How to Create a 2 To 5-Year Business Plan
Businesses need to take a long-term perspective on planning as many business initiatives may take years to implement fully or even more likely, years to see the results and a return on investment. While most businesses engage in annual business planning, it is very appropriate for a business to develop longer-term plans whose scope is two to five years. Ideally, the plan should be a 2 to 5-year business plan. Beyond that time with changes at the company internally or externally, a loss of strategic or goal focus can occur.
Develop the major long-term goal that the company will attempt to achieve over the course of 2 to 5 years. Consult with internal department managers to get their input on forecasts in manufacturing, research, marketing or sales that will constitute the tangible evidence of the realization of the long-term goal. This is an extremely important exercise as all company operations will be singlemindedly focused on the one overarching goal over the next several years.
Identify the new business, new product research, and development, or new distribution channels that will be undertaken. Estimate the time required for development or implementation of the strategies and tactics recommended achieving the major long-term goal.
Forecast Market Forces Impact
Study forecasts of growth projections for the industry in which the company operates as well as the economy in general. Recognize that central to a long-term plan is the project of the performance of market indicators and their impact on the company’s sales, profits, and general operations. Evaluate and factor in any known activities of competitors that might negatively impact the company’s ability to accomplish its long-term objective. Adjust the business’ long-term plan in light of predictions about market forces and their positive or negative impact.
Reassess the major long-term goal annually as a part of the business’ annual planning process in terms of whether programs undertaken in the last 12 months to achieve the major long-term goal have been effective and whether they made an impact toward accomplishing the major company goal.
Reevaluate whether the long-term goal continues to be actionable, achievable or even desirable given current business demands as well as any dynamic changes occurring in the marketplace. Adjust the focus of the 2 to 5-year plan as appropriate to ensure that the company’s long-term vision has not been compromised or clouded by time or circumstances.