To run and grow a successful business, planning is crucial.
A typical business plan covers the next one to three years and details your target audience, marketing strategy, and products or services for that time period. A five-year business plan expands on this premise, and predicts what your business might do in the next five years.
Learning how to write an effective five-year business plan helps you manage, and optimize your business operations for the better. Without a firm business plan, you risk straying from your intended course.
Establishing a long-term plan determines your business’s priorities and aspirations, including several important milestones. A long-term business ensures you are improving business time management skills.
To get cracking with developing your ideal five-year business plan, follow this simple guide to success.
Why Create a 5-Year Business Plan?
Suppose you implement a robust five-year business plan at some point in your business’s lifetime. In that case, it will provide valuable insight into how your business is likely to fare over the coming years.
In addition to long-term business insights, your business plan helps with:
An important part of your business plan is thorough market research, and measuring what your competitors are doing. Conducting this analysis allows you to make strategic decisions about moving your business forward.
The creation of your five-year business plan solidifies the ideas you have for your business, and what you need in place to see those ideas come to fruition.
If you can envision future collaboration opportunities, your five-year business plan is a great resource for other companies to learn about your business, and decide if they want to go into partnership with you.
A strategic five-year business plan helps you encourage data-driven business growth in the long-term, and assists with decisions about the company’s future. Businesses that create long-term business plans are good at strategic thinking and prepared for potential obstacles their companies may face.
What Should a 5-Year Business Plan Include?
A traditional five-year business plan should include business strategies, financial projections, competitive analysis, SWOT analysis, and future roadmaps. In essence, your five-year business plan should detail your business’s direction, what you think your industry will look like in five years, trend predictions, and how your business will solve your target audience’s problems.
Your five-year business plan will probably include the following aspects; however, it may vary slightly from this outline:
- Executive Summary. A brief description of your business, and its goals.
- Business Description. Where does your business operate, and what does it do?
- Management Team. The people who run your business.
- Products and Services. A description of your business’s offerings.
- SWOT Analysis. Analysis of strengths, weaknesses, opportunities, and threats concerning your business.
- Target Audience. Who buys from your business, and are there potential new audiences you want to reach?
- Competitive Analysis. Who are your competitors, and how does your business compare to them?
- Market Analysis. How does your business meet the needs of its customers?
- Marketing and Sales Plan. Plans for brand awareness, and increasing sales.
- Financials. Profit and loss statements, and future financial projections.
- Conclusion. An overall summary of your five-year business plan.
How to Write a 5-Year Business Plan
Let’s look at the outline above in detail, to uncover what to include in each section.
Write your executive summary with your business’s overview, and mission statement. Concise mission statements that reflect your business’s goals and objectives are ideal, such as these from famous brands:
“To connect the world’s professionals to make them more productive, and successful.” LinkedIn
“To help people worldwide plan and have the perfect trip.” Trip Advisor
Consider writing your business’s executive summary after completing the other sections, as this element of your plan should be a complete rundown of your business.
This section contains all the essential information about your business, including your goals, target customers, business structure, and future restructuring plans to align with objectives. Consider why your business exists, your hopes for your business’s future, and its values to fill out this section.
Include a brief description of your management team’s job responsibilities, skills, and how they fit into your business. Your team can act as your business’s USP, especially if they bring unique talents to the table.
Products and Services
A detailed description of your business’s products and services, including benefits, features, and supplier information if relevant. List potential new services or products in the early planning stages, how much revenue you plan to make from them, and how they will serve your target audience.
Focus on your business’s strengths, weaknesses, opportunities, and potential threats. For example, strengths may include your business’s exemplary customer service. A weakness might be that you need to optimize resource scheduling. Opportunities are areas your business can explore to scale up, and threats can include opposition problems or changes in your industry.
Describe your current target audience, and any potential new audiences your business plans to expand to reach. Segment your customers into demographics, behavior patterns, values, and level of education if appropriate to your business. Doing this helps readers of your five-year business plan further understand how your business plans to grow.
Your business plan should include information about who your competitors are, and, where your business sits compared to them. For example, SaaS businesses would conduct cloud call center software comparison research to understand the competitive landscape. Finish off with details about your competitors’ strengths, and weaknesses in this section. Competitive analysis helps you understand areas your business can win over your competitors. If their social media platforms show that their overall customer service is underperforming, you can make strides to elevate your customer service efforts, and overtake them in this area.
Research your market and write your findings, incorporating statistics, and relevant data. This area of your business plan should focus on where your business is positioned currently in the market, and your predictions for future market changes regarding your business’s strategies. Think about how big the current market is for your products or services, and this should create ideas for future product developments.
Marketing and Sales Plan
You need an overall plan for marketing your business’s offerings to your target audience. Include information about digital marketing plans, and opportunities to increase your brand’s reach. If you plan to explore the benefits of local phone numbers to level up your sales team’s capabilities, add this information as part of your marketing plan.
Include details about your sales strategy, involving future staff required to meet your business’s goals. Information about sales targets is helpful in this section of your business plan.
Prepare a financial report demonstrating your business’s financial projections over the next five years. Your report must include anticipated revenue based on market, and competitor research.
Illustrate the key points within your five-year business plan in a neat summary. This section should reassure potential investors that your business is viable, and has solid plans for growth.
Develop Long-term Growth Targets
While creating your five-year business plan, always have in mind where you envision your business in five years.
When writing your long-term business plan, the following questions are helpful:
- How many customers do you predict to gain in the next five years?
- What do you need to put in place to achieve that customer number?
- Do you need to consider shopify alternatives?
- How much does your business need to earn in year three to be on track?
- Do you need to hire new staff members? If so, how many?
- Will you change your business location?
- Will you need to open up different locations for your business operations?
- Will you introduce new products or services?
Consider setting milestones for the course of your five-year business plan, as this approach is often easier to manage.
Say your business plans to dabble in the affiliate marketing world. Investigate drop shipping vs affiliate marketing approaches to ascertain which marketing method is most beneficial for your business. Then set a milestone to join a set number of affiliate marketing programs by a specific date, review your results, and move upwards from there.
Making a Good Business Future
Your five-year business plan will require amendments over time. And that’s perfectly normal. As your business grows and changes, you’ll learn new things about your business’s industry, and need to alter your roadmap accordingly.
An effective five-year business plan serves to convince investors that your business is worth investing in. It also ensures that your business moves in the right, and planned direction.
By creating a five-year business plan now, your business stands the best chance of success for the next five years, and the future.