App version: 0.1.0

How to Write a 5-Year Business Plan

Not Sure How to Write a 5-Year Business Plan?; Unsure how to structure a 5-year business plan? Here are some ideas and examples from Lantern by SoFi.
Susan Guillory
Susan GuilloryUpdated April 21, 2023
Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you’re like many business owners, you may often find it hard to look beyond what’s in front of your nose at that moment. You may be so mired in the day-to-day that you rarely, if ever, think about the future.But the future is important, too, and having a business plan can help you focus on where you want to go with your company and what it will take to get there.How far into the future should you be planning? It can be helpful to have a short-term plan for one year, as well as a three-year business plan. But in this article, we’ll look out just a little further to create a business plan for the next five years.We’ll also look at examples of some of the sections you should include to help you in writing your five-year business plan. 

Why Create a Five-Year Business Plan?

So why bother to create a five-year business plan—or any business plan at all, for that matter?Having a business plan can help you see the big picture for your business. It helps you identify your strategy. Why are you in business? What do you want to accomplish? It can also help you define your marketing approach. You’ll have to do some research into who your clients are for your business plan, and by putting your energy here, you’ll be able to improve your understanding of your audience and how to reach them.If you’re looking into how to get a business loan or how to look for investors, you may see that some lenders and investors require a business plan from applicants. Why? They want to see that you’ve carefully thought through your business strategy and have a detailed plan for the money you’re seeking.(P.S. You’ll probably also want to learn how to build business credit if you’re planning to take out a business loan.)So why a five-year business plan? Five years is a good period of time, since it lets you consider both the short-term (the next 12 months) and look forward to the longer term, as well as set goals that you can work toward over time. Now let’s look at what you need to include in your plan, including some examples.

Sections to Include in Your Business Plan

Not sure how to write a five-year business plan? We’ll go through it, step by step.Your own plan might vary slightly. For instance, you might decide to include your “Management Team” and “Products and Services” as subsections under “Company Description." But these are the sections that might typically be included in some form in a five-year business plan.
  • Executive Summary. A brief overview of your business and its goals. 
  • Company Description. What does your firm do? Where does it operate and how does it fulfill its goals?
  • Management Team. Who runs your company? What relevant background do they have?
  • Products and Services. What exactly does your company produce/provide and how much?
  • Target Audience. Who do you expect to buy your products and/or services? Are there new audiences you want to reach, too?
  • Competitive Analysis. Who are your competitors and how do you compare?
  • Market Analysis. How well is your company meeting the needs of your clients and keeping up with the industry?
  • Marketing and Sales Plan. What is your plan for getting your company out there, expanding awareness of your products/services, and increasing your sales?
  • Financials and Budget. What is your company’s budget and what financial information (like profit and loss statements) can you provide?
While your needs may vary, these sections can give you a sense of the basics you’ll likely want to cover.Recommended: How to Mistake Proof Your Business Idea

Seven Steps to Creating a Five-Year Business Plan

The five-year business plan sections above are meant to give you an overview of what goes into many business plans. You might choose to modify one element or add another, depending on your business needs.Now let’s walk through how to create a five-year business plan, illustrating what those sections all are. We’ll also include five-year business plan examples using a fictitious tour company, Bella Tours.

1. Prepare Your Executive Summary

This is the first impression readers may get of your company, so you want it to be appealing and engaging. Your executive summary should be a high-level overview of your business plan. It might include just a little info on your mission statement, company history, what makes your company different, and your company goals.Your executive summary might just be a page or two long. Remember: You’re going for high-level understanding, not nitty-gritty details. And even though we’re listing it first and it should come first in your finished business plan, you may want to consider actually writing this section last, because you might have achieved a better understanding of what needs to go into it at the end of the process.

Example of a Mission Statement

Bella Tours provides hands-on curated experiences for travelers in Calabria, Italy. Customers have the unique opportunity to meet locals and experience local culture on the tours, and Bella tours is the only company to provide this service in the region.

2. Consider Your Strategic Plan

In the sample five-year business plan we’re building for Bella Tours, we’ll next consider what we want to happen over the next five years. We also need to determine why we’ve chosen these goals and how we’ll meet them. Much of this information will go in your executive summary, though some may be relevant elsewhere, too.

Example of a Strategic Plan

Over the next five years, Bella Tours wants to expand its offerings. Our goal is to build partnerships with three to five homestay companies and add four new tour offerings per year. By partnering with homestay companies that offer excursions on their sites, we will expand our reach beyond that of our website. Additional tours will provide something new for repeat clients.

3. Describe Your Business

In your five-year plan for business strategy, you’ll also need to go more in-depth about what your business is and who’s involved. If you’re looking for investors, they will probably want to see that your team has deep experience in your industry.This section (or an adjacent section) should also contain details on all products and services you offer.

Example of Management Team Description

Bella Tours is run by CEO Isabelle Rose, a published travel author who has lived in Calabria for 10 years. She brings a wealth of knowledge of the tourism industry to the company.

4. Analyze Your Market

Now it’s time to look at your client base. Who will buy your products or services? Where do they live? What kind of education or jobs do they have? How do they make decisions about what to buy? What other products or services do they buy?

Example of a Market Analysis Statement

Bella Tours customers are primarily solo travelers aged 30-40 or couples aged 60-75. They are college-educated and affluent. Many are retirees, and most travel in Italy for several weeks at a time. Our customers tend to be repeat consumers of our tours (58%), which is above the average return rate for similar tours in our state (25%). 

5. Outline How You Will Handle Marketing

Now you’ll need to provide a marketing plan as part of your five-year business plan. This will address the channels you use for marketing as well as a budget for each.These costs may include, for example, social media software subscriptions, a marketing employee’s salary, or a consulting fee to retain a marketing firm to manage social media, design fees, and advertising. 

Example of a Marketing Plan

Bella Tours uses the following channels to reach our audience:
  • Social media (Facebook, Instagram)
  • Social media ads
  • Content marketing
  • Email marketing
  • Pay-per-click ads

6. Budget Costs and Revenues

Now it’s time for dollars and cents. If you’re seeking financing or investment, the bank or investors will want to know that you know how to calculate cash flow, forecast sales, and account for expenses to grow your business.You’ll want to include your income statement, balance sheet, and cash flow statement, as well as budgets for operations, overhead, sales and marketing, and other business expenses. You can also include sales forecasts here.

Example of a Marketing Budget

Bella Tours’ annual marketing budget consists of:
  • Social media management (outside firm): $12,000 
  • Marketing software: $300 
  • Advertising: $5,000 

7. Review Regularly

Now that you’ve created your five-year business plan, put it to good use! If you need to apply for funding, review it carefully before sharing with lenders or investors.If you’ve created it for your own internal purposes, be sure to look at your business plan at least every quarter so you can ensure you’re tracking toward achieving your business goals. Realize that your business plan may change over time. If company objectives change, be sure these changes are reflected in your plan.Recommended: Business for Sale: Owner Financing, Defined and Explained

The Takeaway

Using these five-year business plan examples, you should be able to create a stellar business plan. Use that plan to continually push your business ahead!Ready to apply for small business loans? Lantern Credit can help. Find the right financing for your business with a match with a single provider.

Frequently Asked Questions

Why write a business plan?
What should you include in a five-year business plan?
How do I describe my business?
How do I write an executive summary?

About the Author

Susan Guillory

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.
Share this article: