A Strategic Future: Steps for Creating a 5-Year Business Plan

November 6 2019 - Nearly anyone can start a company. However, building it into a thriving business is a different story. In order to be successful as a business owner in today's competitive market, you must have a plan.

Creating a 5-year business plan and sticking to it can prevent you from joining the 50 percent of small businesses that fail within the first 5 years of operation. Obviously, for any business plan to work, it must be supplemented with a strong work ethic. However, you must also know how to properly write a business plan.

Keep reading for the essential steps.

How to Build a 5-Year Business Plan

Your business plan shouldn't be taken lightly. Take your time and do the groundwork to write it, as it will serve as your guide for how you run your business in the years to come.

1. Start with Research and an Outline

First, start by doing an adequate amount of market research. You need to find out what the current trends in your industry are. This includes researching your competitors and finding out what they're doing right and wrong.

Then, get your thoughts together and organized them by writing an outline. Start with notes until you get everything finalized. Then, make a final version that can go in your official 5-year business plan.

Your outlines should include all the key points and subpoints of the items listed below. In an outline, less is more. Hit all your key points and subpoints, but don't overcomplicate your outline.

2. Detail Your Strategy

Next, you can go into depth regarding your strategy.

This is where you will detail every part of how you intend to achieve your goals or OKRs over the next five years. It should include the following:

• What is your mission statement?
• How will you be better than similar businesses?
• What products and services will you offer?
• What will your costs be?
• How will you operate? (physical location, online services, shipping, etc.)
• What is the structure of your business? (management, employees, contractors, etc.)

3. Introduce Your Team

Once you've detailed your strategy, it's time to introduce your staff, contractors, and/or business affiliates.

Here you will describe the role of each person on your team and how it will contribute to the success and growth of your company. Make projections about staff growth over the next 5 years. Be sure to include all the costs associated with having employees, such as insurance policies, taxes, payroll, etc.

4. Explain the Expansion of Your Products and Services

The next step in your 5-year business plan is to explain how your products and services will change during this time. If your business is expanding and growing, you must keep up. This includes evolving with consumer demands and handling greater volumes of inventory.

5. Make Your Financial Projections

Finally, end your 5-year business plan with your expected financial projections. This includes everything going in and out of your business account.

Try to account for every expenditure:

• Building costs (rent, insurance, utilities, taxes)
• Employee costs (payroll, insurance, taxes, benefits)
• Operating costs (supplies, production, inventory, licenses, insurance, taxes)
• Specialists (accountants, attorneys, realtors, professional affiliations)

Need More Help

Writing a thought-out and well-researched 5-year business plan is a great step for your company. However, there's a lot more to running a business than writing a business plan.

If you're looking for more business advice and information, feel free to check out the rest of our articles!