Even if Joseph Stalin gave the 5-year plan a bad reputation (for those who know references to Soviet history), there are actually some good reasons for you to create one for your own business. However, no matter how well the design is, the 5-year plan will not help if it is archived and forgotten. Here is how you can develop a 5-year plan and implement it.
Why should I make a 5-year plan?
There may be three main reasons for making a five-year plan:
- It shows your bank or potential investors that you have a clear understanding of the direction of your business.
- The plan focuses the attention of you and your team on one goal.
- Plans can inspire confidence in your business.
The plan can be more or less detailed, but when you make a plan, it shouldn’t be just a simple mission statement. For example, “In five years, we will be bigger than Microsoft” is not a plan. When you make a five-year plan, you do this to show a larger picture in more detail.
Therefore, your plan should include the following information.
Clear objectives
You should clearly understand where you want your business to grow in five years. This means that you have considered how to achieve your goals and how you can achieve them. Be realistic.
Temporary steps
Break down your plan into intermediate steps (five years, quarterly, weekly, etc.). This allows you to check the progress and see what needs to be changed. We recommend five temporary milestones.
In these years, include short-term goals that will help you achieve these annual goals. For example, if you want to expand your product line to include three new best-performing garments within a year, your short-term goals might be:
- Grow your social media e-commerce with 10,000 followers
- Organize a virtual conference
- Connect with five influencers to market your products
Seeing these steps may help you adjust your pace, judge your progress and show investors that you have considered your plan.
Financial details
Do you have enough money to execute your plan? Do you have a source of funds? Will future sales cover expansion costs or your goals? You don’t want to put yourself in danger of taking on too much debt and then not repaying it.
What resources do I need?
As you approach your goal, what additional resources do you need? Do you need more employees, more space, and more equipment? Try to imagine when you need additional resources and include them in your temporary steps.
How to make your plan
Cooperative effort
As an owner or manager, it is sometimes difficult to see the reality of the business. Therefore, making your plan a collaborative effort will bring new perspectives. Others may see things you might have overlooked. The number of people you bring depends on the size of your business.
Be realistic
Set achievable temporary goals. You may believe that you can achieve an annual sales revenue increase of 10%. Do others agree with you? Why not set an annual target of 7%? In other words, dreams are good, but don’t set unrealistic goals. If you do not meet with them, you and your employees may lose morale.
follow up
Regular review
Meet with your stakeholders to see what is going well and what needs improvement. These reviews should be conducted regularly, not just once a year. The review will show you where you can improve, and people can suggest how to improve.
Regular meeting
These meetings will be more formal than reviews. Review the interim steps and overall goals. Are you on the right track or need more time? Do you need to switch resources from one area to another?
The next five years
If your plan is going well, please start to develop the next plan before the end of the current plan.
in conclusion
Even the best plans will encounter obstacles, and just because you write your goals for the next five years on paper does not mean that they will not be disturbed. If this happens, please don’t give up. Just reroute. Remember, following does not always mean sticking to the original game plan.
