Short-Term, Medium-Term & Long-Term Planning in Business

by Devra Gartenstein

Published on 18 Oct 2018

Although short-term, medium-term and long-term planning in businesses address different time frames, they should be cut from the same cloth. The more closely you align your short, medium and long-term goals, the more effectively you will be able to make plans that sync your immediate objectives with your big picture vision.

Short-Term Planning

Short-term planning in business generally focuses on a three-to-six-month time frame, especially in reference to revenue and profitability. Short-term objectives are geared towards short-term needs such as improving cash flow or launching a new product. This short-term perspective is especially useful for satisfying investors who want to see results or improving your company's bottom line so you can secure additional financing for longer-term goals. Whatever your short-term goals, make sure they serve your longer-term vision. Your new product launch should be consistent with your overall brand and with the line of products you're building over time. Your strategies to improve cash flow should bring in additional revenue in ways that don't compromise your values or distract you from your overall mission.

Medium-Term Planning

Medium-term planning is often overlooked in discussions of strategic objectives, but it is important because it brings together the clarity of shorter-term goals with the depth of longer-term planning. A short-term goal may be based on an immediate need and a long-term goal may be so broad that it is difficult to create measurable milestones. But a medium-term goal is close enough for you to project a specific targeted outcome, while also being distant enough to be meaningful for your longer-term vision. Medium-term planning generally covers a period of about three years. It may include plans to open a new store or enter a new market. It is a long enough time frame for you to see if you're achieving real results, yet it's a short enough period for you to pivot and change direction if your initial strategy isn't successful.

Long-Term Planning

Long-term planning is rooted in your company's identity and purpose. It may have elements of specificity such as a goal to open a certain number of new stores over the next ten years. However, it is impossible to predict market conditions and current events over such an extended time frame. Because of this difficulty, even specific long-term plans are mainly concrete ways to express a larger vision such as eventually supplying work shoes to your entire region. Take your long-term planning very seriously, but adjust it over time as your medium-term situation unfolds.

What Is MTP in Project Planning?

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What Is a Short-Term Marketing Plan?

What is a strategic business plan, how is human resource planning integrated with strategic planning.

  • What Is a Strategic Project?
  • Revenue Sales Plans vs. Booking Sales Plans

Project planning is the science of defining a series of actionable steps for achieving larger goals. Because long-term goals often require multiple steps over an extended period of time, it makes sense to create short-term, medium-term and long-term plans or milestones, to ensure that everyone stays on track during the project period. Medium-term plans, or MTPs, bridge the gap between the immediate future and a time that's possibly 10 or more years away.

MTP Meaning in Project Management

Medium-term plans outline the company's direction for several years into the future. Unlike long-term plans, which may set goals that take decades to complete, medium-term plans deal with time frames that typically span two to eight years into the future. Having an MTP in place prevents short-term thinking, reports Swiftcase, as it forces you to keep an eye on the future.

For example, an auto manufacturer may have a short-term plan that outlines what needs to happen in the accounting department during the next fiscal year, a medium-term plan that outlines new vehicle goals for the next five years, and a long-term plan that addresses the car needs of a new generation of buyers.

MTPs Come From the Top

A company's medium-term plan typically contains important management directives regarding the direction of the company that may take a few years to complete. For example, if a leading computer company wants to create a workforce that's more autonomous and self-directed, it may specify certain steps in its medium-term plan that must be followed to attain that goal. This may include eliminating managers and flattening the company bureaucratic structure – processes that likely can't happen in the short term.

Finances Matter

Medium-term plans contain information about the company's financial future, the future of the industry in which the company operates and any steps that the company must take to remain competitive.

For example, a newspaper's medium-term plan may point toward an estimated decline in print sales for the next two to five years. The plan's recommendation may include a complete move to the internet in two years, with a focus on online advertising revenue. The medium-term plan may then explain the potential profit and loss from such actions.

Financial analysis is an important component of an MTP as the numbers validate a project. As you move from the short-term to the longer-term, certain assumptions may need to be changed. Keeping an close eye on the financials is a way of making sure that the project does not end up costing more than the value it brings to the business.

Opportunity for a Mid Point Review

Project planning is output oriented, reports the Project Management Institute, meaning every stage of the project must have a tangible outcome in mind. A medium-term plan looks to the past as well as the future to establish the desired outcome: A company must see where it's been so it may plan where it's going.

A medium-term plan should have a review process built in so the company can assess how well the short-term has worked, and whether adjustments need to make going forward. For example, the MTP may analyze how the market has changed in the last few years, how the company has performed during this time and any new developments within the company. The plan also includes any goals that the company achieved that were set in a previous plan.

For example, if a company achieved a 20 percent growth rate in the previous medium-term plan, the new medium-term plan discusses the status of that goal.

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Short-term, medium-term & long-term planning in business, strategic management with long and short term objectives, tips for effective planning & organization, what does a business plan consist of, importance of planning in a business project, business planning & analysis, a financial plan vs. a pro-forma cash flow budget, fundamental principles of strategic & business planning models, corporate agenda topics, most popular.

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  • 3 Tips for Effective Planning & Organization
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All Hail Medium-Term Planning

  • Dominic Houlder
  • Nandu Nandkishore

medium term planning business definition

The short term is a free-for-all and the long term is just a dream.

There is a chronological no-man’s land that executives steer diligently clear of, as if it were a sort of Bermuda triangle. Think about it. When did you last hear a CEO utter the words, “In nine months time…” or “This time next year…” or “By the fall…”

medium term planning business definition

  • DH Dominic Houlder is an Adjunct Professor of Strategic and International Management at London Business School.
  • NN Nandu Nandkishore is an Executive Fellow at London Business School. Previously he was an executive board director of Nestlé S.A.

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medium term planning business definition

Business planning: Short, medium and long-term objectives

medium term planning business definition

When writing a business plan what is meant by 'short-term objective', 'medium-term objective' and 'long-term objective'?

medium term planning business definition

The difference between short, medium, and long-term objectives is the time frame of each, and the implication this has on the nature of the objectives.

Short-term objectives are generally those relating to that financial year, in a time frame from now to the end of the year (ie up to a year away).

An example might be to raise turnover by 8 per cent and profit by 9 per cent by the end of the financial year.

Medium-term objectives are generally those that relate to a period from 18 months to three years or sometimes five years (whichever is appropriate for the organisation and people setting the objectives).

These objectives will therefore be broader, can be reviewed and may need to be amended with time. An example might be to relocate to brand new premises of 20,000 sq ft by March 2021.

Of course, the medium-term will become short-term with the passage of time and should be reviewed and updated with this in mind.

Longer-term objectives are generally more aspirational and so tend to relate to a period of five years plus. Often for owners and/or managers, these can tie closely in with personal goals and work-life balance . An example might be to sell the business for £5 million before the owner/manager turns 60.

Alex Ingham, managing director – MI Supplies

Alex Ingham, managing director of workwear and clothing site MI Supplies, put together a three-year growth plan called Project 2020 to get the company in gear.

Alex Ingham sets out his objectives which help with business planning

Focusing on our website, we are extending the MI brand to overseas markets with sites designed specifically for the German and French territories in 2018.

We already have a very strong website in comparison to our competitors. Where we feel we can stand out, however, is by having multi-lingual sites across the UK and Europe.

Our first one for Germany is launching in just a few weeks’ time. We feel we have a great offer for the German market, where the majority of sites do not have the same breadth of brand and styles as we can provide.

We are working closely with our internal web team, very closely with our supplier base and have a team of people from our web platform company, Visualsoft, all working towards the same goal.

MI Supplies is also currently looking at each courier option for each EU country.

The reason for implementing Project 2020 was to spread our risk; not being dependent on one region, one country or one economy. Very often when one country in Europe has a downturn or recession, there are other countries that have an upturn. This is, we feel, a good plan to ensure we counter any downturns in certain countries.

We are looking at pushing our online turnover to £10 million per annum by the end of 2020 with the goal of hitting four million website visitors for our multi-site offering across Europe.

Simon Freer, owner – SAF Professional Cleaning Services Ltd

Working with a business coach can be the starting point for many business owners when it comes to objective setting. That was the experience of Simon Freer, owner of Surrey-based contract cleaning company, SAF Professional Cleaning Services Ltd .

Simon Freer talks about his objectives which help with business planning

I was operating as a sole trader when I first started a coaching programme with the Engineering Growth Club to set clear and measurable business objectives.

I found it challenging at first because we spent time looking at the business in detail across five dimensions – sales marketing, finance, talent and process – so we could drill down on what the business vision and purpose was: our USPs and what we wanted to achieve in the short, medium and longer term.

This is what I did this for each dimension, setting objectives in every area. These varied from sourcing the right talent, to establishing operational processes, to improving conversion rates for marketing and sales.

Having always been very reactive and basically being busy all the time but in an unstructured, non-goal orientated way, it was painful to be setting measurable goals, but adopting this as a discipline has transformed my business.

In the past 18 months, I’ve gone from being a sole trader on small contracts, to incorporating and then winning some very big contract customers. I now have a team of people working for me in the back office and I’ve doubled my turnover – all as a result of having clear, focused objectives which I reviewed and became accountable for.

Writing a business plan

However, it is imperative when setting business goals, whether they are short-term or long-term, that they follow the principle of SMART – Specific, Measurable, Achievable, Realistic and Time-bound, if they are to be truly effective.

A business plan is a great tool to help you methodically plot your business goals and objectives,

Simon Freer followed the ‘strategy on a page’ model rather than writing a chunky business plan,

‘This places everything that’s essential within a business plan on a single page and it’s much more like a living document that you can tweak and change on an ongoing basis,’ he says.

  ‘There’s no point having an extensive business plan that’s out of date by the time it’s finished and never reviewed again. Far better to have a condensed version that’s linked to your objectives. You will refer to it constantly and it always keeps you on track.’

Read the article here on how to write a business proposal

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The differences between long-term and short-term planning

Last updated on: October 26, 2022

Sometimes, planning is easy – you know exactly where you want to go for lunch and your plan for the future is crystal clear.

But more often than not, planning is difficult – from lack of resources to lack of vision, from not knowing where and how to start to having difficulties with setting effective goals. The future can be unpredictable and planning can be tricky.

Yet, it’s not impossible. In this article, we’ll go over what long-term and short-term planning mean, what is the difference, as well as how to successfully do both. Of course, with examples included.

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Table of Contents

What are long-term and short-term planning?

Let’s start by defining what long-term and short-term planning are.

What is short-term planning?

Short-term planning is usually considered to take 12 months or less. Your daily, weekly, monthly, even quarterly and yearly goals – all can be filed under “short-term goals.” They are stepping stones that will help you to reach your big goal(s).

That type of planning requires you to look at the current situation and fix potential issues as soon as possible. Sometimes “as soon as possible” takes a day, sometimes 6 months, depending on the complexity of the issue.

Here are some examples of short-term goals, divided into five categories: career , education, personal development, finances, and marketing.

  • Career goals : “Apply for a job”, “Make a website for your business.”
  • Academic goals : “Take another marketing course”, “Pass the AP Statistics exam.”
  • Personal development goals : “Start going to bed before midnight”, “ Track your time for a month”, “Join a gym.”
  • Financial goals : “Pay off the debt”, “Get a raise before the end of the year.”
  • Marketing goals : “Increase brand awareness”, “Boost website traffic.”

💡 If you need help with setting short-term goals, these articles can come to the rescue: How to plan your day and stay organized & How to make productivity plan in five easy steps . For easier planning, check out Online planner templates too.

What is long-term planning?

Long-term planning involves goals that take a longer time to reach and require more steps; they usually take a minimum of a year or two to complete. They aim to permanently resolve issues and reach and maintain success over a continued period.

We’ll discuss an exact strategy to set and complete long-term goals later in this article.

Before that, let’s go over a few examples of long-term goals:

  • Career goals : “Build a profitable business”, “Turn your passion into a career.”
  • Academic goals : “Get a Bachelor’s degree”, “Get a Master’s degree abroad.”
  • Personal development goals : “Learn a foreign language”, “Travel on all 7 continents.”
  • Financial goals : “Save for retirement”, “Become a millionaire.”

What is medium-term planning?

That’s not all, folks: there’s also medium-term planning . It entails applying more permanent solutions to short-term problems and implementing policies and procedures to make sure that those short-term problems won’t happen again. If a piece of equipment breaks, a short-term solution would be to fix it, while a medium-term solution would be to invest in a service contract.

Another example of medium-term planning is investing in employees’ training programs rather than organizing a workshop from time to time (which is a short-term solution).

Key differences between long-term and short-term planning

The most obvious difference between long-term and short-term planning is the amount of time each one takes; while short-term planning involves processes that take 12 months or less, long-term planning is, as the name suggests, longer – there’s no upper limit to the longevity of a long-term plan.

There’s an anecdote that Ingvar Kamprad, founder of IKEA, told a group of managers that it’s “important to think where we should be in 200 years.” (You don’t have to think that far ahead – a 5-year plan is completely fine.)

Another difference is their complexity: long-term planning is more elaborate, tactical, and involves more steps. As opposed to that, short-term planning is often quite straightforward. Short-term goals usually serve as milestones that get you to your long-term goal.

In business, short-term goals are mostly focused on internal issues, such as customer complaints or inefficient management, while long-term goals cover both external and internal issues. When you’re planning long-term, you need to be aware of external factors, like global trends and changes, political situation, the ways current events may affect the economy, and so on.

The difference between long-term and strategic planning

Another frequently asked question is: Is strategic planning the same as long-term planning? If not, what’s the difference between the two?

Strategic planning consists of statements and goals that determine things such as:

  • Where your company should be in the next couple of years and how to get there;
  • How to successfully respond to changes in the environment;
  • What’s the anticipated financial performance;
  • What’s the most effective business strategy.

Strategic plans are not actionable – that’s where long-term planning comes in.

Long-term planning determines concrete processes and actions needed to achieve strategic goals. It also focuses on setting priorities, aligning resources, forecasting, and handling unexpected changes.

In other words, strategic planning determines what and long-term planning determines how .

How to set long-term goals in 5 steps

As setting good long-term goals is the foundation of every other planning you’re going to do, it’s important to get it right. That can often be hard and overwhelming, especially if you’re making plans for the distant future, e.g. 10 years in advance – which is why we made this step-by-step guide.

Step 1: Define your vision

Ask yourself: What is your (or your company’s) vision? What is your purpose? What are your core values? If you’re a company: what problem do you want to solve and how would the world look without that problem?

Ideally, where would you want to be 3, 5, and 10 years from now? What is, right now, stopping you from achieving that? What changes do you need to make? If (or better to say, when ) you manage to achieve your goals, how different would things be, and in what way?

All these questions will help you clarify what do you want to achieve. The next step is – how to get there?

Step 2: Set SMART goals

If you’re sure in the direction you want to take, it’s time to set goals. They should be challenging, yet achievable, and most importantly, they should be SMART.

The examples I’ll provide to explain each letter of this acronym are mostly short-term goals as it’s easier to understand that way, but these criteria can (and should) be applied to any type of goal, including long-term goals.

  • Specific : Once I heard someone say that “goals should have their name and last name”, meaning they need to be as particular and well-defined as possible. “I want to find a job” is not a specific goal, while “I want to land a _____ position in ____ field, preferably in ____ type of company in ____ area” has a name, last name, even a middle name.
  • Measurable : In order to know if you’re making progress, you need to be able to measure it. That’s why setting goals such as “increase brand awareness” is not very good – how do you know if you accomplished it or not? Instead, try something like “get 5K followers on Instagram and 1K likes on our Facebook page.”
  • Attainable : As we mentioned above, the goals you set should be challenging, but possible to achieve. “Earn a million dollars in a week” is measurable and time-bound, but not realistic, at least not for most of us (that being said, if it’s realistic for you, go ahead and set that goal).
  • Relevant : Relevant goal is a goal that fits your vision and has importance to you. If you want to be a lawyer, setting a goal of graduating from medical school doesn’t make a lot of sense for your career path.
  • Time-bound : Give yourself a specific time frame to complete the goal; if it has multiple steps, impose a deadline for each milestone.

Step 3: Break down your goals into smaller ones

After you set your SMART goals, it’s time to break them down into smaller chunks, that will again be divided into series of actionable steps.

Big goals often consist of a few milestones that you need to reach; each one should become its own short-term or medium-term goal. Think of them as checkpoints in a race or levels in a game – you need to pass them all to get to the finish line and win.

Keep dividing it until your big goal becomes a weekly or daily to-do list. The more complicated the goal is, the more times you’ll have to break it down into smaller parts.

Let’s say you just got into university and your goal is to get your Bachelor’s degree.

  • First, you’ll divide it into 3 or 4 goals (depending on how many years it lasts): “finish 1st year”, “finish 2nd year”, and so on.
  • To be able to do that, you need to pass your exams, and each of the exams will become its own goal.
  • To pass each exam, you usually have to take quizzes, write papers, make presentations, etc; again, each of those pre-requirements becomes a subgoal.
  • Then you divide that into concrete steps: doing research, writing the first draft of your paper, editing it…

By making tiny steps like these, you’ll eventually and gradually accomplish your long-term goal.

Step 4: Prioritize

Go through your list of goals and put them in the order of their priority. That will facilitate making short-term goals and organizing your time, energy, and money in the right way. First focus on the goal(s) that will make the most difference and that align with your values the most.

Also, ask yourself: Are there some areas that need immediate assistance? Are any of those goals time-sensitive? What is the likely outcome of (not) making this a priority?

Step 5: Keep updating your list

Goals and priorities may change over time. Because of that, it would be a good idea to occasionally go through your list, make sure it’s up to date and change something if needed.

There are different types of planning: short-term, long-term, and medium-term. Short-term planning focuses on resolving present issues and takes 12 months or less.

Long-term planning is more complex and tactical and takes more time.

Medium-term planning means applying long-term solutions to short-term problems.

What all of them have in common is that all of them require thinking ahead, setting goals effectively, and problem-solving.

✉️ Do you find long-term and short-term planning difficult? What are your long-term and short-term goals? What is, according to you, the best way to plan for the future? Write to us at [email protected] for a chance to be featured in future articles.

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Dunja is a content manager passionate about time management and self-improvement. After years of trying out all the productivity techniques she managed to come across, her goal become to share her knowledge and help others to become the best, most successful versions of themselves.

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Table of Contents

The Key Differences Between Short-Term and Long-Term Planning

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In the present business context, business owners strategize their businesses in terms of short-term, long-term, and medium-term. Short and long-term goals are crucial to achieving success. Don’t you believe us? Look at the data because numbers never lie.

The study conducted by BiWorldWide finds that goal-oriented organizations have 6.7 times more employees who are proud of their organization . Also, this other reports of 2020 show that goal-oriented people are ten times more successful than non-goals-oriented people.

Organizations need clear goals to exponentially increase their work performance and success rate. However, they need to be careful while setting up goals since a project significantly depends on both short- and long-term planning. 

That’s why it’s important for organizations to understand the key differences between short-term and long-term planning so they can choose the right approach to handle their business processes. 

Follow this article to learn a brief overview of the two types of planning and explains the key differences between them .

What are short-term, medium-term planning, and long-term planning?

Companies adopt different approaches to execute their business processes. This includes the two most common types of planning: short-term and long-term. Both approaches have different objectives, horizons, and techniques. These two aren’t the only approach in use. Medium-term planning is also quite in use these days.

Overall, these planning methods help to measure and improve the performance of both employees and the organization. Let’s start defining them one by one.

What is short-term planning?

Short-term planning is a process that businesses use to create a roadmap for achieving specific goals within a specific timeframe. This process generally covers a period of time ranging from six months to one year.

The goal of short-term planning is to identify the steps that need to be taken in order to achieve the desired objectives. This process typically begins with a review of the current situation and the identification of the desired outcomes. Once the goals have been identified, the steps that need to be taken to achieve them can be mapped out.

The main vision of short-term planning focus on satisfying the investors who want to improve the company’s bottom line. As a final result, your organization can get additional financing to achieve long-term goals.

When planning such a strategy, a company must consider the current situation and issues as soon as possible. An evaluation can take a day, a month, or a year, depending on the problems and their complexity.

Short-term planning requires consideration of the following concepts:

  • Stock investments
  • Organization
  • Savings of capital
  • Networking ability
  • Communication
  • Daily routines
  • Detail-oriented

Further, depending on the organization’s characteristics, short-term plans focus on improving things— for instance , developing a new product. 

However, the company must ensure that the plan facilitates long-term objectives too. The newly launched product must secure the company’s brand name.

Short-term planning includes the solution of short-term issues such as the skills of the employees, product quality, machine condition, employee attitudes, and product complaints. 

However, organizations can set training courses for employees, quality assurance, and equipment servicing as short-term solutions. It will help you to address long-term problems as well.

What is medium-term planning?

Medium-term planning mainly focuses on ensuring that the short-term issues of the organization won’t reoccur again. For that, it requires implementing lasting solutions to short-term problems and applying procedures and policies. 

The medium-term plan focuses on resolving short-term issues permanently. For example , when the equipment fails, the short-term goal is to repair it. In contrast, the medium-term plan or the solution is to sign a service contract. 

As another example of medium-term planning , investing in employees’ training programs is a better option than holding workshops periodically.

It may take up to 3 years to achieve medium-term goals. It’s a long enough time to be thoughtful about your long-term goal. However, it is still not enough for you to project the desired result.

What is long-term planning?

As the name suggests, long-term planning means setting goals that take a long time to achieve. It focuses on eliminating the problem permanently and archive entire goals. 

The long-term strategy analyzes the company’s competitive condition and threats that they face. The threats can be the social, political, and economic environment, possible changes in suppliers, and the development of new products. Based on the analysis , it develops a long-term strategy for adopting its position.

Furthermore, it evaluates the major capital expenditure, such as buying tools/equipment and facilities and implementing rules and procedures that elevate the company’s profile to match top management’s goals.

Long-term planning builds on short-term and medium-term accomplishments , preserving those achievements and ensuring continued progress.

A management team has to reach a consensus when creating long-term goals so they are unlikely to be changed once they are set.

The time frame to achieve the long-term goal is between four to five years . However, the timeframe will vary depending on the type of business and goal.

                           📙Learn about: The complete guide to Organizational Behaviour

Key differences between long-term and short-term planning.

Planning for the short term involves analyzing your current performance and formulating an action plan for enhancing it. In contrast, long-term planning is a complete systematic framework comprising goals the company needs to meet within a specific four-to-five-year timeframe.

Let’s discuss the main differences between long-term and short-term planning.

Typically, short-term planning involves solving short-term or immediate problems . This will enable us to see the results in less than a year. 

In contrast, long-term planning evaluates the company’s stability and long-term goals in the projected future to drive it in a strategic direction. Long-term planning has no upper limit. But normally it’s up to 5 years. Also, it depends on how short-term plans are achieved.

The short-term goal is tied to a long-term goal. But to ensure you’re working properly, daily adjustments are needed. That’s why the scope of short-term planning gets changes often in contrast to the long-term plan.

Unlike long-term planning, which is based on consultation with key employees, short-term planning changes daily.

A short-term plan is executed based on ongoing operations, which can indicate if projects are being completed. It is the determining factor in long-term planning. The long-term goal depends on the short-term goals.

For example , you are going to open new a new office branch. To accomplish this, you need to first research the area, analyze your competitors, and hire employees to attract potential buyers.

Here, your short-term goal can be finding the perfect area and analyzing competitors. And if you don’t have time on researching them, you won’t be able to achieve them. Further, these short-term objectives are not related to each other.

However, without analyzing competitors, and doing research on the area, you can’t open a brand office. So, it is clear that several short-term plans must successfully achieve one long-term plan. 

Normally, short-term planning focus on solving current internal issues such as hiring new employee, the relationship between stakeholders and staff, team leader, leadership teams, and organizational structure.

Further, it includes a lack of training, high rejection rates, customer complaints, etc. To minimize the damage, they devise an action plan that can be implemented in a short period of time.

In contrast, long-term planning in business covers internal and external problems that impact the business. You should consider external factors such as the current political situation, global trends and economic change, etc.

It also includes competition pressure, key supplier, legal issues, and social problems that affect your efforts to fulfill your vision.

Planning for the short term is straightforward and flexible. This is because short-term plans only cover a short period, so they can easily adapt to changing circumstances. They are the stepping stones that help you to achieve the long-term objective.  

Meanwhile, long-term goals are complex and tactical . So, it is difficult to achieve them. They require detailed planning on how to succeed and get there. Your short-term goals naturally take you to your long-term goals. 

Finally, short-term plans are typically more flexible than long-term plans. Long-term plans, on the other hand, are more difficult to change because they cover a more extended time.

Differences Between Short-Term and Long-Term Planning

                    🎁Bonus Article: Tips for boosting productivity for business owners

The difference between long-term and strategic planning

A question that is frequently asked is: Are strategic plans the same as long-term plans? If not, what makes them different?

Many people think they are the same. However, there is a difference between long-term and strategic planning. Let’s find out what it is.

Business plan statistics show that 25% of startups without business plans will fail within two years.

That’s why for any business to get successful, there must have a solid strategy plan. Strategic planning is a structured process that includes making specific business strategies , implementing them, and determining the result.

It helps you determine what strategic initiatives and objectives to focu s on to accomplish your vision and goals.

A strategic plan consists of three fundamental steps:

  • Formulation of plan
  • Implementation and execution of the plan
  • Evaluation.

In contrast, long-term planning determines the actions and processes you need to achieve specific strategic goals. Further, it concentrates on setting priorities, handling unforeseen changes, forecasting, and managing resources.

In a single sentence, a company’s strategic planning dictates what it will do, and long-term planning dictates how it will do it.

How to use SMART goals for short-term planning?

A short-term plan can be interpreted as measurable action taken to execute a strategy agreed to by management and the organization as a whole.

As a result, short-term success depends on assigning and completing a series of objectives. In fact, short-term planning can be handled under the SMART formula. However, if you don’t know how to use the SMART framework for short-term planning, continue reading the blog.

Get familiar with the SMART framework.

Short-term planning can be categorized as SMART planning. Usually, lower-level employees execute the short-term plan specified by their manager. 

SMART stands for

S ➡ Specific, 

M ➡ Measurable, 

A ➡ Achievable/Actionable, 

R ➡ Relevant/Realistic, and

T ➡ Time-bound.

The SMART formula has five components, each of which is broken down here.

1. Specific

The purpose of this component is to determine what you want to achieve in a short period. While drafting your goal, you should focus on five “Wh” questions.

  • What exactly do I want to achieve?
  • Who are involved?
  • Why is the goal important?
  • Where is it situated?
  • Which limits or resources are involved?

You must have a clear and specific goal. Otherwise, you can’t focus on your efforts and feel motivated to accomplish them.

2. Measurable 

The milestones you set will help you to visualize the time required to complete your short-term planning steps. To know whether you’re making progress, you have to measure it. That’s why it is essential to have measurable goals. 

When you track the progress, you can stay focused, meet the deadlines and feel the pleasure and enthusiasm of getting closer to accomplishing your goal.

Measurable goals should answer questions like these:

  • How will I know when it is achieved?

3. Achievable 

Your short-term goal must be realistic and achievable to be successful. In simple terms, it’s okay if the goal stretches your capability, but it should remain possible to attain.

By setting an achievable goal, you may find the previously missed chances or resources that can help you bring closer to the goal.

  • Your attainable goal normally answers queries like
  • How can I achieve this goal?
  • How realistic is the goal, depending on resources like the financial components?

4. Relevant

Now, this component is about ensuring that your target goal matter to you. And they are aligned with other related goals. 

Plan your strategy according to the company’s core values. Creating a process that promotes employee efficiency will benefit your business.

Answering “yes” to the following questions is indicative of a relevant goal:

  • Does the goal seem worthy?
  • Is now the right time?
  • Does the goal match our other efforts?
  • Is it relevant in today’s socioeconomic environment?

5. Time-bound

Management should define the timeframe for the team to plan for and adapt to changes. When they have a deadline, they can focus on them and look toward it.

These SMART goal criteria help you prioritize your long-term goals over everyday tasks.

A time-bound goal will usually answer these questions:

In six months, what can I do?

In six weeks, what can I do?

Today, what can I do?

Discuss short-term planning needs with management to ensure the employees’ satisfaction.

It is important to discuss short-term planning needs with management to ensure the employees’ satisfaction. This will help to ensure that the company’s goals are being met and that the employees are happy with their current situation. Doing this will also help to foster a positive working environment and to keep the company’s morale high.

By asking team members what their views are on short-term planning and listening to their idea, they feel heard and valued. 

So, before deciding on a short-term goal, make sure that your team shares the same expectations on how short-term planning should be done. Getting employee feedback is the best solution for any organization to gain success.

Prioritize what your company needs to achieve.

Understanding the SMART framework’s working mechanism helps your company perform daily tasks and determine which areas need immediate attention. 

Many companies make the mistake of trying to achieve too many things at once. This can lead to scattered effort and ultimately, subpar results. If you want your company to be successful, you need to focus on a few key objectives and prioritize them accordingly.

Ask yourself what your company needs to achieve in order to be successful. Once you have your answer, you can develop a short plan to make it happen. By focusing on objectives with higher priorities first, you can ensure that your company is on the right track to success.

How to set short-term goals in 5 steps?

Goals can play an important role in your career development. The purpose of short-term goals is to increase proficiency and develop abilities within a realistic timeframe. A goal that complements your daily priorities can be greatly beneficial for your professional development over the long run.

Using the SMART formula, you can set short-term goals in a quick time. Here are some of the short-term goal-setting tips that you can follow.

Define your vision to the team member

You must start from the end. Imagine your (your organization’s) target goal and take the steps required to achieve them. Your long-term planning holds several short-term goals. So, first, decide what you actually want to achieve. 

What is restricting you from accomplishing them? What are the core values of your company? And what do you need to do to achieve them? Once you have your vision, remind your team member what your company’s short-term goals are.

Provide skills to the team

Identify what skills or tools your team members need to achieve that success. It can be the training and webinars to new technology, more extensive staff, access to the latest technology, or anything required to achieve a short-term goal. You must add them to the goal-creation process.

Review your progress regularly

Keep track of your progress periodically by checking in with yourself. Analyze how far you’ve come by using some kind of metric. You can discuss with the human resource team how to track business goals’ success. It will motivate you to keep going.

Prioritize your goal

Go through the list of your short-term goals and determine which ones are most urgent.  After that, you can move on to other projects as you become more comfortable with them. First, concentrate on the goals that matter to you most and coincide with your values.

Adapt to the change

 The world around us is unpredictable. So, while trying to achieve your goals, problems may arise. But you should always be ready to make changes. You have to change the tactics but not the goal. Don’t hesitate to shift the approach if you need to.

How to set long-term goals in 5 steps?

Creating long-term goals is essential because it helps you to lead your business in the right direction by making strategic plans. But do you know how to set long-term goals?

If not, continue reading the blog.

The following five steps will assist you to set long-term ambitions .

Identify your vision

The first and foremost step while setting a long-term goal is acknowledging the goal that you want to achieve.

Whether you want to open a new branch in another state or list among the best companies, the goals can differ. However, you must identify what you want to accomplish. Further, the goals should be realistic and measurable. You can use a SMART formula to set the goals.

If you have multiple long-term goals, divide your efforts and time to work on them simultaneously. But if you don’t find it flexible, it’s better to prioritize the crucial long-term aims.

Find out how much time it will take to complete

After finding the goal you want to achieve, it’s time to determine the time it may require. Though the ideal time the goals need completion is difficult to find, you can have an estimated time. 

Ensure that you have a realistic timeline to achieve your goal. However, sometimes external factors can affect the time-bound required to complete the goal. So, consider some possible delays when estimating your goal’s duration.

Prepare an action plan

Writing an action plan is an essential part of setting a long-term objective. It is a checklist that gives you the detailed information about all the required steps and tasks to complete prior to achieving a certain goal. 

It usually comprises a description of a particular goal, the steps, the responsible team member for each task , deadlines for each, required resources, and measures to track the progress of each step.

Track your progress

Now, you must measure the progress of your goal. It will allow you to see what positive improvements you are making toward your goal. The progress tracking process differs depending on the number of people involved and the type of goal.

External or internal issues may restrict you from achieving your ultimate goal. They may halt the progress. That’s why you must prepare to adjust if anything interrupts achieving the goal. 

Be consistent and if one approach fails, try to apply the next one. But never give up.

Effects of long-term planning on the organization

Long-term planning is essential to set the organization because they help you maintain focus. When you define practical long-term objectives, explaining the steps necessary to achieve them is easier. Having a long-term goal can also help you gain a sense of purpose and motivation. 

  • Long-term planning ensures that the company stays on track and meets its goals while providing a roadmap for employees to follow.
  • Additionally, long-term planning can help to foster a sense of teamwork and cooperation within the organization, as everyone works towards the same objectives. 
  • Further, long-term goal makes businesses become proactive with their growth rather than reacting to the present conditions.
  • Finally, long-term goals streamline communication between different all levels of the organization, as everyone is aware of the company’s overall objectives.

Many benefits can come from long-term planning within an organization:

  • Less Risk: Taking a risk on an initiative without sufficient testing and tweaking time means rolling the dice. When you commit to a short-term schedule, you may not be able to adjust based on what you see. However, long-term goals help you track results and adjust if necessary.
  • Spread costs: Long-term planning allows you to budget for new initiatives over time. A new product line or division may not be feasible to fund with cash. You add interest to your costs when you take out a loan to create something new. 

You can adequately fund new initiatives by budgeting some of your revenues or profits over a period of several years without compromising current operations.

                           😍Check out: Excellent tips to Manage Difficult Employees

  • Remove distractions: Management, through retreats, can concentrate on a specific task by eliminating interruptions from colleagues, clients, or suppliers. 

The use of email, texts, and phones at work often interrupts employees’ work. During a retreat, focusing on strategic planning will be more effective if outside communication is limited to a few breaks each day.

Conclusion 

Success doesn’t come easily. You must set SMART goals in your short-term, long term planning. Each step of your long- and short-term planning contributes to your success and plays a vital role. The common thread among them is setting realistic goals, thinking ahead, and solving problems.

However, the key dissimilarity between short-term VS long-term planning is that short-term planning targets immediate actions while long-term planning concentrates on predicted outcomes.

Now that you know how short-term and long-term planning differ, you can start making plans that are right for you and your business.

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Samir Luintel

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Long-Term Planning versus Short and Medium-Term Planning

  • Leadership & Management
  • Feb 1, 2024
  • By Traqq Team

long-term planning

While most of us can make good plans, we never get to execute them for various reasons , right?

Yet, the truth remains that you can’t make goals and objectives without a solid plan. Planning is essential to achieving short-term, medium-term, and long-term goals. It enables you to measure performance or progress in the workplace or in your life. So you know where you’re falling short.

In this post, we discuss the difference between short-term, medium-term and long-term planning. We also talk about the relationship between them and how to make long-term planning help you realize your full potential.

The Difference Between Short-Term, Medium-Term and Long-Term Planning

What is short-term planning.

Short-term planning involves strategies that focus on the results within a short time, say few months. These are the strategies to be used in achieving specific milestones. Short-term planning aims for an immediate period and helps you fix the challenges you’re dealing with in the present.

Time Frame for Short-Term Planning: a few weeks to a few months Examples of initiatives include: – launching a short-term marketing campaign to increase brand awareness, – increasing monthly sales by 10% within the next three months, – reducing operating costs by 5% within the next quarter.

Short-term goals facilitate long-term achievement. If not effectively planned and executed, it becomes much harder to attain long-term goals. So, whatever your short-term goals , make sure they align with your long-term vision.

One short-term plan example is saying to yourself, “I’d like to lose 30kgs in six months.” You can further break it down to losing five kgs every month. Another short-term plan example is to raise turnover by 10 percent and profit by 12 percent by the end of the financial year.

What Is Medium-Term Planning?

Medium-term planning entails strategies that focus on permanent solutions to short-term concerns. It’s the implementation of policies and procedures to ensure short-term problems do not recur.

Time Frame for Medium-Term Planning: 1-3 years Examples of initiatives include : – a training program for employees to enhance their skills, – expanding operations into new regions or markets, – a financial plan to increase revenue by 20% within the next 2-3 years.

In a business context, employee skills and attitudes or product complaints are short-term problems. Initiating employee training and development courses and revising the company’s quality control program may be medium-term solutions.

Another medium-term goal example is to invest in a service contract instead of repairing a piece of broken equipment every time it does. You want a solution that will prevent the machine failure from affecting the company’s productivity.

Reward real work and enhance team productivity

Track work hours effectively to ensure fair pay for actual effort, not idle hours.

Medium-term planning may cover a period of up to three years. It’s long enough to be meaningful for your long-term objectives and vision, yet short enough for you to project the targeted result.

Here’s another example. You could be planning to open a new branch in another city or introduce a new product to the market. In two or three years, you’ll be able to assess your current situation and determine whether you’re achieving success. You can then decide if the strategy is working or you need to change it.

What Is Long-Term Planning?

Long-term planning, as the name suggests, means setting goals that will take a longer time to come to fruition. These goals might take between five to ten years to be met. The timeframe will vary from one business and individual to another, as well as the type of goal.

Time Frame for Long-Term Planning : 5-10 years Examples of initiatives include : – expanding the business globally and entering new international markets within the next seven years, – creating a long-term succession plan for leadership and talent development over the next decade, – investing in long-term infrastructure projects to enhance operational efficiency and sustainability.

Long-term planning is strategic since it shapes the overall direction of the company or your career and personal goals. It involves formulating and implementing strategies that will insulate a business from the upheavals that periodically come up.

Long-term goals can tie closely in with personal goals and work-life balance. A good example is planning to become a millionaire before turning 40 or visiting all the continents within five years.

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easy and accurate time tracking

Planning anything for more than ten years in advance can be tricky. That’s why you should be prepared to continually adapt and adjust your short-term, medium-term, and long-term goals to take account of changing circumstances.

Long-Term Planning Vs. Short-Term Planning: The Key Differences

Generally, short-term planning is conducted for current and immediate concerns. The outcomes are usually expected within a year. The main focus of short-term planning is on the prevailing situation, whether in your career, personal, or business goals.

Long-term planning, on the other hand, takes longer to achieve and is based on how effectively short-term goals are accomplished. For example, let’s say you want to open multiple branches within and outside the state.

You will first need to lay a solid foundation that will attract and maintain new clients. To do so, you must research the area, gather marketing collateral such as interactive brochures and other online content, study the competition, and hire consultants to help pinpoint potential customer buying trends.

As you can see, it takes several short-term plans to reach your long-term goal of running several successful retail chains.

Short-term goals are flexible and straightforward. They act as stepping stones that contribute to achieving long-term vision and goals. Short-term goals can be adjusted daily, weekly, or monthly to ensure they work efficiently to fulfill your objectives.

Meanwhile, long-term planning is complex and tactical. It has elaborate steps that not only focus on future success but also how to get there. That’s why you should formulate short-term goals that naturally lead to your long-term goals.

In other words, you need to be flexible, realistic, and reasonable when setting goals. Circumstances change, but most importantly, you change and grow. The goals should align with your career and personal plans, as well as commitments.

Short-term planning pertains mostly to internal issues, like aging and new hires, organizational structure, the relationship between your staff and stakeholders or customers, etc. Long-term planning focuses on external and internal issues, such as the loss of a key supplier or competition pressure.

Long-term planning must consider external factors in which the business operates. These are legal, social, political, economic, cultural, and legal issues that might affect your efforts to achieve your vision.

Every step or action you take affects the outcome. Therefore, make sure your short-, medium-, and long-term goals are interlinked and aligned toward your success.

What’s the Relationship Between Short-Term Planning and Long-Term Planning?

Planning ahead is critical – plain and simple.

Planning is the most crucial process for a business or individual with career aspirations. Basically, the short-term plans are what drive sustainable solutions, as well as steer decisions in the right direction.

The truth is, you can’t separate short-term goals from long-term goals. What you need is a way to blend short-term and long-term plans to achieve your career, business, or personal objectives.

The mission and vision start by having a longer-term target. You then break the long-term goals into a series of short- and medium-term goals as milestones along the way toward the final result.

What’s the Difference Between Strategic Planning and Long-Term Planning?

It shouldn’t come as a surprise that 90 percent of businesses that start without a strategic plan are doomed to fail.

According to research published in the Harvard Business Review , 85 percent of executive leadership teams spend less than an hour every month discussing strategy and 50 percent no time at all. The study also shows that, on average, 95 percent of the workforce doesn’t understand its organization’s strategy. The rate of success in such an organization is close to zero.

However, you may be wondering, “Isn’t strategic planning the same as long-term planning?” Well, not quite.

Strategic planning is a structured process that involves creating specific business strategies, implementing them, and evaluating the outcome.

It is broader and determines what strategic objectives and initiatives you should put effort into achieving your vision and goals. Strategic planning can be performed in three fundamental steps:

  • Formulation
  • Implementation and execution

While long-term planning defines the actions needed to achieve specific goals, strategic planning makes those goals more realistic. From a business perspective, it enables employees to better understand the relationship between their performance, projected outcome, and the potential rewards.

In turn, this fosters better commitment that leads both employees and managers to become more innovative and creative. Consequently, company and individual success become easily attainable.

4 Key Steps to Creating Long-Term Goals

Step 1: clearly define your vision.

The obvious place to start is knowing where it is you want to end up:

  • Is it to increase ROI by 10-15 percent?
  • Is it to increase sales by five percent?
  • Is it to open multiple stores by 2025?
  • Is it to create five million dollars worth of assets before handing over the business by 2030?

The best approach is to write down all your organizational, personal, or professional goals and aspirations for the next ten years. It doesn’t matter how far-fetched or impossible the objectives are at this moment. You’re simply setting up the stage, and once you have it figured out, you can now start to narrow it down by setting S.M.A.R.T goals.

If it’s a business, develop a statement of your vision and make it publicly available to your staff and customers. This is the most critical step in creating a long-term plan. Therefore, it needs to be well thought out and formulated.

Remember, make goals, not wishes. Dreaming of winning the lottery is a wish, not a goal. Wanting to make five million dollars within ten years is a goal, not a wish.

Step 2: Determine the S.M.A.R.T Goals

Now that you’ve painted a clear picture of where you’re headed, the next step is to set goals. Your objectives become much easier to accomplish when they are S.M.A.R.T. Here’s what it means:

  • Specific . What do you want to achieve in the short term? Short-term goals can be defined by several hours, days, months, or up to two years, depending on several factors, like company size. Just make sure they are clearly defined, so there’s no room for ambiguity.
  • Measurable . You can’t know if you’re making progress unless you measure it. A goal, such as, “I want to increase the number of followers in my social media accounts” is not specific, time-bound, or measurable. Instead, change it to something like, “I want to reach 1,000 followers on Instagram and 1,500 on Facebook by December 31.
  • Attainable/Achievable . What are you trying to get out of your short-term goals? Is it achievable? Setting unrealistic goals can kill motivation. Try to focus on goals that are challenging yet not out of reach.
  • Relevant . Your goals should align with your career, mission, and vision. Don’t set goals that are on the opposite path of what you want to achieve. Other alignment criteria include value, feasibility, appropriateness, and cost-benefit.
  • Time-based . An open-ended goal may take too long to achieve due to a lack of urgency. Giving yourself a specific timeframe within which to hit your target is more compelling, and will push you to put your best foot forward.

Step 3: Set Milestones

The next important step is to break down your long-term goals into smaller, attainable goals. So, you want to make five million dollars by 2030? How do you get there? Well, that’s by covering one step at a time.

If you’re already running a business, you’ll start by performing the strengths, weaknesses, opportunities, and threats (SWOT) analysis to determine its current situation. You’ll be able to answer questions like:

  • What’s holding you back?
  • What weaknesses can your competitors exploit?
  • What resources do you lack?

When you identify what your company does best now, find ways to devise better strategies to increase profits or beat the competition. Getting to the level of success you want is going to be a long journey, that’s why you need to break it into smaller portions.

Step 4: Reevaluate and Adjust

When you make a commitment to achieve, consistency will help you cross the finish line. Don’t lose sight of what you want or where you want to be. Think of the reward that awaits you when you reach your goal, and let that be your motivation.

Problems will always arise, and when they do, we tend to forget the long-term goals. If one approach hits a dead end, devise another approach. As someone once said, “If the plan doesn’t work, change the plan but never change the goal.”

Plan for Success

Remember, the road to success isn’t a straight one. It requires setting S.M.A.R.T goals, as well as strategic planning. Even with enough motivation, failing to plan is planning to fail.

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Short-term planning and long-term planning play an essential part in your future success, and each step contributes toward achieving the results you want. Just be sure to frame your objectives in a way that’s easy to measure. The more specific your goals are, the easier they are to achieve and track their progress.

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Long-range planning is an effective way of aligning the organization’s activities with a strategic plan and helping preempt those situations that could threaten its business model and success.

What Is Long-Range Planning?

Long-range planning can be defined as the processes used to implement an organization’s strategic plan. It’s about aligning the business’ long-term goals and developing action plans in line with the strategic plan.

Depending upon the type of business, the time scale for long-range plans can vary from three years through to one or two decades. This is particularly the case for organizations such as utilities, large-scale high-tech manufacturers, chemical plants and research companies where the time and costs associated with investments is such that plants take years to build and returns are measured over long periods.

Short-term planning deals with the here and now. Medium-term plans address actions intended to permanently resolve short-term issues. Long-range planning is about changing the direction of the organization to meet its long-term goals and insulate it from the upheavals that periodically affect the economy.

The History of Long-Range Planning

During the 1950s and 1960s, the economy was stable and growing. Organizations experienced substantial growth, and planners started using numerical theory to extrapolate growth predictions. However, the landscape changed in the ‘70s, and the economy suffered an upheaval due to the US’s inability to maintain the gold standard. Static long-range strategies of the time could not cope with these upheavals, and many but not all businesses abandoned long-term planning for some time.

Subsequently, a number of events caused further economic instability, including the 1973 oil crisis, the 2008 housing bubble and banking crisis, and more recently, the impact of trade wars . Despite this, savvy organizations adopted long-range planning strategies intended to cushion the business from unpredictable upheaval through techniques, such as the SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), and planned accordingly.

The Relationship Between Strategic Planning and the Long-Range Plan

Strategic planning is a structured process, usually carried out by the executive, which determines long-term organizational goals. During this process, executives analyze the organization’s current business and determine though various processes a strategic view of what they believe the organization should become.

The final strategic plan will usually consist of a number of statements and goals of what the organization should focus on, how they believe it should look, what markets they should be in and anticipated financial performance.

None of those goals are directly actionable, and this is where the long-range plan comes in, as it contains the steps and actions needed to achieve strategic plan goals.

Avoiding Confusion Between Long-Range, Tactical, Operation and Short-Term Planning

There are many different planning terms in use, and a degree of confusion is almost inevitable. Depending on the author, specific terms mean different things, and, in many instances, definitions are used interchangeably.

In this blog, the long-range planning definition refers to those longer-term actions necessary to implement long-range strategic planning. These actions usually have a time horizon of more than three years. The focus of tactical planning is the short-term or, at most, the medium-term. Plans are funded by the current budget and intended to help the organization achieve its short- and medium-term goals, which will also include immediate actions intended to align the organization with its strategic plan. In this context, tactical planning and operation planning have much in common.

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Characteristics of Long-Range Planning

If not already stated in the strategic plan, a long-range plan should start with a statement of the organization’s mission and vision. The mission statement defines the reason the business exists, such as to become a leading manufacturer of high-quality consumer goods. The vision statement is more specific in that it defines time horizons, anticipated sales volumes, profitability and other specific measurable targets.

A key purpose of the long-range plan is to avoid random, non-specific growth and focus the organization’s skills toward those areas where it excels, such as making high-quality consumer goods. It’s this process that often guides an organization to sell off non-core activities that distract from the overall goal of the organization. So, typically, the long-range plan will focus on identifying the organization’s key strengths and what it’s good at with specific plans to grow the business in that direction.

Techniques for Focusing Long-Range Thinking

Most companies are good at short-term planning and often have excellent strategic plans but fail in the implementation. According to an article in the Harvard Business Review on long-term success , it’s because they don’t adequately focus on how to bring those new ideas and technologies onboard. Here are four techniques that help focus long-range thinking.

Forecasting

Long-range planning activities and goals need to be specific. Actions should be deliberate and focused, not rough cut or vague. At the same time, they need to recognize the realties and vagaries of business life. The environment will change and plans should not be immutable, but amended as and when necessary.

Handle uncertainty and unexpected change

The planning process should take into account risk and structural uncertainties. There are certain events that are simply unknowable, until they happen. To the extent that’s it possible, plans should be flexible and robust enough to handle risk. Take small bites and don’t expose your organization to unnecessary risk. Use sophisticated analytics to determine the most appropriate business decisions to achieve your strategic goals.

Understand whether specific goals and targets are realistic

Set targets that are feasible and realistic. Don’t be tempted to follow your gut by making grandiose plans which can never succeed. Test all decisions using decision support software, such as prescriptive analytics, that allows you to model how your business works.

Optimize long-range planning practices

It’s important to think holistically, ensure you have adequate decision support software and have integrated your long-range planning with your budgeting process to avoid conflict and unrealistic goals.

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Examples of Long-Range Planning

While many businesses are wary of long-range planning, others embrace it. Ferrari went from being a joke in Formula 1 to becoming its undisputed leader through implementing a bold and ambitious long-range plan. Companies such as BASF, VW and Nestle adopted 10-year and longer strategies and outperformed many of their industrial peers. Others used sophisticated optimization techniques to determine future plant investment strategies, while a large UK water utility, Yorkshire Water Services, used prescriptive analytics to develop a long-term risk model.

Long-Range Planning: Bridging the Gap Between the Present and the Future

Long-range planning is key to bridging the gap between where your organization is and where you want it to go. Starting with strategic planning, it’s an effective technique for designing and implementing effective plans to take the organization down the road to the future.

While many companies are hesitant about long-range planning, thanks to ongoing economic disruption, others have discovered that a systematic approach supported by sophisticated analytics works. This allows them to understand and balance risk, and identify the best decisions to take them toward their strategic goals.

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What Is an Investment Time Horizon?

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Investment Horizon and Risk

Investment horizon faqs, the bottom line.

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Investment Time Horizon: Definition and Role in Investing

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

medium term planning business definition

An investment time horizon, or just time horizon, is the period of time one expects to hold an investment until they need the money back. Time horizons are largely dictated by investment goals and strategies . For example, saving for a down payment on a house, for maybe two years, would be considered a short-term time horizon while saving for college would be a medium-term time horizon, and investing for retirement, a long-term time horizon.

Key Takeaways

  • Time horizons are periods where investments are held until they are needed.
  • Time horizons vary according to the investment goal, short or long.
  • Time horizons also vary according to the time by which you begin investing.
  • The longer the time horizon, the longer the power of compounding has to work.
  • Generally speaking, the longer the time horizon, the more aggressive an investor can be in their portfolio, and vice versa.

Understanding Investment Time Horizons

An investment time horizon is the time period where one expects to hold an investment for a specific goal. Investments are generally broken down into two main categories: stocks (riskier) and bonds (less risky). The longer the time horizon, the more aggressive, or riskier, a portfolio an investor can build. The shorter the time horizon, the more conservative, or less risky, the portfolio the investor may want to adopt.

Short-Term Investment Horizon

The short-term horizon refers to investments that are expected to last for fewer than five years. These investments are appropriate for investors who are approaching retirement or who may need a large sum of cash in the near future. Money market funds, savings accounts, certificates of deposit, and short-term bonds are good choices for short-term investments since they can easily be liquidated for cash.

Medium-Term Investment Horizon

Medium-term investments are those which one expects to hold for three to ten years, such as by people saving for college, marriage, or a first home. Medium-term investment strategies tend to balance between high- and low-risk assets, so a mix of stocks and bonds would be a suitable way to protect your wealth without losing value to inflation.

Long-Term Investment Horizon

The long-term investment horizon is for investments that one expects to hold for ten or twenty years , or even longer. The most common long-term investments are retirement savings. Long-term investors are typically willing to take greater risks, in exchange for greater rewards.

Generally speaking, the longer your investment horizon, the more aggressive you can be in choosing your investments.

Example of an Investment Time Horizon

Let’s say two people marry, and while they live in the city now, they’d eventually like to move out to the suburbs in a few years. But they don’t have the money for a down payment on a house, so they’ll need to start saving up. That’s a short-term investment horizon, so they’ll probably want to go with something relatively conservative, like a money market fund, to avoid any sharp swings in stocks.

Meanwhile, they’ve both taken advantage of their employers' 401(k) savings funds (an employer-sponsored retirement fund, sometimes with employer matching). And since they’re both young, that’s a long-term time horizon. Given the length of time until their retirement, they can afford to be very aggressive in their asset allocation, upwards of 90% of stocks, as the long investment horizon should allow their portfolio to recover from any short-term downturns.

Next, a baby comes along! Now they have to start thinking about saving for college. That’s more of a medium- or long-term goal, so they can be pretty aggressive in the beginning and then turn a little more conservative as high school graduation for the child comes along. But there is a government saving plan ( 529 ) that allows your contributions to grow tax-free, as long as they’re used for educational expenses. 

Each type of investment carries different forms of risk , which should be factored into your investment strategy. Businesses can fail, borrowers can default, and even sound investments can be vulnerable in a market downturn. Below, we'll outline some forms of risk and their effects on each type of investment.

Inflationary Risk

Inflationary risk refers to the danger that the real value of an investment will fall, due to an unexpected increase in consumer prices. Bonds are particularly susceptible to inflation, since coupon rates are typically fixed; an unexpected spike in inflation could erode any expected gains from the investment. However, it is possible to ameliorate inflationary risk to bonds through Treasury Inflation-Protected Securities .

Interest Rate Risk

Interest rate risk is the danger that an unexpected rise in interest rates could eat away some of the gains of an investment. Like inflationary risk, this is typically a concern for fixed-income securities, like bonds. This risk can be reduced by holding bonds of different durations, or investing in interest rate derivatives.

Business Risk

Business risk refers to the danger that a company might fail or go bankrupt, causing any stocks or bonds issued by that company to plummet in value. While no company is immune to business risk, you can go a long way towards avoiding the riskiest companies by carefully evaluating their business plans. You can also reduce your exposure to any one business by having a diversified portfolio.

Default Risk

Default risk is the probability that a borrower will be unable to repay its debts. This usually refers to bond issuers, but it could also refer to other debt-based securities. You can reduce your exposure to default risk by investing in bonds with high credit ratings.

Market Risk

Market risk , or volatility risk, refers to the chance that the value of an investment could be negatively impacted by speculative behavior, market crashes, or other world events. Since markets trend upwards in the long run, market risk is typically a larger concern for short- and medium-term investment horizons.

What Is an Investment Horizon?

An investment horizon refers to the timeline in which an investor plans to gain value on their investment. This can range from a few years to several decades.

Why Is an Investment Horizon Important?

The length of an investment horizon will determine what types of investment products are most suitable for the investor's goals. Typically, investors seek stable assets for short-term investing. Riskier investments are more acceptable on a longer-term investment horizon, since markets overall tend to trend upwards.

What Is a Medium-Term Investment Horizon?

The medium-term investment horizon typically refers to investments of five to ten years, such as people saving for a child's college education.

What Does Long-Term Horizon Mean?

The long-term horizon refers to investments that have a decade or more to accumulate profits. The most common type of long-term investment is saving for retirement.

What Is the Ideal Investment Horizon?

Since interest compounds exponentially, a longer investment horizon can generate much greater profits than a short-term investment. This is why it is important to save for retirement early—a small investment now can generate high returns if it has a few decades to grow.

Every investor needs to carefully evaluate their own goals and investment timeline before deciding where to put their money. Savings accounts and CDs may be a convenient place to store money over the short term, but will quickly lose their value to inflation. Conversely, aggressive investments in the stock market will generate high expected returns in the long run, but they will remain susceptible to short-term market fluctuations. It falls on each investor to decide the optimal balance of risk and rewards.

TreasuryDirect. " Treasury Inflation Protected Securities (TIPS) ."

U.S. Securities and Exchange Commission. " Interest Rate Risk — When Interest Rates Go up, Prices of Fixed-rate Bonds Fall ," Page 1.

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Short, Medium and Long-Term Goals: Making Business Planning Effective

business planning

Good business planning can be what determines whether a business will be a success. Business owners develop plans to help guide them towards reaching their overall goals.

The most effective business plans tend to divide the planning process into three key phases to allow businesses to track immediate improvements while also monitoring and evaluating progress towards meeting long-term goals.

The different time frames within the planning process focus on time-sensitive aspects of the company’s structure. But while short-, medium- and long-term planning addresses different time frames, they should be closely aligned to enable you to effectively make plans that sync your immediate objectives with your ultimate vision.

Effective goal setting

Goal setting helps businesses assess employee and organization performance, assess resources, and provide effective management direction. Effective business goals typically follow the S.M.A.R.T. model . Goals should be specific, measurable, attainable, and timely. Companies need to know exactly what they want to achieve and how they will measure that achievement. The company, its management team, and its employees must create attainable targets that relate to the business . Companies must also set precise dates by which to achieve the set targets.

To help you achieve your goals, write down all your business and personal aspirations for the next decade, regardless of how impossible and far-fetched they may seem. At this stage, you don’t need to know how you will achieve them.

When you have your list, you can then start to refine some of the ideas. If you have a management team, then it’s a good idea to bring them in. There are different brainstorming and planning techniques , such as:

  • Mind mapping : Write your end goal on a piece of paper and surrounding it with a bubble. You can then note down anything that comes to mind when you think about the original idea. This can take the form of pictures or words.
  • List-making : Take one goal to focus on and create lists of what is required to achieve it. You can break it down into smaller goals and steps to make it easier.
  • Brain dump : This technique is like mind mapping but not quite so structured. Write down everything that comes to mind.

Goal setting

Short-term goals

Short-term goals are generally those intended to be achieved within three to six months. However, this very much depends on what is planned. Short-term goals are typically geared towards a business’ short-term needs, whether that is launching a new product, getting more customer reviews , or improving cash flow. Whatever you choose for your short-term goals, they must serve your longer-term goals. For example, if you are planning a new product launch, this should be consistent with your overall brand and the product range you are gradually building. If your goal is to improve cash flow, your strategy should bring in additional revenues in ways that don’t distract from your overall mission. Whatever your short-term goals, they must be realistic.

Medium-term goals

Medium-term goals are designed to take anywhere between several months and five years to reach completion. It’s common for medium-term planning to be overlooked when it comes to discussing strategic objectives. However, it is important to clarify the shorter-term objectives with the depth of long-term planning. While short-term goals are based on immediate need and long-term goals are often so broad, it isn’t easy to create measurable milestones. Medium-term goals, however, are close enough for you to set a specific outcome while also being far enough away to be meaningful for your long-term vision.

Medium-term planning may include plans to enter a new market, launch a new product or open a new store. It gives you long enough of a period to see if you are achieving real results but short enough time for you to change direction should you need to.

Long-term goals

Long-term goals are those that will take several years to complete, usually between five and 10 years. This can prove difficult, but that doesn’t mean you can’t set such longer-term goals for your business; you’ll just have to be prepared to adjust your plan to take into account changing situations and markets. Even specific long-term goals are usually just concrete ways of expressing a larger vision.

You should always take long-term planning seriously but know that you will have to regularly adjust it over time as the medium-term unfolds. You can achieve your long-term goals by using your short-term and medium-term goals as steppingstones that will take you to the endpoint. When you break down your long-term objectives into smaller, more achievable steps, you are more likely to ensure your success.

Whatever aspirations you have for your business, effective short, medium, and long-term planning will be key to helping you achieve your business goals and taking your business in the right direction.

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medium-term

Definition of medium-term

Examples of medium-term in a sentence.

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'medium-term.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Dictionary Entries Near medium-term

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Cite this Entry

“Medium-term.” Merriam-Webster.com Dictionary , Merriam-Webster, https://www.merriam-webster.com/dictionary/medium-term. Accessed 19 Feb. 2024.

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Medium Term (Investments) - Explained

What is the medium term.

medium term planning business definition

Written by Jason Gordon

Updated at April 17th, 2022

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Table of Contents

A Medium-term is a term used in investment to describe an investment holding period of between 1 to 3 years. The time horizon in a medium-term investment is intermediate, the investor is expected to receive the return on investment and the initial capital within 1 to 3 years. Sometimes, a medium-term investment can last up to five years depending on the need of the investor and the type of asset being held. For instance, there are bonds whose maturity period is between five to 10 years and are categorized as medium-term bonds. Generally, the intention behind the investment is a more important horizon to judge an investment as medium-term and not necessarily the investment itself.

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How Does the Medium Term Work?

Medium-term assets or investments are held by different investors for various purposes. For instance, an individual investor can buy medium-term bonds to cater for expenses that might occur in the immediate future such as paying children's school fees, buying a property, starting a business and other reasons. Also, stock traders have a different yardstick for measuring what position qualifies as medium-term, for instance, an investor who holds a position for a week can consider holding a position for a month as a medium-term position. This is to say that there is no strict measurement of the time horizon or investment duration that make a medium-term. In real estate, for example, properties held for less than 10 years can be tagged medium-term assets.

Risk Tolerance, Return Rates and Term Lengths

Term lengths for short, medium and long assets are considerably flexible. For instance, assets held for a duration below three years are often called short-term, while 3 to 10 is medium term; and 10 years or more is long term. The risk tolerance of investment varies, and it depends on how quickly an investor seeks to access the initial capital. While short-term investments have higher risks, long-term investments have lower risks. Return rates of investments or assets are also determined by the type of assets, maturity date and sometimes other factors such as market forces. However, medium-term investments are known to strike a balance between risk and return. 

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Short-Term Finance, Medium-Term Finance, Long-Term Finance

BUSINESS MANAGEMENT , FINANCE and SOURCES OF FINANCE

Problems with finance happen very often in every business organization. So, a business manager needs to consider different forms of finance by ensuring the cash coming into the business covers the cash going out.

Effective business managers need to pay careful attention to the cash-flow situation of their businesses to deal with short-term, medium-term and long-term needs for finance. 

That is why in a simple way, different sources of business finance are categorized under three categories: short-term finance, medium-term finance and long-term finance.

Here are the following definitions in line with accounting terminology. 

Short-term finance

Definition:  Short term refers to the time period of less than 12 months – the current fiscal year.

Examples:  Examples of external short-term finance include family and friends, overdraft, trade credit, debt factoring and microfinance providers. 

Amount:  Short-term finance deals with rather small amounts of money.

Purpose:  Mainly for Revenue Expenditure. Most short-term finance is used to help a business maintain positive cash flow, and help manage cash-flow problems. It will be used to purchase raw materials, pay wages to production workers, pay trade credit, TAXes, interest on a bank loan, etc. 

Medium-term finance

Definition:  Medium term refers to the time period of more than 12 months but less than five years.

Examples:  Examples of external medium-term finance include hire purchase, leasing and sale-and-leaseback. 

Amount:  Medium-term finance deals with fairly larger amounts of money. 

Purpose:  Mainly for lower Capital Expenditure. Most medium-term finance is used to purchase cheaper Fixed Assets such as machinery, equipment, vehicles, etc. 

Long-term finance

Definition:  Long term, either debt or equity, refers to the time period of more than five years.

Examples:  Examples of external long-term finance include long-term bank loans, mortgage and debentures (bonds). Borrowing for long-term means that the business does not expect to repay this debt in less than five years.

Amount:  Long-term finance deals with very larger amounts of money.

Purpose:  Mainly for higher Capital Expenditure. Most long-term finance is used to purchase expensive Fixed Assets such as land, buildings, assembly lines, etc. The longer the time period, the harder it becomes to plan effectively. Some business activities need huge amounts of money and the business will invest this money over several years, e.g. building a new factory, international expansion, or acquiring or taking over another business. 

Different business organizations consider the length of time differently

It is important to remember that these definitions tend to vary between countries, industries and even businesses. 

What is important is how these definitions link to the overall business aim and business objectives of the business. Firms that are heavily involved in Research and Development (R&D) such as space technology or pharmaceuticals might view the medium term as 10 years, whereas fast-paced industries such as Information Technology (IT) might see five years as relatively long term. 

Therefore, business analysts do not have a common definition for the short-term finance, medium-term finance and long-term finance.

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Hi! I am Jerry. I am the owner and Editor-in-Chief of this website. I am experienced Lecturer and Researcher in Business Management, Head of Business and Economics, and IB Examiner for DP Business Management at International Baccalaureate (IB). I make business education accessible to everyone in the world by providing high-quality business resources for CEOs, directors, business managers, business owners, investors, entrepreneurs, business journalists, business teachers and business students. Privately, I live with my family in China from where I run a vlog Nie Te Chiny about my family life. MORE »

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5 Medium-Term Goals for a Business: Make Money Now

December 15, 2023, developing, setting, and achieving goals in business.

Today, let’s focus on medium-term goals for a business. Because getting business goal setting right means one thing.

And that thing is making more money!

So, I would like to share my favorite examples of medium-term business goals. Also, the traits of good medium-term objectives for businesses.

Then finally, how to develop, set, and achieve your business goals to ensure success.

The success of what? Your business of course. So, let’s get started…

examples of medium-term goals for a business

Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.

5 Examples Of Medium-Term Goals For A Business

Here are 5 examples of medium-term business goals. That every business should consider implementing as part of a business plan.

  • Increase market share
  • Develop a new product or service
  • Reduce costs
  • Implement an employee program
  • Increase shareholder value

They are perfect for your mid-term planning of business activities. So, we will discuss each of these business goals in more detail in a moment.

But first, let’s define exactly what a medium-term business goal is.

What Are Medium-Term Goals For A Business?

First of all, a goal is a desired outcome. In this case, the outcome is related to your business.

Furthermore, business goals should be time-based. In the case of medium-term business goals, they should be achievable within one to five years.

Finally, medium-term business goals go by several different names. Those names are:

  • Intermediate-term goals for business
  • Mid-term business goals
  • Mid-range business goals
  • 5-year business goals

So, do not let the different names throw you. They all refer to the same thing.

Specifically, today’s topic: medium-term goals for a business.

Next, let’s talk a little more about some of my favorite examples of mid-term business goals.

5 medium-term business goals

Medium-Term Goals For A Business: Example #1 – Increase Market Share

Our first small business goal. Or, big business for that matter. Is to increase market share.

First of all, market share is the portion of total sales that a business controls of a particular market.

A market can be defined very broadly. For example, an entire industry.

Or it can be defined narrowly. Such as a single product or product line.

Regardless, the market indicates the revenue opportunity for a business. And their share suggests how successful the company is at penetrating its target market.

There are a variety of ways to increase market share. Some examples include:

  • Decreasing prices
  • Increasing advertising
  • Improving product performance
  • Acquiring competitors

But a word of caution is in order. Because increasing market share almost always comes with a cost.

Thus, your business analysis must indicate a higher market share means either higher profit now. Or, higher profits in the future.

Since there is little reason to grow market share. If it doesn’t increase profits either in the short term. Or, in the long-term.

Finally, grabbing up market share is a great approach. Especially for businesses with a low-cost structure . Operating in a highly fragmented market.

Here is another productive mid-range goal for a business…

Medium-Term Goals For A Business: Example #2 – Develop A New Product Or Service

Innovation and the development of new products and services are important for all businesses. Because it is unwise to stand still.

Offer the same products and services year after year? Then sooner or later your competitors will catch you.

So, look for ways to test the boundaries of what you do today. Some ways to innovate include:

  • Add a new feature to an existing product
  • Analyze your competitor’s products
  • Take note of customer feedback
  • Probe your suppliers for ideas

On the other hand, don’t stray too far from your core competencies. Because innovation has a cost.

And sometimes the biggest cost is this. Distraction from what you do well. And what makes money today.

That’s why it is important to have a well-defined value proposition. This just means you are clear on your target markets and customers.

And exactly how you can serve those markets and customers better. Through innovation.

Here is another one of my favorite intermediate-term goals for business…

Medium-Term Goals For A Business: Example #3 – Reduce Costs

Every business should strive to be more cost-efficient. But this doesn’t necessarily mean being the low-cost producer in your industry or business.

So, make your business’s cost structure consistent with its business strategy.

For example a high-end producer of fashionable women’s clothes. Will not produce at a lower cost than a company making generic sweat pants.

So look at your toughest competitors. And set a medium-term business goal to be lower cost.

In other words, be the low-cost producer. Relative to your competition.

You may even want to consider relocating to a low-tax state . So your business keeps. More of the money it makes.

Notice that most small businesses have goals that require money. Or investment associated with them.

So, by reducing costs. You may be able to fund some of your other business goal initiatives.

Here’s another suggestion to reduce costs. Because if you make online purchases. Then save money on everything you buy with Rakuten. 

Rakuten offers electronic cash rebates for buying things you need anyway!  So, it is money in your business’s pocket!

You can learn about Rakuten here . Plus, it works fine for any personal purchases you make too.

Next up in our examples of mid-term business goals? Your employees.

Medium-Term Goals For A Business: Example #4 – Implement An Employee Program

A successful business will grow over the medium-term goal-setting time frame. As it does, employees and their contributions become more important.

This means having an effective employee program. This is an important mid-term business goal. And one of many great examples of business investments that you can make.

A good employee program should be comprehensive. And this doesn’t happen instantly. That’s why effective employee programs are good mid-term business goals.

Here are some elements you may want to include in an employee program:

Hiring: Finding the best talent and fit for your business.

Onboarding: Bringing new employees on in a welcoming and productive manner.

Training and development: Putting processes in place to make staff better and more productive. There are many potential career goals examples you can assist them to achieve.

To make them better and more productive employees.

Incentives: Setting up the right financial and non-financial rewards.

Satisfaction: Keeping them happy and building a great culture of teamwork.

Retention: Making sure the best employees stick around for the long term.

Make these types of important employee development activities part of each manager’s performance goals .

Okay. Here’s the last example of a medium-term business goal…

Medium-Term Goals For A Business: Example #5 – Increase Shareholder Value

Most businesses exist for 1 reason. That reason is to increase shareholder value. Or, put another way, increasing the overall value of a business.

Furthermore, shareholder value encompasses all of the things we have discussed so far. Plus, many more. For example, the cash flow your business produces .

How do you measure shareholder value? Simply put, it’s whatever a 3 rd party is willing to pay for your business.

How do you increase shareholder value? Well, mainly by running your business better every day.

More specifically, here are some elements that increase shareholder value:

  • Unique products
  • Proprietary processes
  • Current profits
  • Expectations for future profit growth
  • Smart business outsourcing
  • Experienced management
  • Talented employees
  • Utilization of technology
  • Operating in a business-friendly state
  • Valuable real estate

Knowing what increases the value of businesses in your industry is key. Then pursue those things effectively.

Many other intermediate goals for a small business will surface here . To further your business planning efforts.

And, in the event, you sell your business someday.  You want the value to be as high as possible.

You also want to make sure your personal finances are separate from your business finances. So, I use Personal Capital to pull all of my personal finances together in 1 place online.

It’s a great tool. And best of all Personal Capital is free to sign up and use.

You can learn more about Personal Capital here .

Okay. That concludes our discussion about some of my favorite 1-5 year business goals.

Next, I want to share a few other important points on the topic of business goal setting.

types of business goals

Short-Term Goals Vs. Mid-Term Goals For A Business

As I mentioned earlier, a business goal should be time-based. And medium-term business goals examples should be accomplished within 1 to 5 years.

In contrast, the best short-term business goals should be completed within 1 year. And be focused on 1 of 2 things.

First, solving serious business problems. They make for great short-term goals.

For example, if your on-time delivery record is 85%. And you are losing business. Because all of your competitors are offering customer service running 99% on-time delivery.

Then set a short-term goal to get your on-time delivery fixed.

In addition, good short-term goals are useful for creating a foundation for long-term success .

For example, every business should have a business plan. So, set a short-term goal to create a long-term business plan .

Long-Term Goals Vs. Intermediate-Term Goals For A Business

So now you know that short-term business goals should be completed within a year. And medium-term business goals should be completed within 1-5 years.

This leads us to what? Long-term business goals . Plan to complete these goals in more than 5-years.

So long-term business goals are those challenging outcomes. That will take many years to achieve.

Plus require having a solid plan in place. To achieve the long-term goal.

Let’s go back to market share. And use it as an example.

Perhaps your business has a 10% market share. And you have set a goal to increase to 20% in 3 years.

So, based on the time frame. This is a medium-term business goal.

But you can also make a long-term goal out of it. How about dominating your market and achieving a 55% market share.

You know that will take a long time to accomplish. So make achieving 55% market share a long-term business goal.

Here’s another business goal-setting topic I want you to know about…

Make Your Intermediate-Term Goals For Business Balanced

achieving goals in business

As you work through the intermediate goals for a business. Make sure to keep your goals balanced.

In other words, your business goals should be well-rounded. Because if you are like me, you want your business to make more money.

So, it’s easy to fall into the trap of making all of your business goals financial in nature .  Don’t do that.

Make your business goals balanced. To do so, consider the balanced scorecard approach.

The Balanced Score Card For Business Goal Setting

The balanced scorecard suggests your business goals should encompass the following 4 categories:

  • Customer-facing
  • Internal processes
  • Innovation, growth, and development

Let’s see how I did with the 5 goals I suggested.

Business Goal #1: Increase market share. This is a customer satisfaction oriented business goal.

Business Goal #2: Develop a new product or service. This goal is about innovation. And also meeting customer needs better.

Business Goal #3: Reduce costs. This is one of many potential financial goals . But its elements will encompass internal processes too.

Business Goal #4: Implement an employee plan. This involves both internal processes. And growth and development.

Business Goal #5: Increase shareholder value. Our last medium-term goal example is a financial goal.

Next, I want to talk about some other important aspects. That each of your goals should possess.

How To Set Mid-Term Business Goals

setting business goals: SMART system

Setting the best business goals is not that different from setting other goals in life.

Yes. The outcomes are different. But the goal-setting process should be the same.

SMART Goals

Goal setting for business owners means using the SMART goal setting system. It is the process I recommend.

SMART goals should be :

Specific. Be as detailed as possible when establishing your goals. Define the exact outcome you want to achieve.

Measurable. Determine how you will measure success. Then make your goals measurable. So you will know when your company has arrived at the outcome you desire.

Achievable. Don’t waste your time setting goals that aren’t achievable.

Yes. You want to stretch yourself. But, don’t overdo it.

Realistic. A goal may be achievable. But it may not be realistic.

For example, developing a new product may be achievable. But if it will take $100,000. And your business can not afford that amount. Then the goal is not realistic.

Time-Bound. Finally, every goal should have a deadline. For when it must be completed.

For medium-term business goals. We already know the deadline should be within 1 to 5 years.

Next, how to achieve business goals.

How To Achieve Medium-Term Business Goals

key performance measures

To achieve your business goals. I suggest a few simple steps.

Write Down Your Business Goals

First, write them down.

Studies have shown goals that are written. Have a much higher success rate. Versus goals that are not documented in writing.

The SMART goal-setting system will help you here. Go through each SMART goal requirement. And write down the results of your efforts as you go.

Make A Plan For Each Business Goal

Because medium-term business goals take more than a year to complete. They tend to be more involved.

Having a plan will increase the odds of success. Just pick up where you left off when documenting your goals using the SMART system.

Some things to include in your goal planning are:

Accountability. What employees are responsible for achieving the goals .

Milestones. Determine how you will know if you are on track. By establishing interim progress check-points.

Furthermore, start on goals at an early stage . Right after they are set. And monitor performance throughout.

Resources. Determine who needs to be involved. And if any out-of-pocket costs are necessary.

When it comes to resources. It’s important to note that some goals may require outside funds

 So, if you need financing. Consider a small business loan.

Set Key Performance Indicators (KPIs) For Your Goals

KPIs are performance measurements. They can be financial. Or, KPIs can be non-financial too.

They measure important business activities. Also, they indicate the results of your employee’s efforts.

What type of activities and efforts? Specifically, those tasks and efforts that deliver results for the business goals you desire to achieve.

For example, if increasing market share by 5% is the goal. Perhaps you determine that 10 extra sales calls per week for the next two years will accomplish the outcome.

So, the KPI is sales calls. Then be sure to measure and report the number of sales calls every week.

Since the benefits of forecasting and measuring results . Can not be underestimated.

Okay. That’s it for today.

We have covered a lot. So, let’s wrap up with a summary.

Summary: Goals For Business Examples & How To Set Them

A medium-term business goal is a desired outcome to be accomplished within 1 to 5 years.

They are contrasted with short-term business goals. Those goals to be achieved within 1 year.

And long-term business goals. They require more than 5-years to complete.

Then we have 5 good medium-term objectives examples for a business:

Furthermore, your business goals. Or any type of goal for that matter should be a SMART goal.

A SMART goal is:

Finally, to achieve your goals:

  • Write your goals down
  • Create a plan
  • Establish and measure KPIs

Now it’s time to get to work on your medium-term goals for a business.

More Reading About Setting And Achieving Goals

  • All of our business and personal finance articles
  • Best financial goals to hit by 40
  • Top financial planning tips before 50

Some Of My Favorite Finance Resources

I mentioned several resources throughout the article. They are helpful for attaining both your individual financial goals. And your business goals.

So, I summarized them here for your convenience.

  • Get cash back on your online purchases with Rakuten
  • Manage all your money with Personal Capital

conclusions about business planning

Author Bio : Tom Scott founded the consulting and coaching firm Dividends Diversify, LLC. He leverages his expertise and decades of experience in goal setting, relocation assistance, and investing for long-term wealth to help clients reach their full potential.

Medium-Term Goals For A Business

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OpenAI teases an amazing new generative video model called Sora

The firm is sharing Sora with a small group of safety testers but the rest of us will have to wait to learn more.

  • Will Douglas Heaven archive page

OpenAI has built a striking new generative video model called Sora that can take a short text description and turn it into a detailed, high-definition film clip up to a minute long.

Based on four sample videos that OpenAI shared with MIT Technology Review ahead of today’s announcement, the San Francisco–based firm has pushed the envelope of what’s possible with text-to-video generation (a hot new research direction that we flagged as a trend to watch in 2024 ).

“We think building models that can understand video, and understand all these very complex interactions of our world, is an important step for all future AI systems,” says Tim Brooks, a scientist at OpenAI.

But there’s a disclaimer. OpenAI gave us a preview of Sora (which means sky in Japanese) under conditions of strict secrecy. In an unusual move, the firm would only share information about Sora if we agreed to wait until after news of the model was made public to seek the opinions of outside experts. [Editor’s note: We’ve updated this story with outside comment below.] OpenAI has not yet released a technical report or demonstrated the model actually working. And it says it won’t be releasing Sora anytime soon. [ Update: OpenAI has now shared more technical details on its website.]

The first generative models that could produce video from snippets of text appeared in late 2022. But early examples from Meta , Google, and a startup called Runway were glitchy and grainy. Since then, the tech has been getting better fast. Runway’s gen-2 model, released last year, can produce short clips that come close to matching big-studio animation in their quality. But most of these examples are still only a few seconds long.  

The sample videos from OpenAI’s Sora are high-definition and full of detail. OpenAI also says it can generate videos up to a minute long. One video of a Tokyo street scene shows that Sora has learned how objects fit together in 3D: the camera swoops into the scene to follow a couple as they walk past a row of shops.

OpenAI also claims that Sora handles occlusion well. One problem with existing models is that they can fail to keep track of objects when they drop out of view. For example, if a truck passes in front of a street sign, the sign might not reappear afterward.  

In a video of a papercraft underwater scene, Sora has added what look like cuts between different pieces of footage, and the model has maintained a consistent style between them.

It’s not perfect. In the Tokyo video, cars to the left look smaller than the people walking beside them. They also pop in and out between the tree branches. “There’s definitely some work to be done in terms of long-term coherence,” says Brooks. “For example, if someone goes out of view for a long time, they won’t come back. The model kind of forgets that they were supposed to be there.”

Impressive as they are, the sample videos shown here were no doubt cherry-picked to show Sora at its best. Without more information, it is hard to know how representative they are of the model’s typical output.   

It may be some time before we find out. OpenAI’s announcement of Sora today is a tech tease, and the company says it has no current plans to release it to the public. Instead, OpenAI will today begin sharing the model with third-party safety testers for the first time.

In particular, the firm is worried about the potential misuses of fake but photorealistic video . “We’re being careful about deployment here and making sure we have all our bases covered before we put this in the hands of the general public,” says Aditya Ramesh, a scientist at OpenAI, who created the firm’s text-to-image model DALL-E .

But OpenAI is eyeing a product launch sometime in the future. As well as safety testers, the company is also sharing the model with a select group of video makers and artists to get feedback on how to make Sora as useful as possible to creative professionals. “The other goal is to show everyone what is on the horizon, to give a preview of what these models will be capable of,” says Ramesh.

To build Sora, the team adapted the tech behind DALL-E 3, the latest version of OpenAI’s flagship text-to-image model. Like most text-to-image models, DALL-E 3 uses what’s known as a diffusion model. These are trained to turn a fuzz of random pixels into a picture.

Sora takes this approach and applies it to videos rather than still images. But the researchers also added another technique to the mix. Unlike DALL-E or most other generative video models, Sora combines its diffusion model with a type of neural network called a transformer.

Transformers are great at processing long sequences of data, like words. That has made them the special sauce inside large language models like OpenAI’s GPT-4 and Google DeepMind’s Gemini . But videos are not made of words. Instead, the researchers had to find a way to cut videos into chunks that could be treated as if they were. The approach they came up with was to dice videos up across both space and time. “It’s like if you were to have a stack of all the video frames and you cut little cubes from it,” says Brooks.

The transformer inside Sora can then process these chunks of video data in much the same way that the transformer inside a large language model processes words in a block of text. The researchers say that this let them train Sora on many more types of video than other text-to-video models, varied in terms of resolution, duration, aspect ratio, and orientation. “It really helps the model,” says Brooks. “That is something that we’re not aware of any existing work on.”

“From a technical perspective it seems like a very significant leap forward,” says Sam Gregory, executive director at Witness, a human rights organization that specializes in the use and misuse of video technology. “But there are two sides to the coin,” he says. “The expressive capabilities offer the potential for many more people to be storytellers using video. And there are also real potential avenues for misuse.” 

OpenAI is well aware of the risks that come with a generative video model. We are already seeing the large-scale misuse of deepfake images . Photorealistic video takes this to another level.

Gregory notes that you could use technology like this to misinform people about conflict zones or protests. The range of styles is also interesting, he says. If you could generate shaky footage that looked like something shot with a phone, it would come across as more authentic.

The tech is not there yet, but generative video has gone from zero to Sora in just 18 months. “We’re going to be entering a universe where there will be fully synthetic content, human-generated content and a mix of the two,” says Gregory.

The OpenAI team plans to draw on the safety testing it did last year for DALL-E 3. Sora already includes a filter that runs on all prompts sent to the model that will block requests for violent, sexual, or hateful images, as well as images of known people. Another filter will look at frames of generated videos and block material that violates OpenAI’s safety policies.

OpenAI says it is also adapting a fake-image detector developed for DALL-E 3 to use with Sora. And the company will embed industry-standard C2PA tags , metadata that states how an image was generated, into all of Sora’s output. But these steps are far from foolproof. Fake-image detectors are hit-or-miss. Metadata is easy to remove, and most social media sites strip it from uploaded images by default.  

“We’ll definitely need to get more feedback and learn more about the types of risks that need to be addressed with video before it would make sense for us to release this,” says Ramesh.

Brooks agrees. “Part of the reason that we’re talking about this research now is so that we can start getting the input that we need to do the work necessary to figure out how it could be safely deployed,” he says.

Update 2/15: Comments from Sam Gregory were added .

Artificial intelligence

Ai for everything: 10 breakthrough technologies 2024.

Generative AI tools like ChatGPT reached mass adoption in record time, and reset the course of an entire industry.

What’s next for AI in 2024

Our writers look at the four hot trends to watch out for this year

  • Melissa Heikkilä archive page

Google’s Gemini is now in everything. Here’s how you can try it out.

Gmail, Docs, and more will now come with Gemini baked in. But Europeans will have to wait before they can download the app.

Deploying high-performance, energy-efficient AI

Investments into downsized infrastructure can help enterprises reap the benefits of AI while mitigating energy consumption, says corporate VP and GM of data center platform engineering and architecture at Intel, Zane Ball.

  • MIT Technology Review Insights archive page

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China's central bank leaves key policy rate unchanged under shadow of the Federal Reserve

China's central bank left a key policy rate unchanged as expected on Sunday when rolling over maturing medium-term loans, with uncertainties around the timing of an easing by the Federal Reserve limiting Beijing's room to maneuver on monetary policy.

Beijing is striking a delicate balancing act to support the economy at a time when signs of persistent  deflationary pressure  call for more stimulus measures. But any aggressive monetary movement risks reviving depreciation pressure on the Chinese currency and capital outflows.

With investors now pushing back the start of the Fed monetary easing to at least the middle of the year from March, following the latest U.S.  data , traders and analysts expect China could hold back rolling out imminent stimulus.

The People's Bank of China, or PBOC, said it was keeping the rate on 500 billion yuan ($69.51 billion) worth of one-year medium-term lending facility, or MLF, loans to some financial institutions unchanged at 2.50% from the previous operation.

Sunday's operation was meant to "maintain banking system liquidity reasonably ample," the central bank said in an online statement.

Deposit rate cuts from China banks may be a 'precursor' to lending rates being cut, says Jefferies

In a Reuters  poll  of 31 market watchers, 22, or 71%, of all respondents expected the central bank to keep the borrowing cost of the one-year MLF loans unchanged on Feb. 18.

With 499 billion yuan worth of MLF loans set to expire this month, the operation resulted a net 1 billion yuan fresh fund injection into the banking system.

Chang Wei Liang, FX & credit strategist at DBS, said the steady MLF rate comes as "policymakers' preference to anchor the yuan and limit negative rate differentials with the U.S. dollar."

Still, some investors and market watchers have ramped up their bets of more monetary easing measures in coming months to support the world's second largest economy after the central bank delivered a deep  cut  to bank reserves earlier this month.

The PBOC said in its latest monetary policy implementation report that it would keep policy flexible to boost domestic demand, while maintaining price stability.

"We continue to expect two rounds of rate cuts in Q1 and Q2, with 15 basis points each to both the open market operations and MLF rates," Ting Lu, chief China economist at Nomura, said in a note ahead of the loan operation.

He added that the latest round of easing measures, including an earlier-than-expected reserve requirement ratio cut, "failed to stabilize market sentiment".

The central bank-backed Financial News, reported on Sunday citing market watchers that the benchmark loan prime rate, or LPR, could fall in coming days, with five-year tenor more likely to be reduced.

"Lowering five-year LPR will help stabilize confidence, promote investment and consumption, and also help support the stable and healthy developments of the real estate market," the newspaper said on its official WeChat account soon after the MLF rate decision.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. The monthly fixing of the LPRs is due on Feb. 20.

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IMAGES

  1. Medium-Term Management Plan|Sojitz Corporation

    medium term planning business definition

  2. Why You Need Mid-Term Goals And How To Plan Them

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  3. Medium-Term Management Plan 5th Medium-Term Management Plan

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  4. Strategic Planning Cycle as a graphic illustration free image download

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  5. Medium-term Management Plan

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  6. English Medium Term Planning Overview- Year 3

    medium term planning business definition

VIDEO

  1. #24 Planning || Features of Planning

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  4. Strategic Planning: Business Plan in 1 Minute

  5. Medium-term Budget Speech

  6. DIFFERENCE BETWEEN LONG-TERM AND SHORT-TERM PLANNING ( CESC)

COMMENTS

  1. Short-Term, Medium-Term & Long-Term Planning in Business

    Medium-term planning implements policies and procedures to ensure that short-term problems don't recur. Long-Term Planning In the long term, companies want to solve problems...

  2. Short-Term, Medium-Term & Long-Term Planning in Business

    Medium-term planning covers goals that are near enough to plan, but far enough to unfold in unforeseen ways. Long-term planning is an expression of your company's vision, and its overall mission and purpose.

  3. Why Medium-Term Planning Works

    The medium-term is where companies are shaped. In this Harvard Business Review webinar, Dominic Houlder and Nandu Nandkishore of the London Business School describe why the...

  4. What Is MTP in Project Planning?

    MTP meaning medium-term plan or planning is one of the key steps in project management. As an action plan, it bridges the gap between short-term goals that can be achieved quickly and...

  5. All Hail Medium-Term Planning

    The short term is a free-for-all and the long term is just a dream. ... All Hail Medium-Term Planning ... Nandu Nandkishore is an Executive Fellow at London Business School. Previously he was an ...

  6. Business planning: Short, medium and long-term objectives

    Medium-term objectives are generally those that relate to a period from 18 months to three years or sometimes five years (whichever is appropriate for the organisation and people setting the objectives). These objectives will therefore be broader, can be reviewed and may need to be amended with time.

  7. The differences between long-term and short-term planning

    Table of Contents What are long-term and short-term planning? What is short-term planning? What is long-term planning? What is medium-term planning? Key differences between long-term and short-term planning The difference between long-term and strategic planning How to set long-term goals in 5 steps Step 1: Define your vision

  8. Medium Term: Definition in Investment Time Periods

    Chip Stapleton Fact checked by Kirsten Rohrs Schmitt What Is Medium Term? Medium term is a holding period or investment horizon that is intermediate in nature. The exact period of time that is...

  9. The Key Differences Between Short-Term and Long-Term Planning

    Short-term planning is a process that businesses use to create a roadmap for achieving specific goals within a specific timeframe. This process generally covers a period of time ranging from six months to one year. The goal of short-term planning is to identify the steps that need to be taken in order to achieve the desired objectives.

  10. Key Differences Between Short-Term and Long-Term Planning

    Examples of medium-term business goals Medium-term business goals come in many forms. For example, if your company is facing quality issues (short-term, high-priority problems), you may implement employee training courses. These courses remedy the issue for the time being, but you plan to come up with a more solid solution to ensure the quality ...

  11. Long-Term Planning Vs. Short and Medium

    What Is Medium-Term Planning? Medium-term planning entails strategies that focus on permanent solutions to short-term concerns. It's the implementation of policies and procedures to ensure short-term problems do not recur. Time Frame for Medium-Term Planning: 1-3 years Examples of initiatives include:

  12. Planning: Meaning, Benefits, Types and Typical Components

    Medium-term planning involves making plans for the business's mid-term future. Typically medium-term planning is making plans for what may occur in the next two to five years. The plans often involve using resources the business intends to have in the future. Making plans for purchasing new materials or changing production methods are some ...

  13. Examples of Medium-Term Goals (With Definition and Tips)

    Updated November 22, 2022 Medium-term goals are goals you plan to achieve within five to 10 years. Regardless of your profession and background, setting medium-term goals can help you plan your future success and stay motivated. Learning about some medium-term goals can inspire you to create some for your own personal and professional development.

  14. The Key Differences Between Short- and Long-Term Planning

    Short-term planning is defined by the characteristics of an organization, such as skills. In the workplace, managers devise strategies on how to improve these characteristics in the short-term to meet long-term goals.

  15. Long-range Planning: A Complete Guide To Everything You Need To Know

    In this blog, the long-range planning definition refers to those longer-term actions necessary to implement long-range strategic planning. These actions usually have a time horizon of more than three years. The focus of tactical planning is the short-term or, at most, the medium-term. Plans are funded by the current budget and intended to help ...

  16. Investment Time Horizon: Definition and Role in Investing

    Time Horizon: A time horizon is the length of time over which an investment is made or held before it is liquidated. Time horizons can range from seconds, in the case of a day trader , all the way ...

  17. Short, Medium and Long-Term Goals: Making Business Planning Effective

    Medium-term goals. Medium-term goals are designed to take anywhere between several months and five years to reach completion. It's common for medium-term planning to be overlooked when it comes to discussing strategic objectives. However, it is important to clarify the shorter-term objectives with the depth of long-term planning. While short ...

  18. The importance of planning horizons and review meetings

    The main aim of operational planning is to balance demand and supply. The focus is on load balancing, shift schedules, batch size optimization, short-term promotions, stock expiry date issues, and supply adjustments. The time horizon for this tends to be 1 - 12 weeks and with a review meeting frequency of 1-2 times a week.

  19. Medium-term Definition & Meaning

    : lasting for a period of time that is neither long nor short Our short-term prospects are grim and our medium-term prospects are uncertain, but our long-term prospects are good. Examples of medium-term in a Sentence

  20. Medium Term (Investments)

    A Medium-term is a term used in investment to describe an investment holding period of between 1 to 3 years. The time horizon in a medium-term investment is intermediate, the investor is expected to receive the return on investment and the initial capital within 1 to 3 years. Sometimes, a medium-term investment can last up to five years ...

  21. Short-Term Finance, Medium-Term Finance, Long-Term Finance

    Definition: Medium term refers to the time period of more than 12 months but less than five years. Examples: Examples of external medium-term finance include hire purchase, leasing and sale-and-leaseback. Amount: Medium-term finance deals with fairly larger amounts of money. Purpose: Mainly for lower Capital Expenditure.

  22. The importance of medium term planning

    The importance of medium term planning — Emma Cate Teaching — Emma Cate (@emmccatt) June 28, 2020 Prior learning should be taken into account. This is where the whole school LTP should be referred to. Key skills should be explicitly thought about, as well as how prior skills can be built upon. As above but with knowledge.

  23. 5 Medium-Term Goals for a Business: Make Money Now

    Medium-Term Goals For A Business: Example #1 - Increase Market Share. Our first small business goal. Or, big business for that matter. Is to increase market share. First of all, market share is the portion of total sales that a business controls of a particular market. A market can be defined very broadly.

  24. OpenAI teases an amazing new generative video model called Sora

    OpenAI has built a striking new generative video model called Sora that can take a short text description and turn it into a detailed, high-definition film clip up to a minute long.. Based on four ...

  25. China's central bank leaves key policy rate unchanged under ...

    The People's Bank of China, or PBOC, said it was keeping the rate on 500 billion yuan ($69.51 billion) worth of one-year medium-term lending facility, or MLF, loans to some financial institutions ...