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Published March 04, 2019 at 11:00 AM

3-5 Year Strategic Business Plan Template and Examples

20 min read
20 min read

Key Takeaways

  • Start your 3-5 year strategic plan by setting Targets such as Revenue, Profit (EBITDA), Revenue/Employee, Market Cap, and Cash Flow, and include the year you believe you will hit them so you can hold each other accountable.
  • The one growth Target every business should set is Revenue, with a challenge to 2X your business over the next 3-5 years: 15% annual growth doubles you in 5 years, 25% doubles you in 3.
  • If your industry is growing faster than 25% per year, set a more aggressive target than 2X, because growing slower than your industry means losing market share to your competition.
  • To choose growth initiatives, brainstorm at least 20 potential ways to increase revenue, vote to narrow the list to the top 5-8, rank each on 1-10 scales for Revenue Impact and Ease, then choose and commit to your top 1-3.
  • Your 3-5 year plan is a base camp on the way to your BHAG (Big Hairy Audacious Goal), which is typically measured 10 to 20 years in the future, and it should be reviewed every year at your Annual Planning session.

 

STEP Set 3-5 Year Strategic Plan Targets

Set 3-year growth plans to define success before you start

Examples of the types of Targets and Visual KPI dashboards you will want to consider include the following:

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Revenue
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Profit (EBITDA)
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Revenue/Employee
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Market Cap
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Cash Flow
 

You can add or subtract from this list to include the Targets that are most meaningful to your business.

The one growth Target that should apply for all businesses is Revenue. We challenge you to set a Revenue Target that will allow you to 2X your business over the next 3-5 years.

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If you believe you can grow at a rate of 15% per year, then you will achieve the 2X mark in 5 years.
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If you believe you can grow at a rate of 25%, then you will achieve the 2X mark in 3 years.

Be sure to include the year you that believe you will hit those Revenue Targets so that you can hold each other accountable. Strong 3 year strategic plans help you grow revenue and stay competitive and not caught up in the short term day to day management of your company. Download our 3 year strategic growth initiatives template.

Tool Kit | 3-5 Year Strategic Planning Template CTA Image

 

STEP (1)STEP (1) Set the Right Mark: Tips for Creating a Great BHAG

Think of strategic revenue growth initiatives that can double your top line

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Strategic growth initiatives and actions enable you to double your revenue (2x) within 3-5 years. These are often the base camps in the client's quest to reach the summit of Everest in order to achieve their BHAG (Big Hairy Audacious Goal).

3-5 Year strategic plans do not come from Eureka moments. They are developed over time and should be reviewed every year at your Annual Planning Session. These 3-year strategic business plans help your company grow and sharpen your competitive advantage. It is this business strategy that sets you apart from the competition. We have an excellent blog on 3 year strategic plan example for you to get your creative juices flowing.

STEP (2) Determine 3-5 Strategic Ideas to Increase Profit

Determine strategic profit initiatives to increase productivity

These are the strategic capabilities you’ll need to develop in order to support your growth and reach your 3-5 year Targets. These are usually operational in nature or related to your infrastructure and help you while scaling up.

Some examples of profit include:

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Leadership & talent growth
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New operating systems
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Opening more locations or a second office
 These will be extremely specific to your company’s needs, vision statement and BHAG. Strategy validation is an important step.

 

STEP (3) The Process to Decide and Commit to Your 3-5 Year Strategic Plan

Choose the right strategic growth initiatives with our template to get you started

Brainstorm Your Top Strategic Growth Strategies

Start by brainstorming a comprehensive list of at least 20 potential ways your team can think of to increase revenue. Some ideas to jump-start the revenue brainstorming process are the following:

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What's my competition not willing to do?
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What do our customers hate but have to put up with?
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Do I have an asset or diamond in my backyard?
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What's the biggest barrier to entry for my prospects and how can I remove it?
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What are some big ideas or opportunities we have discussed in the past, but not acted on?
Vote on the Top 5-8 Strategic Growth Strategies

Have the team consider each idea and vote on the top three they recommend investing time and energy in considering during your strategic planning session. Choose the top 5-8 ideas with the most votes.

How to Evaluate & Rank Your Top 5-8 Ideas

Evaluate and rank each of the top 5-8 ideas based on two scales, Revenue Impact, and Ease.

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Revenue Impact - On a scale of 1-10, what is the potential impact this move could have on revenue? A score of 10 would indicate that this move alone could more than double your current revenue.
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Easy to do - On a scale of 1-10, how easy would it be to get this done? A score of 10 would indicate that it would be very easy to execute because you already have all the expertise and resources necessary, and it's synergistic with your other activities.

Be sure to include the year you that believe you will hit those Revenue Targets so that you can hold each other accountable. Strong 3 year strategic plans help you grow revenue and stay competitive and not caught up in the short term day to day management of your company. Download our 3 year strategic growth initiatives template.

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Choose and Commit Your Top 1-3 Ideas

Select the few ideas you want to include in your 3-5 year strategic plan. Decide what to say yes to and what to say no to. Classify each idea:

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Strategic ideas for Revenue = part of 3-5 year plan; revenue growth
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Strategic ideas for Profit = part of 3-5 year plan; infrastructure, scalability, and efficiency
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Idea Bench = Later, other Moves are more important
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Dead = Stop, losing move

These are the steps to identify the 1-3 strategic ideas you want to include in your 3-5 year plan. Now you're ready to begin the process of developing and implementing them.

Tool Kit | One Page Strategic Plan CTA Image

 

 

Ready to make a breakthrough in your next strategic planning session?

Make breakthroughs in your strategic planning sessions with expert facilitators.

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Your 3-5 Year Growth plans and your Sandbox are related. The key question to answer when determining your Sandbox is “what market will you dominate over the next 3-5 years?” So make sure your Sandbox is large enough to support your 3-5 year Targets but concise enough to give you focus and direction.
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If your industry is growing faster than 25% per year, you will need to set a more aggressive Revenue Target. You never want to grow slower than your industry or you will be losing market share to your competition. If this is the case, you will need to set a target that is more than 2X your current revenue in 3 years.
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Here are more tips to facilitate a strategic planning session to get the most of your investment. If you need an outside perspective and experienced facilitator to run your virtual or on-site planning session, please schedule a time to learn more here.

3-5 Year Strategic Plan to Reach Your BHAG

BHAG_1

Your 3-5 Year Strategic Growth Plan can be viewed as a base camp on the way to the summit of your long term goal. This can be used as a tool to align your company around a common purpose and closes the strategy execution gap. The summit is your BHAG (or Big Hairy Audacious Goal) which is typically measured 10 to 20 years in the future, which can feel like a lifetime in today's business environment. Your goal here is to set your Targets and identify the Strategic Growth Initiatives (Winning Moves) and Scaling Initiatives (Winning Moves for Profit) you’ll need to develop in order to hit those Targets and move in the direction of achieving your BHAG.

Tool Kit | BHAG Guide CTA Image

Typically, you will determine your 3-5 year strategic business plan as part of your Annual Planning session, which will include your goals and objective for the year as well as outlining opportunities and threats facing your company. We also have a great blog post on how to facilitate a strategic planning session to get the return on investment from your planning session. We also have a great virtual strategic planning post that provides great tips on running a virtual planning session.

 

 
 
 

Frequently Asked Questions

What should a 3-5 year strategic plan include?

Set 3-5 year Targets that define success before you start, such as Revenue, Profit (EBITDA), Revenue/Employee, Market Cap, and Cash Flow, adding or subtracting to fit your business. Then determine 3-5 strategic ideas for revenue growth (Winning Moves) and 3-5 strategic ideas to increase profit, which are usually operational or infrastructure capabilities like leadership and talent growth, new operating systems, or opening more locations.

How do you set a revenue target for a 3-5 year plan?

Set a Revenue Target that will allow you to 2X your business over the next 3-5 years. If you believe you can grow at 15% per year, you will hit the 2X mark in 5 years; at 25% per year, you will hit it in 3 years. If your industry is growing faster than 25% per year, set a target above 2X, because you never want to grow slower than your industry or you will lose market share.

How do you choose which strategic growth initiatives to pursue?

Brainstorm a comprehensive list of at least 20 potential ways to increase revenue, then have the team vote and take the top 5-8 ideas. Evaluate and rank each one on two 1-10 scales: Revenue Impact, where a 10 means the move alone could more than double current revenue, and Ease, where a 10 means you already have the expertise and resources and it is synergistic with your other activities. Finally, choose and commit to the top 1-3 ideas for your plan.

How do you decide what to say yes and no to in strategic planning?

Classify each idea into one of four buckets: strategic ideas for Revenue become part of the 3-5 year plan for revenue growth, strategic ideas for Profit become part of the plan for infrastructure, scalability, and efficiency, Idea Bench means later because other moves are more important, and Dead means stop, it is a losing move.

How does a 3-5 year plan relate to a BHAG?

Your 3-5 Year Strategic Growth Plan is a base camp on the way to the summit, which is your BHAG (Big Hairy Audacious Goal), typically measured 10 to 20 years in the future. The plan sets your Targets and identifies the Strategic Growth Initiatives (Winning Moves) and Scaling Initiatives (Winning Moves for Profit) you need to develop to hit those Targets and move toward your BHAG.

When should you create your 3-5 year strategic plan?

Typically you determine it as part of your Annual Planning session, alongside your goals and objectives for the year and the opportunities and threats facing your company. These plans do not come from Eureka moments; they are developed over time and should be reviewed every year at your Annual Planning session.
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Patrick Thean
Patrick is an award-winning serial entrepreneur, a WSJ and USA Today bestselling author, CEO Coach, and Co-founder of Rhythm Systems.
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