to reach these goals. Vision, on the other hand, describes your business’s goals for the future and outlines how you will get there. Meanwhile, a statement of purpose explains the type of work you do and how it will benefit your customers. These distinctions are minor, but it’s important to have a clearly defined vision, mission and purpose as a business owner.

How to Write a Business Mission Statement

To write an effective business mission statement, you must be able to articulate your company’s strategy. A mission statement should concisely answer four questions, as follows:

  • What does my company do? 
  • How do we do it? 
  • Who do we provide this service for? 
  • What value do we provide? 

Even if you are a solo entrepreneur or run a small, seemingly self-explanatory business, you should develop a mission statement to provide a framework for running your company.