Five-Year Plans – Are They Really That Important?
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The one question you will most likely be asked at every job interview is, “Where do you see yourself in five years?” The truth for many of us is that a lot of the time, we actually aren’t sure where we want to be in a year or two, never mind five years from now. Our answer will likely be based on the reason we are at the interview in the first place.
If you’re unemployed your answer might be, “In a stable place in my career, hopefully still with your company” or words to that effect.
If you have been fortunate enough to be employed for many years and are looking to move forward on your career path, the answer might be “I would like to take what I’ve learned and start my own business.”
It should be an easy enough question to answer but most people haven’t given it the attention they should have. Without understanding what you really want from life, without setting goals for yourself, without forward planning, how can you expect to achieve professional and personal success?
If you’re a successful entrepreneur the odds are high that you’ve got your future mapped out and understand that you will need to be flexible at times with your plans. You would probably be able to answer the question very succinctly because you know where you are coming from and where you want to go.
Just in case you are not so sure, here are some tips to help you clarify things a little better.
Creating your five-year plan
What is really important to you? What are you passionate about? What is the thing that makes you jump out of bed and go to work every morning? What car would you like to be driving? What kind of home do you want to be living in? Do you want to get married? Do you want children?
Understanding who you are and what you’re about is often seen one of those life-long exercises. There are important questions you need to ask yourself early on that will set you on a positive life course. The answers to these questions will help you to lead a more fulfilling life, both personally and professionally.
Identify your values
Start your five-year plan by identifying your values, those traits or qualities you consider non-negotiable. Your values are what drive you to succeed. If you live them authentically every day, they can help you to accomplish your goals and help you to lead and positively influence others.
Make a list of them, if you’re not sure what to write, Google personal values for some inspiration.
Identify your passions
These are the tangible and intangible things that drive you to get out of bed in the morning and face the day. These might include providing for your family or the need to be constantly learning and growing personally and professional. Perhaps your passions are more concrete; the desire to have a retirement villa in Mauritius, or an 8-series BMW. It’s important to be really honest with yourself at this stage. Your passions translate into goals that need to be achieved. Your values dictate how you will achieve them.
List your goals, objectives and responsibilities
Your goals and objectives should ideally be set for one, three, five and ten years. Divide them into categories of personal (such as health, family, standard of living, fitness, education, creativity, etc.) and work related goals (like making partner in your law firm or starting your own business). The difference between a goal and objective is that a goal is broad while an objective is more specific, for example a goal would be to retire comfortably while an objective would be to retire comfortably in five years to a lovely sea-facing villa in Mauritius.
Responsibilities are pretty self-explanatory. Usually they extend from providing and caring for your family, paying off your bond on your home, or finance on a car on the personal side, to covering salaries for employees, completing specific projects and fulfilling expectations of business partners on the professional side.
Next to each one make a note of where you are on the road to achieving these goals. This will help you to see where steps need to be taken to achieve your goals and objectives.
Understand how your goals and values affect your business life
You’ve set your goals and objectives and you understand your responsibilities, but what effect do they have on the bigger picture?
A simple example is retiring in five years. This can have a major impact on your business. If you are self-employed you will need to revisit your exit plans for the business. Do they align with this specific goal? Ask yourself if retirement five years is a realistic time frame to set for yourself. Have a look at your retirement planning / pension plan. Will you receive the full value of your pension if you retire in five years? If so, will it be enough to keep you in a comfortable lifestyle or will you need to find an additional, preferably passive, source of income?
Now that you are clear on your values you might find that this also affects your business relationships. Maybe you’re in a partnership which on the surface appears to be working, but you find your value system is not aligned with that of your partner. This can cause conflict in the workplace as you both struggle to follow the paths the other wants to travel. Dramatically different values may lead to conflicting ideas of how to operate your business or what is ethically acceptable behaviour.
Seeing the bigger picture
By now you should be getting a clearer view of the overall picture. You will know what is important to you. You will understand where you won’t compromise. You will see which areas of your life are on the right track and which ones need some additional work.
You are now at the stage where you can actually clearly articulate where you would like to be in five years. If your goal was to retire in five years, then it’s possible your answer next time you’re asked that important question would be, “Sipping cocktails on the patio of my luxury sea-facing villa in Mauritius with my family at my side.”
Conclusion
Having a five-year plan is important. Great ideas and opportunities don’t just fall into the laps of a special few. Successful entrepreneurs have life plans for themselves, which they adjust over the years to accommodate inevitable hiccups on their path to financial freedom and success. They give careful thought to their values and goals, and then set about creating opportunities to help them to achieve them.
Copyright Lindsay Grubb 2011