Evan Carmichael breaks down 5-year business plans into two types: investor-focused plans need an executive summary, team bios, and defensible financials; personal roadmaps start with your vision and purpose, then map hiring, marketing, and costs. Revisit quarterly and adjust as the market changes.
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Hi, I'm Evan Carmichael. Welcome to another edition of Ask Evan. In today's episode, I'm going to answer a question from one of my newsletter readers, Chris, who wants to create a 5-year business plan and wanted my advice on how to do it. So Chris, I think the first thing you need to figure out is who is your reader. So are you doing this to try to raise money for your business, or is it just for you to be able to plan your company. So if you're doing it to raise money, if you're going after, you know, an angel investor or venture capital or banks— when I was in the VC business, the first thing we looked at was the executive summary. So a quick summary of what your business did. Then we looked at the management team and saw, you know, who's behind this operation. Do we think that they can, they can do it and they can excel? And then we'd pour over the financials to see what kind of projections they had going forward, and then everything else. So those would be the first 3 things that I would, you know, really make sure are super solid. Is your executive summary, your management team bios, and your financials, and be able to explain every number on there, every word that comes out of there, because you're going to get grilled on those sections more than any other section in your business plan. If it's just for you, if it's for you to plan your own business in the next 5 years and where you want to grow, I would start around what is the vision for your company. So where do you see yourself going? What's the main product or service you want to launch, and how do you see it helping people? And how can you help the most number of people in the most meaningful way? And start with that kind of bigger vision for your business, and then you can start getting into the execution. So, you know, in 5 years, where do you see yourself? Where do you want your business to be? And then what do you need to do to be able to get your business there? So you're going to be doing a lot. Do you need to bring on team members to help you? How are you going to actually execute it? So the execution is your marketing, your production, you know, all the costs that come along with it, people you might need to hire to be able to get you, you know, where you need to go. But you start around the big goal that you have, so your company in 5 years, and you start working towards that goal. If you're a brand new startup, then it can be really hard to do a 5-year plan. It's still great to do, it's an awesome exercise to go through, it teaches you a lot about the market and how to grow your business. The reality is your business plan is going to change, you know, almost from day 1 as you start your business if it's a brand new business. And you have to be flexible with it. So you'll make multiple updates to your business plan as you continue to grow. You want to build around your customers, figure out what their challenges are, get as close as you can to them as possible, get feedback from them, and incorporate that into your future business plan growth. So it's good to have the 5-year plan, it's good to have a big goal for yourself, a vision to shoot for. Just be flexible, because what you think you're going to be and what product or service you think you're going to come up with are going to change. The further out in the future you go, the more things are going to change. So keep coming back to your business plan. You can look at it every quarter to see how you're doing. And potentially make changes based on new information you've learned by talking to your customers and actually going out there and making sales. So I hope that helps. Uh, if you guys like the video, please give it a thumbs up below. And I'd also love to hear what you have to think. If you want to leave a comment or if you have a question, put that below in the comments and we'll see you on the next episode.
