Many companies I work with have an Annual Plan and some foundational strategic elements, like Core Values, Core Purpose and Mission/Vision/BHAG (Big Hairy Audacious Goal). However, these companies often don’t take time to define goals on the 3 year time horizon. This is an important step, because these 3 year strategic plans form your base camps on the way to achieving your longer-term strategy. They allow you to brainstorm big ideas that will help you grow beyond just this year.
Working on your 3-5 Year Strategic Plan is a best practice during your 2-day annual planning session, but what should the outcome of that time look like? What do you need to accomplish in that time? How does it connect to your mission statement?
The foundation of Your 3 Year Business Plan:
- 1-3 Targets
- 2-3 Strategic Winning Moves for Revenue.
- 1-2 Strategic Winning Moves for Profit
3 Year Strategic Plan Examples
Obviously, there’s no cookie cutter plan or template that works for every company, but if you are struggling with a place to start or curious what a plan might look like, here are some examples of each component of your 3 Year Plan. (For these examples, I’m going to focus on the 3-year time horizon. Based on industry standards and your own growth goals, determine whether you want a 3 Year Plan—or 4 or even 5—to double the revenue for your company. Choose a specific time horizon, and focus on that period and choose the appropriate goals for the required team members. The shorter the time frame, the more detailed the action plan and clarity around SMART goals. (How to Write a Goal)
Most companies track revenue as a Target in your 3 year strategic plan. Consider if there are other important, strategic metrics for your business, and add those to your list. Think about your goal to achieve in 3 years, what the goal is for this year, and what the goal is next year to help you get there. You can't manage what you can't measure.
- 2022 Goal: $50 m
- 2023 Goal: $70 m
- 2024 Goal: $100 m
- # of Customers
- 2022 Goal: 200
- 2023 Goal: 300
- 2024 Goal: 450
- Gross Margin
- 2022 Goal: 30%
- 2023 Goal: 35%
- 2024 Goal: 40%
Other examples of Targets could be Net Profit, EBITDA, # of Locations, Revenue by Product Line, Revenue/Employee, Net Income, etc. Do individual business units require their own targets and goals? Now is the time to discuss them.
You can download our free strategic planning example template by clicking below.
Strategic Winning Moves for Revenue
There are a few ways most companies grow: acquisitions, organic growth, or expanding into new products, services, or markets. Depending on your business, your industry, and your specific opportunities and challenges, you should think through and determine the right mix of Winning Moves to help you achieve the Targets you set for your 3 Year Plan in your planning session. Your Winning Moves should help you double your revenue in the next 3-5 years. Make sure that the objective is as clear as you can make. By definition, you won't know all the answers, but the better that the team understands the mission - even if the details aren't clear - the more they are connected to the why the more they can help in strategy development.
Examples of Winning Moves for revenue growth could include strategies like the following:
- Successfully integrate 3 key acquisitions
- Launch our core product to customers in Asia
- Monetize internal database technology solution (package and sell to companies)
Other examples could be things like developing a new product, shifting your business to a subscription model, selling your product or service to a new industry, etc. The best ideas for how to grow your business will come from you and your team. If you are having trouble brainstorming and choosing ideas, we have a proven process to help.
Strategic Winning Moves for Profit.
These strategies are all about maintaining profitability as you grow. If your company doubles in revenue over the next 3 years, what do you need to have in place from an infrastructure perspective as you scale (or from a leadership and talent growth perspective)?
Examples of Winning Moves for profit could include strategies like the following:
- Expand IT infrastructure to support growth
- Generate a consistent engine to hire, develop and retain A-Players in management roles
- Increase revenue by employee 25%
Next steps to build your 3 year plan:
Once you’ve identified the right mix of Winning Moves (no more than 3-5 total), you should do the following with each:
- Assign an Owner on your team—one person to be accountable for moving the idea forward.
- Set Red-Yellow-Green success criteria for each to create alignment on what success and failure would be on each goal.
- Set Revenue Projections on each Winning Move for the next 3 years. Compare this to the revenue Target you set in your 3-year plan, this provides a number one long term goal. If your revenue projections on your Winning Moves don’t add up to your revenue Targets, you have more work to do.
- Identify and test assumptions for each Winning Move. What has to pan out for your financial model to work? Think about the assumptions you are making, and validate those before you spend time, money and energy on your strategies.
- Build an execution plan. Your annual and quarterly execution plans should link back to your Winning Moves and advance your strategy with the planning process.
- Discuss opportunities and threats - both short term and long term.
Establishing your 3 year strategic plan will help you get closer to achieving your long-term visionary BHAG and will give each of your annual plans a strategic anchor. If you aren’t sure how to get started, let one of our expert facilitators guide you.
We hope that you enjoy our strategic plan template, drop us a line if we can help.
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