Survival and Beyond: The True Purpose of Small Businesses

Thomas Eckschmidt cofounder of CBJourney - Conscious Business Journey and Conscious Capitalism Movement in Latin America, Coauthor of Conscious Capitalism Field Guide (Harvard Business Review?Press), TEDx speaker and Serial Entrepreneur.

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Starting a small business is like setting out on a high-stakes adventure. With the odds stacked against them, it’s no surprise that survival is often the ultimate goal for many startups. According to recent statistics, about 20% of new businesses fail within the first year, and nearly 50% shut down by their fifth year. These numbers paint a stark picture: the first year is a critical period for small businesses, requiring grit, determination, and strategic thinking.

The quest for survival is undoubtedly valid. After all, without making it past the initial hurdles, there’s no future to speak of. Financial stability, customer acquisition, and market presence form the triad of this initial battle. Yet, for a small business to truly thrive and create lasting impact, there must be a deeper meaning beyond mere survival.

The Urge to Survive

The statistics around startup failures are a sobering reality check. Market research, strong financial planning, and adaptability are key survival tools. Entrepreneurs often find themselves juggling multiple roles, facing unforeseen challenges, and making tough decisions to keep the business afloat. The immediate focus is on cash flow, managing costs, and ensuring the business doesn’t run out of steam. This survival mentality is essential but shouldn't overshadow the broader purpose of the enterprise.

Beyond Survival: Finding Meaning

While survival is necessary, businesses thrive when they have a clear cause beyond survival or beyond just staying afloat. This deeper meaning, or purpose, can take many forms. For some, it's about innovation and creating products or services that change people's lives. For others, it's about community, sustainability, or fostering a positive workplace culture.

Why Meaning Matters

Employee Engagement: A business with a clear purpose attracts passionate, motivated employees who are more likely to go the extra mile. When employees believe in what they are doing, they are more engaged and productive.

Suppliers’ commitment comes from their understanding where you are heading with a clear cause, they know how to contribute with ideas, products, service and even innovation.

Customer Loyalty: Customers today are looking for more than just products or services; they want to support businesses that align with their values. A meaningful purpose can differentiate a business in a crowded marketplace, building strong customer loyalty.

Resilience: Purpose-driven businesses are often more resilient. They can better navigate tough times because their mission serves as a guiding star, helping them stay focused and motivated.

Long-Term Success: Companies with a clear mission are more likely to make decisions that ensure long-term success rather than short-term gains. They invest in their people, communities, and sustainable practices. Ultimately, companies with a clear purpose can get their financial result tenfold above the market average performance (according to marketing gurus Sheth, Sisodia and Wolf).

Purpose in Action:

There are innumerous cases of success of purpose driven businesses. Consider Ben & Jerry’s, the iconic ice cream company. From the start, their mission wasn’t just about making great ice cream but also about social justice, environmental activism, and economic fairness. This deeper purpose has built a strong brand identity and customer loyalty that goes beyond their product offerings.

Another example is Warby Parker, the eyewear company. Their "Buy a Pair, Give a Pair" program has a profound social impact, providing glasses to those in need. This mission resonates deeply with customers and has been a key factor in their success.

Closing arguments:

Survival is the first battle for any small businesses, but to truly thrive, they must find a deeper cause that drives them. Businesses that balance financial performance with a meaningful purpose not only improve their chances of survival but also build a legacy that benefits their employees, customers, and the broader community. It’s not just about staying in the game; it’s about changing it for the better.

If you think survival is only a priority for small and medium organizations, you will be surprised that in this fast-changing business environment, survival is a continuous endeavor, having a clear cause will make the journey more engaging and fulfilling.

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