How to Write a Five-Year Business Plan [2022 Guide]
Learn why the traditional way of writing a five-year business plan is often a waste of time and how to use a Lean Plan instead for smarter, easier strategic planning to establish your long-term vision.
In business, it can sometimes seem hard enough to predict what’s going to happen next month, let alone three or even five years from now. But, that doesn’t mean that you shouldn’t plan for the long term. After all, your vision for the future is what gets you out of bed in the morning and motivates your team. It’s those aspirations that drive you to keep innovating and figuring out how to grow.
What is a long-term plan?
A long-term or long-range business plan looks beyond the traditional 3-year planning window, focusing on what a business might look like 5 or even 10 years from now. A traditional 5-year business plan includes financial projections, business strategy, and roadmaps that stretch far into the future.
I’ll be honest with you, though—for most businesses, long-range business plans that stretch 5 and 10 years into the future are a waste of time. Anyone who’s seriously asking you for one doesn’t know what they’re doing and is wasting your time. Sorry if that offends some people, but it’s true.
However, there is still real value in looking at the long term. Just don’t invest the time in creating a lengthy version of your business plan with overly detailed metrics and milestones for the next five-plus years. No one knows the future and, more than likely, anything you write down now could be obsolete in the next year, next month, or even next week.
That’s where long-term strategic planning comes in. A long-term business plan like this is different from a traditional business plan in that it’s lighter on the details and more focused on your strategic direction. It has less focus on financial forecasting and a greater focus on the big picture.
Think of your long-term strategic plan as your aspirational vision for your business. It defines the ideal direction you’re aiming for but it’s not influencing your day-to-day or, potentially, even your monthly decision making.
Are long-term business plans a waste of time?
No one knows the future. We’re all just taking the information that we have available today and making our best guesses about the future. Sometimes trends in a market are pretty clear and your guesses will be well-founded. Other times, you’re trying to look around a corner and hoping that your intuition about what comes next is correct.
Now, I’m not saying that thinking about the future is a waste of time. Entrepreneurs are always thinking about the future. They have to have some degree of faith and certainty about what customers are going to want in the future. Successful entrepreneurs do actually predict the future — they know what customers are going to want and when they’re going to want it.
Entrepreneurship is unpredictable
Successful entrepreneurs are also often wrong. They make mistakes just like the rest of us. The difference between successful entrepreneurs and everyone else is that they don’t let mistakes slow them down. They learn from mistakes, adjust and try again. And again. And again. It’s not about being right all the time; it’s about having the perseverance to keep trying until you get it right. For example, James Dyson, inventor of the iconic vacuum cleaner, tried out 5,126 prototypes of his invention before he found a design that worked.
So, if thinking about the future isn’t a waste of time, why are 5-year business plans a waste of time? They’re a waste of time because they typically follow the same format as a traditional business plan, where you are asked to project sales, expenses, and cash flow 5 and 10 years into the future.
Let’s be real. Sales and expense projections that far into the future are just wild guesses, especially for startups and new businesses. They’re guaranteed to be wrong and can’t be used for anything. You can’t (and shouldn’t) make decisions based on these guesses. They’re just fantasy. You hope you achieve massive year-over-year growth in sales, but there’s no guarantee that’s going to happen. And, you shouldn’t make significant spending decisions today based on the hope of massive sales 10 years from now.
Why write a long-term business plan?
So, what is the purpose of outlining a long-term plan? Here are a few key reasons why it’s still valuable to consider the future of your business without getting bogged down by the details.
Showcase your vision for investors
First, and especially important if you are raising money from investors, is your vision. Investors will want to know not only where you plan on being in a year, but where the business will be in five years. Do you anticipate launching new products or services? Will you expand internationally? Or will you find new markets to grow into?
Set long-term goals for your business
Second, you’ll want to establish goals for yourself and your team. What kinds of high-level sales targets do you hope to achieve? How big is your company going to get overtime? These goals can be used to motivate your team and even help in the hiring process as you get up and running.
That said, you don’t want to overinvest in fleshing out all the details of a long-range plan. You don’t need to figure out exactly how your expansion will work years from now or exactly how much you’ll spend on office supplies five years from now. That’s really just a waste of time.
Instead, for long-range planning, think in broad terms. A good planning process means that you’re constantly revising and refining your business plan. You’ll add more specifics as you go, creating a detailed plan for the next 6-12 months and a broader, vague plan for the long term.
You have a long development time
Businesses with extremely long research and development timelines do make spending decisions now based on the hope of results years from now. For example, the pharmaceutical industry and medical device industry have to make these bets all the time. The R&D required to take a concept from idea to proven product with regulatory approval can take years for these industries, so long-range planning in these cases is a must. A handful of other industries also have similar development timelines, but these are the exceptions, not the rule.
Your business is well-established and predictable
Long-term, detailed planning can make more sense for businesses that are extremely well established and have long histories of consistent sales and expenses with predictable growth. But, even for those businesses, predictability means quite the opposite of stability. The chances that you’ll be disrupted in the marketplace by a new company, or the changing needs and desires of your customers, is extremely high. So, most likely, those long-range predictions of sales and profits are pretty useless.
What a 5-year plan should look like
With the exception of R&D-heavy businesses, most 5-year business plans should be more like vision statements than traditional business plans. They should explain your vision for the future, but skip the details of detailed sales projections and expense budgets.
Your vision for your business should explain the types of products and services that you hope to offer in the future and the types of customers that you hope to serve. Your plan should outline who you plan to serve now and how you plan to expand if you are successful.
This kind of future vision creates a strategic roadmap. It’s not a fully detailed plan with sales forecasts and expense budgets, but a plan for getting started and then growing over time to reach your final destination.
For example, here’s a short-form version of what a long-term plan for Nike might have looked like if one had been written in the 1960s:
Nike will start by developing high-end track shoes for elite athletes. We’ll start with a focus on the North West of the US, but expand nationally as we develop brand recognition among track and field athletes. We will use sponsored athletes to spread the word about the quality and performance of our shoes.
Once we have success in the track & field market segment, we believe that we will be able to successfully expand both beyond the US market and also branch out into other sports, with an initial focus on basketball.
Leadership and brand awareness in a sport such as basketball will enable us to cross over from the athlete market into the consumer market. This will lead to significant business growth in the consumer segment and allow for expansion into additional sports, fashion, and casual markets in addition to building a strong apparel brand.
Interestingly enough, Nike (to my knowledge) never wrote out a long-range business plan. They developed their plans as they grew, building the proverbial airplane as it took off.
But, if you have this kind of vision for your business, it’s useful to articulate it. Your employees will want to know what your vision is and your investors will want to know as well. They want to know that you, as an entrepreneur, are looking beyond tomorrow and into the future months and years ahead.
How to write a five-year business plan
Writing out your long-term vision for your business is a useful exercise. It can bring a sense of stability and solidify key performance indicators and broad milestones that drive your business.
Developing a long-range business plan is really just an extension of your regular business planning process. A typical business plan covers the next one to three years, documenting your target market, marketing strategy, and product or service offerings for that time period.
A five-year plan expands off of that initial strategy and discusses what your business might do in the years to come. However, as I’ve mentioned before, creating a fully detailed five-year business plan will be a waste of time.
Here’s a quick guide to writing a business plan that looks further into the future without wasting your time:
1. Develop your Lean Plan
As with all business planning, we recommend that you start with a lean business plan. A lean plan is a simple, one-page plan that outlines your core business strategy, target market, and business model. It gives a snapshot of what you’re hoping to achieve in the more immediate term.
A lean business plan is the foundation of all other planning because it’s the document that you’ll keep the most current. It’s also the easiest to update and share with business partners. A lean plan will typically highlight up to three years of revenue and profit goals as well as milestones that you hope to achieve in the near term.
Check out our guide to building your lean plan and download a free lean plan template to get started quickly.
2. Determine if you need a traditional business plan
Unlike a lean business plan, a traditional business plan is more detailed and is typically written in long-form prose. A traditional business plan is usually 10-20 pages long and contains details about your product or service, summaries of the market research that you’ve conducted, and details about your competition. Read our complete guide to writing a business plan .
Companies that write traditional business plans typically have a “business plan event” where a complete business plan is required. Business plan events are usually part of the fundraising process. During fundraising, lenders and investors may ask to see a detailed plan and it’s important to be ready if that request comes up.
But there are other good reasons to write a detailed business plan. A detailed plan forces you to think through the details of your business and how, exactly, you’re going to build your business. Detailed plans encourage you to think through your business strategy, your target market, and your competition carefully. A good business plan ensures that your strategy is complete and fleshed out, not just a collection of vague ideas.
A complete business plan is also a good foundation for a long-term business plan and I recommend that you expand your lean business plan into a complete business plan if you intend to create plans for more than three years into the future.
3. Develop long-term goals and growth targets
As you work on your business plan, you’ll need to think about where you want to be in 5+ years. A good exercise is to envision what your business will look like. How many employees will you have? How many locations will you serve? Will you introduce new products and services?
When you’ve envisioned where you want your business to be, it’s time to turn that vision into a set of goals that you’ll document in your business plan. Each section of your business plan will be expanded to highlight where you want to be in the future. For example, in your target market section, you will start by describing your initial target market. Then you’ll proceed to describe the markets that you hope to reach in 3-5 years.
To accompany your long-term goals, you’ll also need to establish revenue targets that you think you’ll need to meet to achieve your goals. It’s important to also think about the expenses you’re going to incur in order to grow your business.
For long-range planning, I recommend thinking about your expenses in broad buckets such as “marketing” and “product development” without getting bogged down in too much detail. Think about what percentage of your sales you’ll spend on each of these broad buckets. For example, marketing spending might be 20% of sales.
4. Develop a 3-5 year strategic plan
Your goals and growth targets are “what” you want to achieve. Your strategy is “how” you’re going to achieve it.
Use your business plan to document your strategy for growth. You might be expanding your product offering, expanding your market, or some combination of the two. You’ll need to think about exactly how this process will happen over the next 3-5 years.
A good way to document your strategy is to use milestones. These are interim goals that you’ll set to mark your progress along the way to your larger goal. For example, you may have a goal to expand your business nationally from your initial regional presence. You probably won’t expand across the country all at once, though. Most likely, you’ll expand into certain regions one at a time and grow to have a national presence over time. Your strategy will be the order of the regions that you plan on expanding into and why you pick certain regions over others.
Your 3-5 year strategy may also include what’s called an “exit strategy”. This part of a business plan is often required if you’re raising money from investors. They’ll want to know how they’ll eventually get their money back. An “exit” can be the sale of your business or potentially going public. A typical exit strategy will identify potential acquirers for your business and will show that you’ve thought about how your business might be an attractive purchase.
5. Tie your long-term plan to your lean plan
As your business grows, you can use your long-term business plan as your north star. Your guide for where you want to end up. Use those goals to steer your business in the right direction, making small course corrections as you need to.
You’ll reflect those smaller course corrections in your lean plan. Because your lean plan is a simple document and looks at the shorter term, it’s easier to update. The best way to do this is to set aside a small amount of time to review your plan once a month. You’ll review your financial forecast, your milestones, and your overall strategy. If things need to change, you can make those adjustments. Nothing ever goes exactly to plan, so it’s OK to make corrections as you go.
You may find that your long-term plan may also need corrections as you grow your business. You may learn things about your market that change your initial assumptions and impacts your long-range plan. This is perfectly normal. Once a quarter or so, zoom out and review your long-range plan. If you need to make corrections to your strategy and goals, that’s fine. Just keep your plan alive so that it gives you the guidance that you need over time.
Vision setting is the purpose of long-term planning
Part of what makes entrepreneurs special is that they have a vision. They have dreams for where they want their business to go. A 5-year business plan should be about documenting that vision for the future and how your business will capitalize on that vision.
So, if someone asks you for your 5-year business plan. Don’t scramble to put together a sales forecast and budget for 5 years from now. Your best guess today will be obsolete tomorrow. Instead, focus on your vision and communicate that.
Explain where you think your business is going and what you think the market is going to be like 5 years from now. Explain what you think customers are going to want and where trends are headed and how you’re going to be there to sell the solution to the problems that exist in 5 and 10 years. Just skip the invented forecasts and fantasy budgets.
If you’re looking for a better way to explore your business’s future, you may want to check out LivePlan . LivePlan makes it easy to build and update your strategic Lean Plan, set milestones, and connect them to your financial statements. You can better plan for the future by exploring potential scenarios and easily update forecasts based on actual performance. Explore how LivePlan can help you more effectively manage your business while connecting your short-term plans to your long-term vision
Noah Parsons
Noah is currently the COO at Palo Alto Software, makers of the online business plan app LivePlan. You can follow Noah on Twitter .
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How To Write A Business Plan (2023 Guide)
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Updated: Aug 20, 2022, 2:21am
Table of Contents
Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.
Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.
Drafting the Summary
An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.
Ask for Help
When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.
After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business.
The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.
Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.
Numbers-based Goals
Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.
Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.
Intangible Goals
Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.
The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.
If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.
This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.
You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.
Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.
Business Operations Costs
Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.
Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.
Other Costs
Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.
Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.
How do I write a simple business plan?
When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.
What are some common mistakes in a business plan?
The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.
What basic items should be included in a business plan?
When writing out a business plan, you want to make sure that you cover everything related to your concept for the business, an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.
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[Updated 2023] How to Write a Five Year Business Plan (Best Templates Included)
![[Updated 2023] How to Write a Five Year Business Plan (Best Templates Included)](https://www.slideteam.net/wp/wp-content/uploads/2021/10/Five-Year-Business-Plan-PowerPoint-Presentation-Templates-1-1013x441.jpg "how to write a 5 year strategic business plan")
Smriti Srivastava
Achieving a set of goals is challenging.
Maintaining the motivation and productivity to achieve business goals is even harder.
In the words of Yogi Berra, a big-league baseball player-turned-manager, “Without a plan, even the most brilliant business can get lost. You need to have goals, create milestones, and have a strategy in place to set yourself up for success.”
This is why everyone in the industry — from an interviewer looking to hire top talent to an entrepreneur who accomplishes goals systematically — splits their business plan into five years. A five-year business plan not only extends a generous period to attain the set targets but at the same time keeps everyone on their toes, removing procrastination.
But writing a five-year business plan can get tedious, messy, and, sometimes, take forever to hit the right spot.
Therefore, this blog will cover the essential steps to help you write a tremendous five-year business plan.
Chronology of writing a spectacular five-year business plan
It is quite simple. You cannot achieve something great when you don’t know your priorities, objectives, ways, and timeframe to achieve those targets. It is essential to build a five-year plan for your business as well as the outcomes and expectations related to it.
But where do you start?
Here are the five sections you must include in your plan:
#1 A clear company introduction
A brief yet effective overview of your business, its market, team structure, roles and responsibilities, company offerings, and value proposition builds the foundation for your future endeavors. You use a company overview to set the right tone at the beginning of your business plan, as it serves as the base and a direction for your audience.
Related read: How to Create an Attention-Grabbing Company Introduction Slide in 10 Minutes
#2 vision and mission statement.
You have to ensure your employees, stakeholders, investors, and potential clients understand what your company is all about and what you stand for. Your vision and mission statement helps you with it. It enlightens the audience about your future plans - where you see your company in five years and the results you will work to achieve.
Related read: Top 10 Mission and Vision Statement Templates to Guide Your Organizational Culture
#3 target market and branding.
State who your company is looking to serve and why. Provide clarity on your target market based on psychographics and demographics. And do not forget to mention the size of your target market. You have to create a framework for making your brand visible exponentially and simultaneously create a lead generation and conversion strategy.
Related read: Top 30 PowerPoint Templates to Analyze Dominant Market Drivers
#4 product overview.
Set clear priorities based on the distinction between your primary and secondary products. You need to connect your branding around the product or service core to your company. This categorization will help you establish the revenue your products generate and the impacts they create. Further, it will help modify your plans accordingly.
Related read: Top 10 One-Page Product Overview PowerPoint Templates to Drive Sales
#5 swot analysis.
Measuring your strengths, weaknesses, opportunities, and threats in the industry can help you successfully dominate the market. Therefore, your five-year business plan must include regular and timely analysis of all your business operations. There is no better way to meet targets than keeping a check on one’s activities. It will help you focus on the proprietary system of your company.
Related read: Top 50 SWOT Analysis PowerPoint Templates Used by Professionals Worldwide
Templates to nail your business plan.
Often we have countless ideas to plan our way to a successful business. But as the day-to-day grind starts, it is easy to get distracted from the end goal and stray from the path leading to our intent. We look for a north star to point us directly to our mission. So we decided to make your life a bit easier by providing our readymade and editable five-year business plan templates. You can access them below. Dive in!
Template 1: Five Year Business Plan Roadmap Template
Help your team stay on track with your future business ambitions by taking the assistance of our invigorating PowerPoint template. This content-ready template helps you visualize your work plan and present your vision impactfully. You just need to click the download link to start customizing it.
Download this template
Template 2: Key Poniters for Five Year Business Plan
Use this business plan template that includes vital pointers such as setting clear goals and objectives, conducting market research and competitor analysis, developing a comprehensive marketing strategy, creating financial projections, and establishing a system for measuring progress and adjusting your plan accordingly. By following a structured template and considering these essential elements, you can create a plan that sets your organization up for long-term success.
Template 3: Five Year Roadmap Timeline for Business Plan
Employ this professionally curated template to improve the success rate of your business. This template helps you track the progress of all your operational activities without any hassle. Also, our color-coded template makes it easy to comprehend and follow. So download this adaptable template to start adding your data effortlessly.
Template 4: Five-Year Business Plan Roadmap with Operations and Functions
You can utilize this template to articulate the workflow of your organization smoothly. This template allows you to write an attractive executive summary of your business operations and functions. Download the template and start assembling your key milestones immediately. Click the link below!
Template 5: Five Year Milestones Template
Outline the timeline for achieving future goals with the help of this template. Our experts have designed this PowerPoint template to help you summarize your vision, mission, targets, and timeframe in an easily accessible format. Grasp the attention of your employees and stakeholders right away by downloading this template.
Template 6: Five-Year Roadmap for Business Planning
A comprehensive plan of action displays confidence and foresightedness. Therefore, we have curated this content-specific template to help you create a strategic roadmap for your business goals. This template distributes the target phases based on yearly milestones, thereby making it easily understandable. Grab it now!
Template 7: Five Year Business Plan with Roadmap
Take your business to the next level with this five-year business roadmap with checkpoints. It includes sections for sales, product, operations, and targets set for different team members. It also includes timelines and checkpoints for processes and activities. Download this editable PowerPoint Slide now to streamline your business alignment.
Template 8: Five Year Business Plan With Financial Projection
Make your future financial outcomes expectations loud and clear by using this PowerPoint template. Represent your business planning elements creatively by employing this template. You can even highlight your company’s ongoing functions and practices in a structured way with the assistance of our entirely adaptable PPT template.
Template 9: Five Year Business Plan Implementation Roadmap
The success rate of business plans hugely depends on the plan of action, and this editable five years roadmap of the organization rightly serves the purpose. Encapsulate all the information related to the project in a well-structured manner to obtain maximum efficiency by incorporating this stunning PowerPoint slide. State the critical deliverable, steps involved, time frame, workforce allocation, and lots more in an easy-to-understand manner by utilizing this pre-designed roadmap layout. Download now!
Template 10: Five Year Business Plan with Risk Status
Select this PowerPoint template to predict your future growth. Using this PPT template, you can assess potential risks that can stunt your business development in the coming years. Revamp your venture by utilizing this template as a guiding star. Download it and start with your strategic planning right away!
Having a strategic roadmap for handling your business operations and objectives is the only way to go. You cannot expect high profit and returns on investment without having a clear outline for the next five years of your business. With our stunning templates, you will definitely look confident, assertive, reliable, and foresighted.
FAQs on Five-Year Business Plan
How to write a five year business plan.
Here are some key steps to consider when writing your plan:
Define your mission and vision: Start by articulating your organization's purpose and long-term goals.
Conduct market research : Analyze your industry, identify trends, and understand your target audience.
Evaluate your competition: Analyze your competitors' strengths and weaknesses, and determine how you can differentiate yourself in the marketplace.
Develop a marketing and sales strategy: Outline how you will reach and engage with your target audience and define your pricing strategy.
Create financial projections: Develop a comprehensive financial model that includes revenue and expense projections, as well as cash flow analysis.
Establish a system for measuring progress: Determine key performance indicators (KPIs) that will help you track progress towards your goals, and create a plan for reviewing and updating your plan on a regular basis.
What is a good 5-year business plan?
A good 5-year business plan is a comprehensive document that outlines an organization's strategy for achieving its long-term goals. Here are some key elements to include in a good 5-year business plan:
Executive summary: Provide an overview of your organization's mission, vision, and goals, as well as a summary of the key elements of your plan.
Market analysis: Conduct thorough research to understand your industry, target audience, and competition.
Marketing and sales strategy: Outline how you will reach and engage with your target audience, and define your pricing strategy.
Financial projections: Develop a comprehensive financial model that includes revenue and expense projections, as well as cash flow analysis.
Organizational structure: Outline the roles and responsibilities of key personnel, and describe how your organization will be structured to achieve its goals.
Risk management: Identify potential risks and develop strategies to mitigate them.
Performance metrics: Determine key performance indicators (KPIs) that will help you track progress towards your goals, and create a plan for reviewing and updating your plan on a regular basis.
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How Do I Write a 5-Year Strategic Plan?
- Small Business
- Business Planning & Strategy
- Strategic Planning
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As a business owner, you need a well-thought out business plan to help you run your business. Without such a plan, you run the risk of running around in ways that have little to do with generating results. You can end up "spinning your wheels," which suggests that you're busy but not productive. A five-year strategic plan describes where you are now and how you plan to achieve your goals over a five-year period.
When writing your plan, include subheads that are specific to your goals, a mission and vision statement, SWOT analysis and key performance indicators.
Lead with an Executive Summary
First, start with an executive summary. This is key because the executive summary should encapsulate – or summarize – the key concepts explained in the plan's other sections. The executive summary is usually written after you have completed the other sections, but it appears at the top of your strategic plan. This enables you to extract key points from the other sections, which you will include in your summary.
The executive summary gives bust readers an overview of what the strategic plan contains, so they can select the topics that matter to them the most. The topics discussed in the executive summary are elaborated on more fully in the sections of your strategic plan.
Mission Statements and Vision Statements
The mission statement is a concise summary of the overall objective of a business, and it states what the business hopes to achieve. Although the mission statement isn't very long, take the time to ensure that it states clearly what your company is about, and why your company exists.
For example, according to a January, 2018 article from Investopedia, Apple's mission statement is the following: "Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone, with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad."
A vision statement defines where the company wants to be in the future. Using a five-year strategic plan as an example, the vision defines the company success over five years. An example of a vision statement for an accountant's office could be: " To become the number one accounting resource for medical professionals in the metro area."
Conduct a SWOT Analysis
SWOT is an acronym that stands for Strengths , Weaknesses , Opportunities and Threats. Take an honest assessment of what your company and key team leaders are great at doing, and of what they need to improve upon. Look for opportunities in the market, and examine any threats that might prevent you from achieving your goal.
A SWOT analysis helps identify areas that a business owner might take strategic actions on. For example, a business owner who determines that his weakness is in organizational skills, should hire someone who is strong in this area, so that he negates the weakness.
List the Company's Strategic Goals
Strategic goals look at specific ways to accomplish something. For example, a company that wants to improve viable prospects might set goals for online ad funnels, networking activities or referral programs. It is important to review the goals and exactly how each potential solution might be able to achieve the goals. If networking provides fewer leads that have higher closing ratios compared to ad funnels, business owners need to evaluate the data and determine the next step toward success.
A strategy might involve more than one strategic action, varying budgets and personnel resource dedication. Strategic goals over five years involve a series of smaller goals and action plans. Start with the five-year goal and work backward to establish achievable goals over shorter time periods, such as one-year goals.
How Will You Measure Success?
Business owners need to measure success, and they need to examine the goals and establish key performance indicators (KPI). Just as the goals are broken down into smaller achievements and action plans, KPIs need to start with the end result and work backward.
For example, a KPI for social media ads might evaluate how much is spent during a specific time period. A KPI also considers what the online ad open rate is compared to the ultimate sales conversion rate. An ad that's opened but doesn't convert suggests that something's wrong with the ad. An ad that converts on one platform, but not on another, suggests that the demographic is better targeted toward one platform and not in the other.
Business owners should use KPI data to scale up their successful strategies and to put more resources over a five-year period toward the most profitable strategies.
- University of Kansas: Section 4. Developing Successful Strategies: Planning to Win
- Forbes: Strategic Plan Template: What To Include In Yours
- Investopedia: What is Apple's current mission statement and how does it differ from Steve Jobs' original ideals? Read more: What is Apple's current mission statement and how does it differ from Steve Job's original ideals?
- The strategic plan is not set in stone. As the business grows, goals can change, which could ultimately change the mission and objective of the business. If this occurs, the strategic plan should be adjusted.
- Be as thorough as possible when creating the strategic plan.
- If the strategic plan is for an established business, use the business's previous activity as a starting point. Ignoring prior business activities could mask issues the business has that could possibly be corrected with the plan.
With more than 15 years of small business ownership including owning a State Farm agency in Southern California, Kimberlee understands the needs of business owners first hand. When not writing, Kimberlee enjoys chasing waterfalls with her son in Hawaii.
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A five-year business plan is a strategic roadmap to help businesses better achieve long-term goals, such as obtaining investments or producing a certain amount of revenue. These plans often include details that help illustrate the specific goals of a business and how they plan to achieve those goals.
A typical business plan covers the next one to three years, documenting your target market, marketing strategy, and product or service offerings for that time period. A five-year plan expands off of that initial strategy and discusses what your business might do in the years to come.
Create a Company Description Brainstorm Your Business Goals Describe Your Services or Products Conduct Market Research Create Financial Plans Bottom Line Frequently Asked Questions Show more...
Here are the five sections you must include in your plan: #1 A clear company introduction A brief yet effective overview of your business, its market, team structure, roles and responsibilities, company offerings, and value proposition builds the foundation for your future endeavors.
An annual strategic business plan should include 8 key sections. Follow these steps to write an effective annual strategic business plan: State information that defines the company. Perform a SWOT analysis. Identify business goals. Identify key performance indicators. Perform and summarize market research. Outline the business marketing plan.
A five-year strategic plan describes where you are now and how you plan to achieve your goals over a five-year period. Tip When writing your plan, include subheads that are specific...