We've on-pre Microsoft Dynamics CRM Workgroup Server 2011 and we're planning to upgrade it by purchasing 5 more CALs.
Could anybody suggest what are steps/precautions I've to take ?
This preserves your existing server while allowing you to test the migration to the new server.
You might give this a look. It is a PDF published by the CRM User Group:
http://www.crmug.com/events/crmugdayone2012upgrading.pdf