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How to develop your five-year plan

How to develop your five-year plan

A business plan is essential to long-term business success. It’s the compass that keeps your business moving in the right direction and acting strategically rather than simply reacting to situations. If you’re in it for the long haul, a five-year plan will help you to more effectively manage the challenges and opportunities coming your way throughout the next half-decade.

Here we look over the most important things to include in five-year plans for small and mid‑sized businesses.

Visualise your future

Before diving into the finer details of your five-year plan, take a step back and ask what you would like the business to actually look like one, three and five years from now.

Are you currently a sole trader and hoping to move to a more complex business structure? Do you plan to add employees? Do you plan to expand into bigger offices? Do you plan to trade in new markets – private or government, locally or internationally?

Take some time to create a mission statement that summarises the overall purpose of the business and the niche market it targets.

Develop and assess your goals and risks

Your mission statement covers the ‘why’ of what you do – your high-level goals delve into the ‘what’.

Your mission might be to provide the best car cleaning service in your city. Your goals should break this down into specifics and map these out over time in the form of milestones that you can track with key performance indicators over time. For instance, you might aim to be the car cleaner of choice for a specific emerging sector or industry (think companies like Uber).

Keep a watch on market trends, but also consider changes in technology: what you’ll require from your employees, general economic forecasts and any legal or compliance risks you might face. If there are too many challenges (or potential opportunities you can’t resist), consider rethinking your mission statement.

Create the strategies needed to achieve your goals

The final step in your five-year plan template is the ‘how’ – the strategies you’ll need to implement your goals. For example, if you plan to research and develop new products, how much cash flow will you need to keep your business from sliding into debt? What kinds of social networking, advertising and PR strategies will you need to reach out to targeted customers and business partners? Will you need to hire new staff? How will your HR department source the talent you require while keeping your most valued employees engaged?

Also be sure to develop a risk management plan that identifies fall-back strategies – such as insurance or business restructuring – in case you encounter aggressive competition, loss of critical staff, fire or theft, disruptive market trends or other events that put the viability your business at risk. Change is an inevitable part of running a small business – so it pays to be ready for it.

When you’re focused on your customers, it’s easy to overlook the most important asset of your business: yourself. Find out how creating an irresistible personal brand can help grow your business.

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