11 Steps for Writing a 5-Year Business Plan

By Indeed Editorial Team

Published August 11, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Business managers often develop plans for the future of their organization in order to help their teams and investors understand and justify the growth potential of their organization. Five-year plans are one type of plan that managers commonly write in order to achieve these goals. Learning about how to write five-year plans can help you develop your own and understand the importance of each section. In this article, we discuss the definition of a five-year plan, why you may write one and provide a list of steps to write your own.

What is a 5-year business plan?

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. Investors commonly read five-year business plans when deciding if they are going to make an investment in a company, as these plans provide valuable insight into the projected future of an organization.

Why should you have a 5-year business plan?

A five-year business plan can help you stay organized and focused on your business goals, as well as describing these goals to investors. Preparing one of these plans can help business managers make important decisions about the future of their business, justifying these decisions by detailing how they fit within the plan. Additionally, investors may want to know how the businesses they may invest in are going to spend their money over the next five years to grow their business.

Related: 7 Types of Business Plans

How to write a 5-year business plan

Following a template can help you write more effective five-year business plans. Here is a list of steps on how to write a five-year business plan:

1. Write an executive summary

Include this section at the beginning of your five-year business plan to summarize all the other sections within the plan, and to help employees and investors quickly understand the key points that you may cover within the plan. For instance, in an executive summary, you may explain that your overall goals for your organization are to obtain a specific amount of investment or produce a specific amount of revenue.

2. Detail a mission statement

A mission statement details the broad goals and visions of a business and why those goals and visions are important. These statements often guide employee actions, motivate hiring decisions and inspire employees to portray certain values. This section is important to include after an executive summary as it gives investors and employees a better idea of the motivations that guide businesses to include specific content within their five-year plans. For example, a mission statement for a staffing company may be to help connect more people with meaningful and valuable work.

Related: Strategic Plan vs. Business Plan: What's the Difference?

3. Include a SWOT analysis

The next section to include within your five-year business plan is a SWOT analysis, which is an analysis of strengths, weaknesses, opportunities and threats relating to your business. Strengths are anything that your business already does well, such as characteristics that separate your organization from competitors. Weaknesses are areas that your organization can improve upon, such as having resource limitations. Opportunities are areas that have the potential to increase revenue or grow your organization, such as untapped markets or marketing campaigns. Threats are areas that may cause potential problems for your organization, such as emerging competitors or industry changes.

This section helps investors and employees get a better idea of how these strengths, weaknesses, opportunities and threats are likely to play out in the next five years. For example, if your organization sees an opportunity in a new region, you may work to establish your organization within that region in the next five years. Effective five-year plans commonly include a description of each of these areas.

4. Write your goals

This next section gives you the opportunity to detail specific goals within the next five years. You may include goals for the next quarter or year, as well as long-term goals. For example, you may have the goal in the next year to release a new product and in the next five years to release several other products that compliment the product coming out next year. This section can help readers of your plan understand the step-by-step process for how you plan to grow your business.

Related: Business Models and Business Plans: How They Differ

5. Include business metrics

Business metrics, or key performance indicators, can help illustrate quantitative data on how your organization is currently succeeding. Some common key performance indicators to include in this section may be sales growth, website traffic, customer lifetime value, lead conversion rate and profit margins. You can organize this section as a comprehensive list of business metrics with the current values and a description of how you arrived at those values.

For example, you may include a list of key performance indicators that suggest your conversion rate, website traffic and sales are steadily increasing month-to-month. This can help investors justify their investment by allowing them to project these key performance indicators into the future.

6. Describe your target audience

A target audience is the type of consumer that is most likely to purchase your organization's products or services. Businesses may have one or many target audiences depending on their products or services. Describing your target audience can help readers of your five-year plan understand how you plan to market your organization's brand in order to produce revenue and grow the organization. For this reason, investors may also be interested in learning about your target audience to better determine if they are willing to invest.

For example, a baby food company may describe its current target audience as new parents, but upon the release of new products for older children, describe the target audience as expanding to all types of parents.

Related: How To Write a Simple Business Plan

7. Write an industry analysis

An industry analysis details other competitors within your industry and the growth potential for the industry. Including this section can help illustrate how your organization is likely to grow in the future and how you can position your organization to be a market leader. For example, you may describe in this section that your industry is likely to grow by 50% in the next five years and that your products or services are likely to increase in popularity in the future compared to competitors.

8. Include a detailed marketing plan

This section can provide a comprehensive guide on how your organization plans to market its products or services to increase revenue and growth. In this marketing plan, you may detail specific marketing campaigns or strategies that you plan to utilize in the next five years. For instance, you may describe a specific type of advertisement you plan to run in the near future to increase consumer interest in a new product or service. Investors may like to know if the organizations they plan to invest in have a well-structured, creative and intelligent way to bring products into the hands of their target audience.

Related: How To Do a Business Plan Analysis

9. List members of your team

This section may detail the names, positions, backgrounds, skills, experience and abilities of specific team members and how they plan to contribute to the organization. The people within an organization commonly can provide unique advantages due to their specific types of experience, abilities and skills. For this reason, readers of your five-year plan may be interested to learn about key players within your organization.

For example, you may describe that your CFO has over 20 years of experience working for some of the most successful companies in your industry. This can help illustrate how your organization differs from competitors and is likely to succeed as a result.

10. Include financial projections

One of the last sections of your five-year plan may describe specific financial projections that your organization is confident enough to make. A financial projection is an educated forecast of how your organization plans to perform financially, such as in terms of revenue growth, profit and expenses. Businesses commonly develop models that use complex algorithms to more accurately forecast the specific values associated with financial performance. For example, you may include a financial model that forecasts a revenue increase of 40% in the next five years and justify that forecast with specific calculations.

11. Write a conclusion

A conclusion summarizes all the other sections and helps illustrate the key points throughout the plan. This section can be a "call to action" that asks investors to understand the growth potential of the organization and help justify an investment. You may restate some content within your executive summary but it may be best to include other information that completes the content of your five-year plan.

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