A five-year strategic plan is a well-regarded -- and often overlooked -- business tool guiding the vision and direction of a company. The strategic plan concept applies to personal goals and finance as well. However, in both business and personal life, the effective plan is realistic, active and flexible.

Strategic Plan Basics

Looking five years into the future is daunting without a simple framework to guide you. Effective plans deal with three aspects of your business: where you are now, where you want to be in five years and how you will get between those two points. To keep focused, each element of your strategic plan should address one of these aspects. In many cases you may already know where you are and where you want to be, reducing the hard work of your strategic plan to the essence of how to get there.

Where You Are Now

Assemble the key elements supporting each aspect. For example, you probably already have a mission statement, and it may still be valid for your business as it is now. If your mission has changed, address it so you can determine your starting point. List your company's guiding principles and make an honest evaluation of the current state of strengths, weaknesses, opportunities and threats to your business; this is known as a SWOT analysis. Identify successes and failures that brought your business to its current point.

Where You Will Be in Five Years

Using your company's current status, define each element in terms of where you want it to be in five years. This could be achieving and sustaining certain sales amounts or market share. It may include expanding, franchising, adding product lines or reaching other milestones. You can revise and choose focal points as you go through the strategic planning process. Consider including a vision statement for how you want your mission statement to read in five years.

How to Get There

Just as many highways and back roads connect two cities, you can choose from many different routes to achieve your business goals. This is the essence of strategy and the meat of your strategic plan. Items that define how to get to your goals are often action based. As with any action plan to achieve goals, set specific, measurable and realistic goals, and provide time frames. Many five-year plans have one- and three-year checkpoints to aid annual progress reviews.

Compiling Your Plan

Once the brainstorming is done, organizing and completing your plan will give your ideas shape. As with any business writing, consider your audience. A strategic plan to motivate your employees may have a different tone than one for your banker. Summarize your plan. Include your mission and vision statements and your goals. Include both current and projected SWOT analysis and key performance indicators. Industry analysis, target markets and your competitive analysis are included, as are operations, marketing and human resources plans. Project your company's finances and how you will deal with market challenges.