Making a 5 year business plan

This term is familiar to most commercial loan officers and small business investors. Learning how to write an effective five year business plan helps you manage better and improves your chances of receiving the loans or investment dollars you need to succeed.

Making a 5 year business plan

Share on Facebook According to business-planning authority Tim Berry, founder and chairman of Palo Alto Software, the purpose of business plans is planning.

Instead of keeping business plans out of sight when they are not being shown to investors, company owners should use them as they are intended -- as management tools for planning.

When important outsiders want to read the business plan, management can modify it to accommodate them. A venture capital firm wanting its commitment to the company to be limited to five years, for example, would want the financial projections and the marketing strategy in the plan to cover at least five years.

Step 1 Write the company description. This section should tell the story of how the business came to be. Tell what the company does, give its location and describe the staff. Photographs of the building or the interior work areas are appropriate for this section.

Tell the reader what the product or service is and how it differs from -- and is superior to -- others on the market. Step 3 Write the marketing section, including your analysis of the industry, your market and your competitors.

Describe your sales strategy, your pricing policy and how you will advertise and promote your product. Give a thorough assessment of the market potential for your product for the next five years.

Step 4 Organize the management section. Include biographical summaries for each member of the management team plus key employees. If appropriate, include information about professional support -- attorneys, accountants and consultants.

Step 5 Complete the financial section. If the company has been operating, include its last three years of financial statements, which should have been audited or at least prepared by a firm of certified public accountants.

Financial statements consist of a balance sheet, an income statement and a cash flow statement. Give monthly figures for the first year and annual amounts for the next four years. If the historical statements and tax returns are too bulky, include them in an appendix.

Step 6 Write the executive summary. Write it last, but place it first in the plan. It is best to write this section last to ensure that it includes the strongest and best points about the company. The executive summary should include the most compelling points about the business. It gives the all-important first impression.

If a venture capital firm is reviewing the plan, the first step is for a reviewer to read the executive summary and look over the financial projections. If it does not immediately impress the reviewer, it goes no further.

Step 7 Assemble documents in the appendix. Tip The company owner or the management team should write the business plan. This gives management ownership and intimacy with the plan. Avoid turning the writing over to a consultant. After the plan is finished, hire a freelance editor to polish the document.

making a 5 year business plan

Involve your accountants in creating the financial projections. Investors like to see a high degree of detail in the projections. Include a break-even analysis to show when sales volume reaches a level that will cover costs.Feb 28,  · Writing a business plan can help you determine if your idea is feasible and provide direction.

Business plans should avoid fluff, be realistic, and include visuals. Building a 5 year Business Plan How to Design a Successful Model for Your Publishing Company Presented By Marion Gropen There are a number of types of business plans.

Oct 04,  · To write a five year plan, come up with some goals that are as specific as possible, which will make them easier to track.

making a 5 year business plan

For example, instead of saying "I want to be making more money," you could say "I want my salary to increase by 15 percent." Once you've made a list of goals, write out a plan for achieving each one%(81).

A five-year business plan can be written for a number of purposes. A general plan looks at the entire business holistically and projects it into the future, while a more targeted plan might be used by individual departments to develop strategies.

One way to help your business succeed is to plan for success by developing a business plan – a written document that outlines the steps you and your business need to take in .

Jul 19,  · In a five-year business plan, you should convince the reader that your products/services are marketable now and will continue to be popular in the coming years.

How to Create Your Five-Year Master Plan – Personal Growth – Medium