long term planning in business definition

Long-Term vs Short-Term Planning: Key Differences and Strategies

Throughout history, whether a society focuses on long-term or short-term planning often decides its fate. Those who look ahead tend to keep their culture strong and their society together better than those who only think about immediate gains.

From war generals to founding fathers, this sentiment has been captured in many eloquent ways. Including when Sun Tzu said in The Art of War, “ The general who loses a battle makes but few calculations beforehand .” Or when Benjamin Franklin famously stated, “ If you fail to plan, you are planning to fail .”

One of these men conquered nations, and the other helped to build one. The fact that they both credit strategic planning as one of the essential ingredients for their success merits a closer look from any leadership team at what these processes entail.

You’ll discover that effective workforce planning is an art form as much as a science. And just as history shows us, getting that chemistry right sets the winners apart from the…well, you know.

This article will help you understand the art of planning within your organization. We’ll define what short-term and long-term planning entails, break down key differences between the two, and discover strategies for implementing each in a balanced way. Let’s begin.

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Difference between long-term and short-term planning.

The most distinct difference between long-term and short-term planning is the time frame .

Long-term planning looks at a three to five-year period or even longer; short-term planning covers up to a year. 

This profoundly impacts the goals, KPIs, and projects an organization will choose during each process. That being said, when short-term and long-term planning are leveraged correctly, they always work towards the same vision.

Long-term planning 

Long-term planning determines your organization’s goals in the next five to ten years. Think big. What sustainability, growth, and innovation approach will secure your competitive edge and ensure future relevance? When mapping out your plan, how can you consider market trends, potential disruptions, and strategic opportunities? 

A thorough analysis of your business environment will help you uncover objectives and specific business strategies that align with your organization’s values and vision. Then, by setting relevant Key Performance Indicators (KPIs), you can measure your progress towards them.

Short-term planning 

The goal of short-term planning is to prepare businesses for the near future. It typically includes less than a year and focuses on short-term solutions that serve the organization’s day-to-day needs. 

This planning process is also dynamic by nature and requires constant adjustments. Your focus should be on managing resources, executing projects, and getting quick wins to spur momentum for the organization.

The art of planning

Organizations often need help reconciling the needs of their short-term and long-term plans. This could mean they’re focusing too much on one and not the other. Or that the goals being set are simply in contention with one another.

The art of planning is balancing both short-term and long-term goals, resource allocation, KPIs, and more. Your organization might be subject to changing market dynamics, unforeseeable challenges, and new technologies. You have to stay nimble in the short term without losing sight of the long term. It’s a delicate balancing act.

But according to a study by McKinsey & Company , it’s effective. Organizations that take this balanced approach experience 47% higher revenue growth and 36% higher profitability than companies that focus predominantly on one type of planning over the other. 

Let’s dive a little deeper into the art of planning so you can learn how to implement this balancing act in your own organization.

Time frames in planning

Let’s begin by defining their scope to understand the planning processes better.

Long-term planning time frames

Long-term planning typically covers three to five years but can span as far as decades. Companies will want to consider more significant projects with longer time horizons during this stage in the planning process.

Short-term planning time frames

Short-term planning covers a period of up to one year and is often broken down into quarterly, monthly, and even daily actionable goals and KPIs.

Bridging the gap with medium-term planning

Medium-term planning is another essential function bridging the gap between the immediate actions defined in short-term planning and the blue-sky ambitions of long-term goals.

This type of planning focuses on implementing strategies and initiatives that ensure short-term fixes are not just temporary patches to more significant problems.

For example, an organization might solve a software issue with a quick fix in the short term but secure a service contract with an IT company to receive ongoing maintenance and regular updates as a medium-term approach.

Long-term vs. short-term goals

Long-term goals help to chart a path toward your organization’s future vision. They’re broad and ambitious by nature and include projects such as expanding into new markets, establishing partnerships, and investing in product development. They’re also set over a longer time horizon than short-term goals and often face more risk and uncertainty.

Short-term goals , on the other hand, are about continued progress. When leveraged correctly, they establish momentum for the organization through quick wins and act as stepping stones from short-term success to achieving long-term goals.

Long-term planning in business

Long-term planning takes your organization out of the day-to-day hustle and into the future. Successful organizations start this process with a crystal clear vision in mind. As Jeff Bezos once said, “ Be stubborn on the long-term vision but flexible on the details .” Now, how do you begin thinking about those details? First, you have to be able to see the forest for the trees. 

That’s why strategic analysis should form the foundation of your long-term planning process. Here’s what that should look like:

• PESTEL and SWOT can help you analyze the external market environment and your internal capabilities. 
• Then, you can leverage this data to begin setting objectives for your organization in alignment with your vision. 
• After that, establishing the right KPIs will help you measure your progress and develop short-term goals that keep you on track for achieving these broader objectives. 

Let’s look at an example of how a PESTEL and SWOT analysis can be effective in long-term goal setting.

PESTEL Analysis Example

We’ll use a fictional technology company called Flowbar in this example. Imagine Flowbar is exploring expansion into a new market and needs to understand the macro-environmental factors. A PESTEL analysis would be the perfect tool. 

• P olitically, they would assess the stability of markets and government regulations.
• E conomically, they would look at economic growth, currency exchange rates, and consumer purchasing power.
• S ocially, they might examine cultural attitudes toward technology, digital literacy, and consumer behaviors.
• T echnologically, factors such as the availability of the proper infrastructure would be necessary.
• E nvironmentally, Flowbar should assess regulations and public sentiment towards sustainability practices in their industry.
• L egally, they would review intellectual property laws, data protection regulations, compliance requirements, and the company’s quality control program.

SWOT Analysis Example

In this example, we’ll continue with Flowbar.

• Strengths: This could include Flowbar’s strong brand recognition in current markets and its competitive R&D capabilities.
• Weaknesses: Flowbar will need a more comprehensive understanding of local culture and consumer preferences. Their product offering may also need to be more well-suited to their domestic market, causing a lack of product-market fit in new regions.
• Opportunities: Rapidly growing economies and new available partnerships are potential opportunities for Flowbar when entering these new markets.
• Threats: Flowbar should know the competitive and regulatory landscape in the new markets they hope to enter.

After conducting a PESTEL and SWOT analysis, Flowbar will want to ensure any set goals align with its vision and establish clear KPIs for measuring its success.

Short-term planning and its impact

When done correctly, short-term planning addresses the organization’s immediate business needs and challenges while keeping sight of the long-term vision. It involves setting daily, monthly, and quarterly goals that create momentum for the organization and act as stepping stones toward longer-term goals. 

A recommended framework for setting practical short-term goals is SMART goal setting . 

SMART is an acronym that describes the five essential components of a practical goal.

Let’s take a look at what they are:

• S pecific: Being clear and detailed will help you focus resources and achieve desired outcomes.
• M easurable: Having KPIs tied to your goals allows you to effectively track your progress towards achieving them.
• A chievable: Setting realistic and attainable goals will motivate your teams and increase momentum across the organization.
• R elevant: Short-term goals should always connect to your organization’s long-term objectives. 
• T ime-bound: A precise timeline is crucial for prioritizing tasks and resources and creating a sense of urgency. 

Now that we’ve defined SMART goal setting, let’s look at a real-world example of how to use this framework properly.

Examples of SMART goals

Imagine you’re a software company’s marketing manager wanting to increase monthly product page traffic. A SMART goal would look something like this: 

Increase monthly traffic to the product page by 10% over the next quarter.  

This goal is specific, measurable with standard analytical tools, achievable, relevant to a longer-term goal of increasing market share, and set over a clear time frame of one quarter. 

The SMART framework can be helpful for all kinds of organizations with goals. And now that you’re familiar with how to use it, you’re ready to begin setting short-term goals in your own business.

Balancing long-term and short-term planning

So far, we’ve laid out the difference between a short-term and long-term objective and analyzed the best practices for each. But how do you maintain a balance when implementing them into your organization?

Here are a few well-loved strategies: 

• Ensure you align the short-term business goals with the long-term objectives and desired outcomes. Failing to do so would result in misallocating time and other precious resources. 
• Be flexible. The market changes on a day-to-day basis. Short-term goals should remain Agile and adaptable without losing sight of the longer-term goals they’re working towards. 
• Regularly review and re-prioritize based on stakeholder alignment and available resources. 
• Foster a culture that values and understands the relationship between short-term and long-term goals.

By implementing these strategies, organizations not only achieve successful results in the short term but also lay the groundwork for sustained growth toward their future vision.

Let’s wrap it up

It’s clear at this point that understanding and balancing long-term objectives and short-term planning is vital for achieving success within your organization. And whether it’s Sun Tzu or Jeff Bezos, we’re not the only ones who think so.

By bringing the art of planning into your organization, you can build momentum toward your long-term goals and vision. The result will be a lasting legacy that puts you on the right side of history’s great strategic organizations.

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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.

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.

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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The Differences Between Long-Term and Short-Term Planning

Table of Contents

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 objectives. 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.

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 short period of time, 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 a new marketing course”, “Pass the AP Statistics exam.”
• Personal development goals : “Start going to bed before midnight”, “ Track your time for a month”, “Read 20 pages a day.”
• 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 achieve 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 : “Read more books”, “See the 7 wonders of the world.”
• 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 to success. As opposed to that, short-term planning is often quite straightforward. Short-term goals usually serve as milestones achieved in a short period of time 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 respond to changes in the environment with success;
• 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 see how 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 objectives, 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. Your objectives 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, whether short or long-term.

• 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 see where you stand and 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 reach success and 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 new 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, read a lot, 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. You may develop new aspirations, or simply give up on a goal.

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.

Adjust your goals and reach them faster — with Clockify

Your goals are arguably one of the most important aspects of your life.

However, most people struggle to stick to a goal because they encounter various obstacles, such as a lack of motivation or fear of failure.

A time tracking system like Clockify dispels all the fear and infuses you with motivation. 

Well, suppose you’ve got a complex project on your hands. In that case, you can create milestones in Clockify to make your project more achievable — and less daunting. 

Here’s what your project timeline looks like, with dates, assignees, and projects:

To create a milestone, follow these steps:

• Click on the phase/date where you’d like to set your milestone,
• Add your milestone in the pop-up,
• Select that date and enter the name of your milestone,
• Click Create and see your milestone in action.

As soon as you reach your project milestone, you’ll feel a surge of motivation, making it more likely that you will continue working on your goals.

Suppose, at some point, you feel like you’ve overestimated yourself by assigning too short of a deadline for your goal. In that case, you can edit your milestone by clicking on it.

Here are the steps to make changes to your project milestone:

• Select the milestone in question,
• Edit dates, name, or delete the milestone,
• Click Save to complete the process.

Creating milestones regularly will help you keep up with your goal streak and achieve awesome things in your work life.

Even though you can track project duration in Clockify completely free of charge, take a look at other plans and pricing lists Clockify also has to offer:

Also, don’t miss to check out the newest bundle plan , offering Clockify with 2 more apps at a special price.

Whether it’s short-term wins or long-term visions, you can attain your goals faster with a piece of project tracking software.

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 became to share her knowledge and help others to become the best, most successful versions of themselves.

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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.

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The Ultimate Guide to Successful Long-Term Planning

Long-term planning is a crucial aspect of any successful business or organization. It involves creating a roadmap for the future, setting goals and objectives, and implementing strategies to achieve them. In this article, we will explore the importance of long-term planning, define what it entails, and discuss the benefits it can bring.

What is Long-Term Planning?

Long-term planning refers to the process of setting goals and objectives that extend beyond the immediate future. It involves analyzing current market trends, identifying key milestones, and developing strategies to achieve sustainable growth over an extended period. This type of planning takes into account various factors such as market dynamics, customer needs , and internal capabilities.

The Importance of Long-Term Planning Strategies

Long-term planning is essential because it provides direction and purpose for an organization. It allows businesses to anticipate challenges, identify opportunities, and make informed decisions aligning with their vision. By taking a proactive approach to the future, organizations can stay ahead of the competition and adapt to changing market conditions.

Benefits of Successful Long-Term Planning

Successful long-term planning offers numerous benefits for businesses. Firstly, it provides a sense of direction and purpose that guides decision-making at all levels of the organization. Secondly, it helps align resources effectively by identifying priorities and allocating them accordingly. Additionally, long-term planning enables businesses to build resilience by anticipating risks and developing contingency plans.

Long-term planning strategies are crucial in ensuring an organization's success in today's dynamic business environment. By adopting these strategies, businesses can navigate uncertainties while capitalizing on emerging opportunities.

Remember: Successful long-term planning starts with understanding its importance and what it entails.

Understanding Long-Term Planning

Long-term planning is a crucial aspect of business success, as it allows organizations to set clear goals and objectives for the future. By understanding the fundamentals of long-term planning, companies can develop effective strategies to navigate the ever-changing market landscape and achieve sustainable growth.

Defining Long-Term Goals and Objectives

Defining long-term goals and objectives is the foundation of any successful long-term plan. These goals provide a clear direction for the organization and serve as a roadmap for decision-making. Long-term goals should be specific, measurable, achievable, relevant, and time-bound (SMART). They should align with the company's vision and values while considering external factors such as market trends and customer demands.

Identifying Key Milestones and Benchmarks

To track progress towards long-term goals, it is essential to identify key milestones and benchmarks along the way. Milestones are significant achievements that mark important stages in the plan's execution. Benchmarks, on the other hand, are measurable indicators used to assess performance against predetermined targets. By regularly monitoring these milestones and benchmarks, businesses can ensure they stay on track towards their long-term objectives.

Assessing the Current Market Landscape

Understanding the current market landscape is critical for effective long-term planning. This involves conducting thorough research and analysis of industry trends, competitor strategies, customer preferences, technological advancements, and regulatory changes. By gaining insights into these factors, organizations can identify potential opportunities or threats that may impact their long-term plan. This assessment helps businesses make informed decisions about resource allocation, product development, marketing strategies, and more.

By defining long-term goals and objectives, identifying key milestones and benchmarks along the way, as well as assessing the current market landscape, businesses can lay a strong foundation for their long-term planning strategies. This comprehensive understanding sets the stage for developing an effective long-term plan that aligns with organizational aspirations and maximizes opportunities for success.

Developing a Long-Term Plan

Developing a long-term plan is crucial for the success and sustainability of any organization. It provides a roadmap for achieving goals and objectives over an extended period of time. In this section, we will explore the key steps involved in developing a comprehensive long-term plan.

Creating a Vision Statement

A vision statement serves as the foundation for a long-term plan. It outlines the organization's desired future state and clarifies its purpose and direction. A well-crafted vision statement inspires and motivates employees, stakeholders, and customers alike.

To create an effective vision statement, it is important to consider the organization's values, mission, and unique selling proposition. It should be concise, memorable, and reflective of the organization's aspirations. By clearly articulating where the organization wants to be in the long run, a vision statement sets the stage for strategic decision-making.

Setting SMART Goals

Setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals is essential in long-term planning. These goals provide clear targets that can be tracked and evaluated over time.

Specific goals outline precisely what needs to be achieved, while measurable goals allow progress to be quantified objectively. Achievable goals ensure that they are within reach considering available resources and capabilities. Relevant goals align with the overall objectives of the organization.

Time-bound goals establish deadlines or milestones to keep progress on track. By setting SMART goals during long-term planning, organizations can effectively allocate resources and prioritize initiatives that contribute to their desired future state.

Conducting a SWOT Analysis

A SWOT analysis is an important tool in developing a long-term plan as it helps identify internal strengths and weaknesses as well as external opportunities and threats facing an organization.

By thoroughly assessing these factors, organizations gain valuable insights into their current position in relation to market conditions and competition. This analysis enables them to capitalize on their strengths, address weaknesses, seize opportunities, and mitigate potential threats.

A SWOT analysis provides a holistic view of the organization's internal and external environment, which is essential for making informed decisions and formulating effective strategies in the long term.

Strategies for Successful Long-Term Planning

Building a Strong Team

To ensure the success of long-term planning, it is crucial to build a strong team aligned with the company's vision. This team should consist of individuals with diverse skills and expertise, allowing for comprehensive analysis and decision-making. Different perspectives can be considered by fostering collaboration and open communication within the team, leading to well-rounded long-term strategies.

Utilizing Data and Analytics

Data and analytics play a pivotal role in effective long-term planning. Organizations can gain valuable insights into their target market's needs and preferences by leveraging data from various sources, such as market research, customer insights, and industry trends. Analyzing this data enables businesses to make informed decisions about resource allocation, product development, and marketing strategies. By utilizing data-driven approaches in long-term planning, companies can increase their chances of achieving their goals.

Adapting to Changing Market Conditions

In today's dynamic business landscape, market conditions are constantly evolving. Successful long-term planning requires organizations to stay agile and adaptable. It is essential to continuously monitor market trends and competitor activities to identify potential threats or opportunities that may arise. By proactively adapting their strategies based on changing market conditions, businesses can position themselves for long-term success.

By incorporating these strategies into the long-term plan, businesses can enhance their chances of achieving sustained success in an ever-changing marketplace.

Implementing the Long-Term Plan

Implementing the long-term plan is a crucial step in ensuring its success. It effectively allocates resources, establishes clear roles and responsibilities, and monitors and evaluates progress.

Allocating Resources Effectively

Allocating resources effectively is essential for the successful execution of a long-term plan. This involves carefully determining how to distribute resources such as finances, manpower, and technology to achieve the desired goals. Organizations can optimize their efficiency and productivity by strategically allocating resources based on priority and need.

Establishing Clear Roles and Responsibilities

Establishing clear roles and responsibilities is key to avoiding confusion and ensuring everyone understands their part in executing the long-term plan. By clearly defining who is responsible for what tasks, teams can work collaboratively toward achieving common objectives. Effective communication of roles helps streamline processes, minimizes duplication of efforts, and fosters accountability among team members.

Monitoring and Evaluating Progress

Monitoring and evaluating progress is vital to track the implementation of the long-term plan and make necessary adjustments along the way. Regularly measuring key performance indicators (KPIs) allows organizations to assess whether they are on track toward achieving their goals or if any modifications are required. By analyzing progress, organizations can identify areas of improvement or potential challenges that need addressing.

Implementing a long-term plan requires effective resource allocation, clear role establishment, and continuous progress monitoring. By following these strategies diligently, organizations can enhance their chances of successfully executing their long-term plans while maximizing their growth potential.

Overcoming Challenges in Long-Term Planning

Dealing with Uncertainty and Risk. In long-term planning, one of the major challenges is dealing with uncertainty and risk. The future is unpredictable; factors can always derail even the most well-thought-out plans. However, instead of being overwhelmed by uncertainty, successful long-term planners embrace it as an opportunity for growth and innovation. They develop contingency plans to mitigate risks and adapt their strategies based on changing circumstances. By acknowledging and addressing uncertainty head-on, they are better equipped to navigate the unknown and achieve long-term goals.

Managing Stakeholder Expectations. Another challenge in long-term planning is managing stakeholder expectations. Stakeholders may have varying priorities, timelines, and expectations for the plan's outcome. It is crucial to engage all stakeholders early on in the planning process to ensure alignment and avoid conflicts. Effective communication plays a vital role in managing stakeholder expectations throughout the implementation of the long-term plan. Planners can build trust and maintain support from all parties involved by informing stakeholders about progress, proactively addressing concerns, and seeking feedback regularly.

Maintaining Flexibility in the Plan. Flexibility is key when it comes to long-term planning strategies. As circumstances change over time, it is essential to remain adaptable and open to adjustments in the plan. A rigid plan that does not account for unexpected events or new opportunities can quickly become obsolete or ineffective. Successful long-term planners regularly review their strategies and reassess their goals based on market conditions, technology advancements, or other relevant factors. Maintaining flexibility within their plan allows them to seize emerging opportunities or pivot when necessary without compromising their overall vision.

Long-term planning is crucial for organizations to achieve sustained success. Planners can navigate these obstacles by understanding the challenges that may arise, such as dealing with uncertainty and risk, managing stakeholder expectations, and maintaining flexibility in the plan. Organizations can overcome hurdles and achieve long-term goals by carefully considering these challenges and implementing appropriate strategies. Let's embrace the power of long-term thinking and take action for a successful future.

Long-term planning is a crucial aspect of achieving success in any endeavor. By carefully considering the future and developing a comprehensive long-term plan, individuals and organizations can set themselves up for sustainable growth and prosperity.

Strikingly and Your Long-Term Planning Strategy

Strikingly is a website builder that can be used to create a professional website for your business. It offers a variety of features that can be helpful for long-term planning, such as:

• Analytics. Strikingly provides detailed analytics about your website traffic so you can track your progress over time and make necessary adjustments to your long-term plan.
• Goal tracking . You can set goals for your website, such as increasing traffic or generating leads, and Strikingly will help you track your progress toward those goals.

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• Reporting. Strikingly provides reports that you can use to analyze your website traffic and performance. This information can help you make decisions about your long-term plan.
• Integrations. Strikingly integrates with various other tools, such as email marketing platforms and CRM software. This can help you automate tasks and streamline your long-term planning process.

In addition to these features, Strikingly can also help you with long-term planning by providing you with a platform to:

• Create a strong online presence. Your website is your online storefront, and ensuring it's well-designed and informative is important. Strikingly can help you create a website to impress your customers and help you grow your business .

Image taken from Strikingly  

• Reach a wider audience. Strikingly makes it easy to promote your website through social media, email marketing, and other channels. This can help you reach a wider audience and grow your business .
• Stay ahead of the competition. The business landscape is constantly changing, and staying ahead of the competition is important. Strikingly can help you track your competitors' websites and make sure yours is always up-to-date.

Overall, Strikingly can be a valuable tool for businesses that are looking to create a long-term plan. The platform's features and integrations can help you track your progress, set goals, and make informed decisions about your future.

Here are some specific ways that Strikingly can be used for long-term planning for businesses:

• Set goals. You can use Strikingly's goal-tracking features to set specific goals for your website, such as increasing traffic or generating leads. This will help you stay focused and motivated as you work towards your long-term plan.

• Track progress. Strikingly's analytics features can help you track your website traffic and performance over time. This information can be used to measure your progress toward your goals and make necessary adjustments to your long-term plan.
• Identify opportunities. Strikingly's reporting features can help you identify opportunities to improve your website and grow your business. For example, you could use the reports to see which pages on your website are most popular or which keywords drive traffic.

If you're looking for a website builder that can help you with long-term planning for your business, Strikingly is a good option to consider. The platform's features and integrations can help you track your progress, set goals, and make informed decisions about your future.

The Power of Long-Term Thinking

Long-term thinking allows individuals and organizations to see beyond the immediate challenges and focus on the bigger picture. It enables them to anticipate future trends , identify potential obstacles, and make informed decisions that will benefit them in the long run.

While planning is essential, taking action on those plans is equally important. Implementation is key to turning dreams into reality. By executing their long-term plans effectively and adapting as needed, individuals and organizations can pave the way for a successful future.

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Strategic Plans for Long-Term Growth: Examples and Strategies

This is a comprehensive guide on strategic planning for small to midsize companies.

If you want to:

• Move your organization in the direction you intend for long-term success,
• Implement your plan smoothly for greater growth,
• Use a better platform for developing a truly effective strategic plan,

… then you’ll love this guide. Let’s get started.

What’s Covered in This Guide

Click on each to jump to that section.

What is Strategic Planning?

What does strategic planning mean, what is the goal of strategic planning.

• What is Strategic Leadership?

4 Strategic Planning Strategies

The strategic planning process [11 steps], what does strategic planning involve.

• How to Implement Your Strategic Plan

Examples of Strategic Plans

Get your strategic planning done on ninety.

Strategic planning is the process you use to:

• Establish and document a clear direction for your organization.
• Identify business goals and set priorities that create growth for your company.
• Formulate a long-term plan of action designed to achieve these objectives.
• Determine an internal system tracking and evaluating performance.

When organizations want to, they use a strategic plan to:

• Strengthen their operation.
• Focus on collective energy and resources.
• Enable leaders, teams, and other stakeholders to work toward common goals.
• Make agreements around desired results.
• Refresh direction and prevail over a changing or challenging environment.

Thinking strategically helps companies take the right action for more success and better outcomes. Some even call it an art.

Strategic planning is one of three essential ways to pursue important objectives for your company. When tackling challenges and determining action plans, you can think strategically, tactically, or operationally. These three thought processes often work in concert to help you create a framework that achieves your desired objectives.

• Strategic plans are designed for multilevel involvement throughout the entire organization. Leaders will look ahead to where they want to be in three, five, and ten years and develop a mission.
• Tactical plans support strategic plans. They outline the specific responsibilities and functionalities at the department level so employees know how to do their part to make the strategic plan successful.
• Operational plans focus on the highly detailed procedures, processes, and routine tasks that frontline employees must accomplish to achieve desired outcomes.

The goal of your strategic plan is to determine:

• Where your company stands in relation to the current business environment. Understand how your business operates, how you create value, and how you differentiate from your competitors.
• Where you want to take the business based on long-term objectives such as your company’s vision, mission, culture, values, and goals. Envision how you see the company five or ten years from now.
• What you need to do to get there. You come away from your planning sessions with a roadmap that helps deliver on your strategic objectives. Determine better ways to enable and implement change, schedule deadlines, and structure goals, so they’re achievable.

The main purpose of your strategic plan is to create clearly defined goals for achieving the growth and success of your organization. These goals are connected to your organization’s mission and long-term vision.

What is Strategic Leadership? 

Strategic leadership is how you create, implement, and sustain your strategic plan, so your organization moves in the direction you intend for long-term success. This usually involves establishing ongoing practices and benchmarks, allocating resources, and providing leadership that supports your strategic mission and vision statement.

Strategic leadership, also known as strategy execution, can employ two different approaches:

• A prescriptive approach is analytical and focuses on how strategies are created to account for risks and opportunities.
• A descriptive approach is principle-driven and focuses on how strategies are implemented to account for risks and opportunities.

Most people agree that a strategic plan is only as good as the company’s ability to research, create, implement, evaluate, and adjust when needed. The benefits can be great when:

• Your entire organization supports the plan.
• Your business is set up to succeed.
• Your employees are more likely to stay on track without being distracted or derailed.
• You make better decisions based on metrics that facilitate course correction.
• Everyone in your company is involved and invested in better outcomes.
• Departments and teams are aligned across your company.
• People are committed to learning and training.
• Productivity increases, and performance improves.
• Creativity is encouraged and rewarded.

What are the four main points of strategic planning? You engage in strategic thinking so you can create effective company goals that are:

Purpose-driven

Align your strategic plan with the company’s purpose and values as you understand them.

Actionable strategic goals are worth spending your time and resources on to reach organizational objectives.

It’s critical for you to track your strategy's progress and success, enabling your teams to take action and meet the goals more effectively.

Focused Long-term

A long-term focus distinguishes a strategic plan from operational goals, which involve daily activities and milestones required for success. When planning strategically, you’re looking ahead to the company’s future.

A strategic plan isn’t written in a day. Critical thinking evolves over several months. Those involved in the strategic planning are usually a team of leaders and employees from your company and possibly other stakeholders.

When should strategic planning be done?

You should plan strategically for start-ups and newer organizations from the start. But even if your company is more established, it’s not too late to start working on strategy.

Flexible timing that’s tailored to the needs of your organization is smart. Although the frequency of strategy sessions is up to you, many leaders use these milestones as a guide:

• When the economy, your market, and industry trends change, or a global event occurs (like the onset of a pandemic).
• Following a change in senior leadership.
• Before a product launch or when a new division is added to your business.
• After your company merges with another organization.
• During a convenient time frame such as a quarterly and annual review.

Many organizations opt to schedule regular strategic reviews such as quarterly or annually. Especially when crafting a plan, your strategic planning team should meet regularly. They will often follow predetermined steps in the development of your long-term plan.

What are the 11 steps of strategic planning?

Identify your company’s strategic position in the marketplace. .

Gather market data and research information from both internal and external sources. You may want to conduct a comprehensive SWOT analysis to determine your company’s Strengths, Weaknesses, Opportunities, and Threats against success. Your strengths and weaknesses are directly related to your current competitive advantage within your industry. They are what you use to balance challenges to your success. They also influence the likelihood of increased market share in the future.

Define your unique vision and mission. 

What would success look like for you in three years? Five years? Ten years? Articulate that in a vision statement. How do you intend to realize your vision? That’s articulated in your mission statement. Formulating purpose-driven strategic goals articulates why your company does what it does. Your organizational values inform your mission and vision and connect them to specific objectives.

Determine your company’s value.

Many companies use financial forecasting for this purpose. A forecast can assign anticipated measurable results, return on investment (ROI), or profits and cost of investment.

Set your organizational direction.

Defining the impact you want to have and the time frame for achieving helps focus a too-broad or over-ambitious first draft. This way, your plan will have objectives that will have the most impact. 

Create specific strategic objectives.

Your strategic objectives identify the conditions for your success. For instance, they may cover:

• Value: Increasing revenue and shareholder value, budgeting cost, allocating resources aligned with the strategic plan, forecasting profitability, and ensuring financial stability. 
• Customer Experience: Identifying target audiences, solution-based products and services, value for the cost, better service, and increased market share.
• Operational Efficiency: Streamlining internal processes, investing in research and development, total quality and performance priorities, reducing cost, and improving workplace safety.
• Learning and Growth: Training leaders and teams to address change and sustain growth, improving employee productivity and retention, and building high-performing teams.

Set specific strategic initiatives.

Strategic initiatives are your company's actions to reach your strategic objectives, such as raising brand awareness, a commitment to product development, purpose-driven employee training, and more.

Develop cascading goals.

Cascading goals are like cascading messages : They filter your strategy throughout the company from top to bottom. The highest-level goals align with mid-level goals to individual goals employees must accomplish to achieve overall outcomes. This helps everyone see how their performance will influence overall success, which improves engagement and productivity.

Create alignment across the entire company.

The success of your strategy is directly impacted by your commitment to inform and engage your entire workforce in strategy implementation. This involves ensuring everyone is connected and working together to achieve your goals. Overall decision-making becomes easier and more aligned.

Consider strategy mapping.

A strategy map is an easy-to-understand diagram, graphic, or illustration that shows the logical, cause-and-effect relationship among various strategic objectives. They are used to quickly communicate how your organization creates value. It will help you communicate the details of your strategic plan better to people by tapping into their visual learning abilities.

Use metrics to measure performance.

When your strategy informs the creation of SMART organizational goals , benchmarks can be established and metrics can be assigned to evaluate performance within time frames. Key performance indicators (KPIs) align performance and productivity with long-term strategic objectives. 

Evaluate the performance of your plan regularly.

You write a strategic plan to improve your company’s overall performance. Evaluating your progress at regular intervals will tell you whether you’re on your way to achieving your objectives or whether your plan needs an adjustment.

Effective strategic planning involves creating a company culture of good communication and accountability. It involves creating and embracing the opportunity for positive change.

Consider these statistics:

• In many companies, only 42% of leaders and 27% of employees have access to a strategic plan.
• Even if they have access, 95% of employees do not understand their organization's strategy.
• 5.2% of a strategy’s potential is lost to poor communication.
• What leaders care about makes up at least 80% of the content of their communications. But those messages do not tap into around 80% of their employees’ primary motivators for putting extra energy into a change program.
• 28% of leaders say one of the main reasons strategic initiatives succeed is the ability to attract skilled personnel; 25% say it’s good communication; 25% say it’s the ability to manage organizational change.

Here’s what you can do to embrace a culture of good communication and accountability:

Make your strategic plan visible. Talk about what's working and what isn't. People want to know where and how they fit into the organization and why their contribution is valuable. Even if they don't understand every element of the plan.

Build accountability. If you've agreed on a plan with clear objectives and priorities, your leaders have to take responsibility for what's in it. They must own the objectives and activities in your plan.

Create an environment for change. It’s much more difficult to implement a strategy if you think there will be no support or collaboration from your coworkers. Addressing their concerns will help build a culture that understands how to champion change.

Implementing Your Strategic Plan

• 98% of leaders think strategy implementation takes more time than strategy formulation.
• 61% of leaders acknowledge that their organizations often struggle to bridge the gap between strategy formulation and its day-to-day implementation.
• 45% of leaders say ensuring employees take different actions or demonstrate different behaviors is the toughest implementation challenge; 37% of leaders say it’s gaining support across the whole organization.
• 39% of leaders say one of the main reasons strategic plans succeed is skilled implementation.

The reality for so many is that it’s harder to implement a strategic plan than to craft one. Great strategic ideas and a clear direction are key to success, no matter what. But so is:

• Turning strategic ideas into an easy-to-implement framework that enables meaningful managing, tracking, and adapting.  
• Getting everyone in the organization on the same strategic page, from creation to execution.

When your plan is structured to support implementation, you're more likely to get it done.

What are examples of good strategic planning? There are lots of templates out there to help you create a plan document with pen and paper.

But Ninety has a better way.

The Vision planner is essentially a strategic planning template on Ninety’s cloud-based platform that allows you to:

• Set goals, establish how you will meet them, and share them with those who need to know.
• Gain visibility around your company values.
• Create core values, a niche, and long-term goals that are accessible to everyone in your company.
• Create a vision of the future that lets you know what needs to happen now.
• Streamline and organize your processes.
• Easily update and track changes.
• Bring alignment to your entire organization.

And you can do all this with only two digitized pages.

In your Vision tool inside Ninety, you can easily access all the things that make strategic plans effective:

• Executive Summary
• Elevator Pitch
• Mission Statement
• Vision Statement
• SWOT Analysis
• Key Performance Indicators (KPIs)
• Industry Analysis
• Marketing Plan
• Operations Plan
• Financial Projections

Vision + Goals is also completely integrated with all other features on Ninety, such as Scorecards, 90-Day Goals, To-Dos, Issues, Roles & Responsibilities Chart, Meetings, One-on-Ones, and more:

• Create a clear vision for each team.
• Determine one- and three-year goals.
• Reference past versions in a Vision archive.
• Share your Vision with all teams, or keep it private.

Now that you’ve learned how to grow your company using strategic planning, it’s time to put your knowledge into practice:

Build your strategic plan on Ninety now.

Do you want more step-by-step guides on strategy, strategic planning, and creating actionable strategic plans?  Subscribe to our blog!

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Business Planning

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on June 08, 2023

Are You Retirement Ready?

Table of contents, what is business planning.

Business planning is a crucial process that involves creating a roadmap for an organization to achieve its long-term objectives. It is the foundation of every successful business and provides a framework for decision-making, resource allocation, and measuring progress towards goals.

Business planning involves identifying the current state of the organization, determining where it wants to go, and developing a strategy to get there.

It includes analyzing the market, identifying target customers, determining a competitive advantage, setting financial goals, and establishing operational plans.

The business plan serves as a reference point for all stakeholders , including investors, employees, and partners, and helps to ensure that everyone is aligned and working towards the same objectives.

Importance of Business Planning

Business planning plays a critical role in the success of any organization, as it helps to establish a clear direction and purpose for the business. It allows the organization to identify its goals and objectives, develop strategies and tactics to achieve them, and establish a framework of necessary resources and operational procedures to ensure success.

Additionally, a well-crafted business plan can serve as a reference point for decision-making, ensuring that all actions taken by the organization are aligned with its long-term objectives.

It can also facilitate communication and collaboration among team members, ensuring that everyone is working towards a common goal.

Furthermore, a business plan is often required when seeking funding or investment from external sources, as it demonstrates the organization's potential for growth and profitability. Overall, business planning is essential for any organization looking to succeed and thrive in a competitive market.

Business Planning Process

Step 1: defining your business purpose and goals.

Begin by clarifying your business's purpose, mission, and long-term goals. These elements should align with the organization's core values and guide every aspect of the planning process.

Step 2: Conducting Market Research and Analysis

Thorough market research and analysis are crucial to understanding the industry landscape, identifying target customers, and gauging the competition. This information will inform your business strategy and help you find your niche in the market.

Step 3: Creating a Business Model and Strategy

Based on the insights from your market research, develop a business model that outlines how your organization will create, deliver, and capture value. This will inform the overall business strategy, including identifying target markets, value propositions, and competitive advantages.

Step 4: Developing a Marketing Plan

A marketing plan details how your organization will promote its products or services to target customers. This includes defining marketing objectives, tactics, channels, budgets, and performance metrics to measure success.

Step 5: Establishing Operational and Financial Plans

The operational plan outlines the day-to-day activities, resources, and processes required to run your business. The financial plan projects revenue, expenses, and cash flow, providing a basis for assessing the organization's financial health and long-term viability.

Step 6: Reviewing and Revising the Business Plan

Regularly review and update your business plan to ensure it remains relevant and reflects the organization's current situation and goals. This iterative process enables proactive adjustments to strategies and tactics in response to changing market conditions and business realities.

Components of a Business Plan

Executive summary.

The executive summary provides a high-level overview of your business plan, touching on the company's mission, objectives, strategies, and key financial projections.

It is critical to make this section concise and engaging, as it is often the first section that potential investors or partners will read.

Company Description

The company description offers a detailed overview of your organization, including its history, mission, values, and legal structure. It also outlines the company's goals and objectives and explains how the business addresses a market need or problem.

Products or Services

Describe the products or services your company offers, emphasizing their unique features, benefits, and competitive advantages. Detail the development process, lifecycle, and intellectual property rights, if applicable.

Market Analysis

The market analysis section delves into the industry, target market, and competition. It should demonstrate a thorough understanding of market trends, growth potential, customer demographics, and competitive landscape.

Marketing and Sales Strategy

Outline your organization's approach to promoting and selling its products or services. This includes marketing channels, sales tactics, pricing strategies, and customer relationship management .

Management and Organization

This section provides an overview of your company's management team, including their backgrounds, roles, and responsibilities. It also outlines the organizational structure and any advisory or support services employed by the company.

Operational Plan

The operational plan describes the day-to-day operations of your business, including facilities, equipment, technology, and personnel requirements. It also covers supply chain management, production processes, and quality control measures.

Financial Plan

The financial plan is a crucial component of your business plan, providing a comprehensive view of your organization's financial health and projections.

This section should include income statements , balance sheets , cash flow statements , and break-even analysis for at least three to five years. Be sure to provide clear assumptions and justifications for your projections.

Appendices and Supporting Documents

The appendices and supporting documents section contains any additional materials that support or complement the information provided in the main body of the business plan. This may include resumes of key team members, patents , licenses, contracts, or market research data.

Benefits of Business Planning

Helps secure funding and investment.

A well-crafted business plan demonstrates to potential investors and lenders that your organization is well-organized, has a clear vision, and is financially viable. It increases your chances of securing the funding needed for growth and expansion.

Provides a Roadmap for Growth and Success

A business plan serves as a roadmap that guides your organization's growth and development. It helps you set realistic goals, identify opportunities, and anticipate challenges, enabling you to make informed decisions and allocate resources effectively.

Enables Effective Decision-Making

Having a comprehensive business plan enables you and your management team to make well-informed decisions, based on a clear understanding of the organization's goals, strategies, and financial situation.

Facilitates Communication and Collaboration

A business plan serves as a communication tool that fosters collaboration and alignment among team members, ensuring that everyone is working towards the same objectives and understands the organization's strategic direction.

Business planning should not be a one-time activity; instead, it should be an ongoing process that is continually reviewed and updated to reflect changing market conditions, business realities, and organizational goals.

This dynamic approach to planning ensures that your organization remains agile, responsive, and primed for success.

As the business landscape continues to evolve, organizations must embrace new technologies, methodologies, and tools to stay competitive.

The future of business planning will involve leveraging data-driven insights, artificial intelligence, and predictive analytics to create more accurate and adaptive plans that can quickly respond to a rapidly changing environment.

By staying ahead of the curve, businesses can not only survive but thrive in the coming years.

Business Planning FAQs

What is business planning, and why is it important.

Business planning is the process of setting goals, outlining strategies, and creating a roadmap for your company's future. It's important because it helps you identify opportunities and risks, allocate resources effectively, and stay on track to achieve your goals.

What are the key components of a business plan?

A business plan typically includes an executive summary, company description, market analysis, organization and management structure, product or service line, marketing and sales strategies, and financial projections.

How often should I update my business plan?

It is a good idea to review and update your business plan annually, or whenever there's a significant change in your industry or market conditions.

What are the benefits of business planning?

Effective business planning can help you anticipate challenges, identify opportunities for growth, improve decision-making, secure financing, and stay ahead of competitors.

Do I need a business plan if I am not seeking funding?

Yes, even if you're not seeking funding, a business plan can be a valuable tool for setting goals, developing strategies, and keeping your team aligned and focused on achieving your objectives.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

Related Topics

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• Family Business Continuity
• Family Business Governance
• Family Limited Partnerships (FLPs) and Buy-Sell Agreements
• Human Resource Planning (HRP)
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How to set up and achieve long term goals for a business

What are long-term goals for business?

Long-term goals for business are the high-level goals of your strategy that you aim to achieve in the next 3-5 years or even longer. They are the objectives that, once reached, bring you closer to your vision.

They are the milestones for your vision.

They tend to be resilient to environmental changes like technological, political and others. Long-term goals determine the direction of your company and solidify your strategy regarding your position in the market and the industry. In other words, they outline the high-level objectives you choose to accomplish to bring your vision to life.

Why it’s important to set long-term goals

They provide clarity ..

A business with weak or non-existent long-term goals is like a leaf in the wind.

It moves in no particular direction and is subject to every and any change in the environment. It jumps from trend to trend without understanding what causes them, trying to get as much benefit out of them as possible. Sometimes it succeeds, others not so much. As a result, its performance is a roller coaster and its future unpredictable and uncertain. These kinds of businesses move fast towards nowhere.

A business with no long-term goals is in reactive mode .

On the other hand , organizations with long-term goals deriving from their vision have a more steady course. They have clarity on what they wish to become in the next 3-5 years, which guides their decisions. It’s easier for them to spot meaningful trends and take advantage of them in the short term to succeed in the longer term.

Clarity in the organization’s future state, when combined with a concise view of its current state , is a powerful tool. It enables an accurate gap analysis and the grounding of the strategy in reality.

A business with solid and aligned long-term goals is in proactive mode .

How short-term and long-term goals differ

Long-term goals differ from short-term goals in four key traits:

• Short-term goals are malleable .
• Short-term goals are specific .
• Short-term goals are measurable .
• Short-term goals are sacrificable .

Short-term goals change often. As they should. They correlate to the tactics you choose to pursue your strategic objectives. And your tactics change when the environmental circumstances change, e.g., your competitors launched a new product, a global pandemic came out of nowhere, your country leaves a state union , or a new tech disrupts your industry. All of these changes force you to adapt your short-term expectations and tactics. Your long-term goals are more resilient to these changes.

Short-term goals love specificity. This is goal setting 101. Remove ambiguity and make sure that everybody interprets the goals the same way. Make your language simple and your description longer if you have to. Clarity in goals informs decisions. Of course, long-term goals should be clear, as well, but they don’t have to be so specific. 

Short-term goals have numbers in them. They are not metrics or KPIs because they’re lagging indicators of your progress. But they are indicators nonetheless. They inform you whether you and your people did a good job to achieve them. Long-term goals don’t need numbers if they don’t make sense. For example, “Dominate our category” could be accompanied by a number like “Own 70% of the market”, but that doesn’t exactly sum up what “dominating a category” really is.

Short-term goals are sacrificed for the company’s greater good. We’re past the time where quarterly numbers are the holy grail of strategy. Leadership with a clear vision recognizes that sometimes you have to make short-term sacrifices to achieve long-term success. It’s how you build sustainable and stable growth. The reverse is what creates soaring short-term results but destroys the culture and leads to ethical fading.

How long are short-term and long-term goals

The scale is relative.

A colossus like Amazon can’t really keep up and survive with a strategy shorter than 3 years . The bigger the organization (and its market cap), the longer the span of its long-term goals. Planning for so long ahead allows the company to manage its resources efficiently and direct its effort towards the most promising big move.

In his book “Invent & Wander: The Collected Writings of Jeff Bezos,” Jeff Bezos says that each quarter is baked three years earlier .  Not three months. Not three quarters. Three years. Which means that the numbers of the latest quarter indicate the quality of the company’s 3- year-old strategy. And it makes sense. It’s impossible to coordinate over a million employees if you change the company's direction with every small trend you spot.

Of course, that doesn’t mean the strategy doesn’t adapt to environmental changes.

Complacency is the enterprise killer . Large organizations might be more resilient to threats, but they can become irrelevant very fast, remember Blockbuster and Kodak. However, with size comes one huge advantage. Data. Large organizations have access to huge amounts of data that can generate market insights, spot trends and almost “predict the future.”

Short-term and medium-term goals are decided based on those findings. Due to their dependence on environmental conditions, short-term goals can’t be yearly . Even longer than quarterly is stretching them. In a time of a crisis, short-term goals could be as short as daily and in more peaceful circumstances as long as quarterly.

Long-term goals examples

The further you look into the future, the more uncertain it becomes. The closer your milestones are to your vision, the less specific they become.

Let’s take, for example, The Walt Disney Company . Disney’s vision statement is:

“To be one of the world’s leading producers and providers of entertainment and information.” When Bob Iger took over as Disney’s CEO, his strategy was summed up in three priorities, 3 long-term goals :

• Create content of the highest quality
• Adopt cutting-edge technology to create content & connect with the customers
• Expand globally

These goals are specific enough to guide the decisions of everyone inside the company and are vague enough for everyone to interpret them differently. In other words, they are contextualizing the content of the rest of the strategy.

Other long-term goals examples are:

• Dominate our category
• Create a community-like culture
• Lead the sustainability transformation in our industry
• Create the most comfortable/cheapest/easiest to use [product]
• Digitize our processes

Short-term goals examples

Short-term goals are very specific.

Each department, team and individual has its own short-term goals to meet. What’s important is to have all of them aligned, some shared between teams and people and none isolated. Choosing short-term goals is the last step of your strategy’s implementation and should derive naturally from your strategic priorities.

Here is a list of short-term goals:

• Increase our revenue by 15% by the end of Q1 owned by Jane Doe.
• Reduce safety incidents by 70% by the end of Q1 owned by John Doe.
• Increase customer retention by 30% by the end of Q2 owned by John Doe.
• Hire 5 new salespeople by the end of the month owned by Jane Doe.
• Increase ad conversion by 10% by the end of the next month owned by Jane Doe.

How to set long-term goals

Long-term goals have 3 important components:

• Duration (NOT deadline)
• Specificity to dictate choices
• They are memorable

They don’t have a specific deadline. They have an estimated duration. You don’t “Dominate your category” by Dec 31, 2025. You “Dominate your category” in the next 3 years. If in 3 years you haven’t achieved your goal, then something went wrong. That’s how you should think of your long-term deadline, not as a hard date but as an estimated duration.

They dictate choices. Long-term goals outline the company’s strategy and inform every employee’s decision-making process. Ideally, when a team leader needs to make a decision, crucial or not, they can easily align it with the company’s strategy simply by visiting the long-term goals. That’s why they can’t be overly specific because they will only inform certain types of decisions and be useful to only a limited part of the organization. Thus, creating a big risk of internal misalignment.

They are easy to remember. If your people need to check the company’s long-term priorities every time they make a decision, they won’t. Make sure everyone understands and is on board with your priorities by simply making them memorable. In the end, you want the priorities to provide context, not represent all of your strategy’s details.

Benchmark the duration of your goals externally

Take as much guessing as possible out of the process. Have a hard look at your industry’s history and how long it took certain players to achieve their long-term aspirations. Find out what were their strengths, weaknesses and mistakes . Contrast them to yours and then make an educated estimation of your goal’s duration.

Do better than “best”

Shy away from generic goals like “be the best/first/most innovative.” Nobody perceives these the same way. For example, specify your ideal customer so your people know who NOT to target. Specify your product’s niche , e.g., “perfect scale models” instead of “just toys.” In essence, provide a context to decisions that will dictate a clear set of choices on every organizational level.

Write them for 5-year-olds

If a young child can’t understand your long-term goals, chances are your people will have a hard time remembering them. Simplify the language, avoid jargon, use verbs and be specific in your adjectives . Go beyond 3 goals and you risk giving your people contradicting priorities. Clarity unifies collective effort towards one direction .

How to achieve long-term goals in business

With shorter-term goals.

When you write your strategic plan , start from the end and work your way backward from your vision towards your current state. Here’s how to think about your plan:

• Your vision is your destination.
• Your long-term goals are your milestones.
• Your shorter-term goals are your odometer.

Your strategic plan also contains your Focus Areas and your strategic objectives . They break down your direction even further. 

Starting with the end in mind gives your shorter-term goals a predictive power

So basically, your strategic plan works like a roadmap towards your long-term goals. Here’s how to think about tracking your progress: if you complete all of your strategic objectives, will you have achieved your long-term goals? If you haven’t achieved at least an 80% progress towards them, your tracking is off. You need to revisit your strategic objectives.

This tracking process cascades from the top of the strategic plan to the bottom. Check out how Cascade brings this strategic model to life and aligns your people’s day-to-day work with your company’s vision as a goal management software .

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What Is Long Term Planning Vs. Strategic Management?

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Strategic planning activities enable companies to sustain their operations over the long-term. Companies can maintain a competitive edge by taking innovative approaches that solve complex business problems. Once the strategy gets set by a company’s executive leadership, each lower-level manager conducts long-term planning activities to set priorities, align resources, focus attention on common goals, and ensure that the company delivers on promises to sponsors and stakeholders.

Characteristics of Strategic Planning

Using strategic management processes, you establish the mission, vision and strategy for your business, according to the Balanced Scorecard Institute . As conditions change, you refine the mission and focus your efforts on achieving your strategic goals. Using long-term planning processes, you align project work with these strategic goals. After assessing the needs of your customers, suppliers, employees and business, you create a comprehensive plan and then execute the plan according to the defined timeline and milestones.

Long-term planning also involves monitoring and evaluating activities. For example, in long-term planning you plan the amount of materials required to conduct operations. Then, can use the data about future demands to estimate sales and budget for materials and labor. This will help you negotiate more efficient contracts with your suppliers and schedule deliveries at the best times.

Creating Planning Schedules

Effective strategic management occurs on an ongoing basis. Long-term planning typically involves establishing goals that you expected to achieve five or more years ahead. Strategic management involves assessing relationships to ensure that each department’s objectives align to the company’s overall goals. Long-term plans focus on activities that start now and continue well into the future. This includes activities associated with acquisitions and other complex business transactions. Strategic management defines the direction for the entire company and long-range planning usually differs for each department.

Planning Outcomes and Goals

Effective companies use strategic management activities to define policies, procedures and themes for their organizations. For example, many companies emphasize sustainability in their business operations, such as reducing energy use or supporting the use of alternative energy sources and reducing greenhouse gas emissions. Long-term planning allows managers to allocate resources to achieve these objectives. Both strategic management and long-term planning contribute to an organization’s overall financial health. Both enable growth.

Earning Strategic Planning Credentials

The Association for Strategic Planning certifies strategic management professionals and publishes standards and competencies and encourages business professionals to think, plan and act strategically. Strategic management professionals incorporate change management and leadership development activities into their vision.

By questioning your own opinions, seeking out the opinions of creative people and taking a break every now and then, you can improve your own strategic thinking. To demonstrate your expertise in long-term planning, get a credential from the Project Management Institute, which certifies project management professionals and publishes tips, tools and techniques related to all kinds of planning.

• Balanced Scorecard Institute: Strategic Planning Basics
• Strategic Management.net: Welcome to the Strategic Management Society!
• SAP: Long-Term Planning

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The Differences Between Long-Term, Mid-Term, and Short-Term Planning

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goal setting , Long-term planning , Mid-term Planning , Short-term planning , Strategic Planning , strategy execution

Understanding different types of planning horizons is crucial for both professional success and personal growth. While some goals and projects require a long-term vision, others need a more immediate approach to keep things moving smoothly. Whether you’re managing a team or working on individual objectives, knowing when and how to apply these planning strategies can significantly enhance your overall effectiveness. In this article, we will delve into the nuances of long-term, mid-term, and short-term planning, offering practical insights on how to integrate these approaches for better strategic outcomes.

What is Long-Term Planning?

Long-term planning refers to setting goals and outlining strategies that span several years into the future—usually anywhere from five to twenty years. This type of planning is characterized by its focus on big-picture objectives that require sustained effort over an extended period.

Key Characteristics and Objectives

• Visionary Focus: Long-term planning often revolves around a visionary objective, such as expanding business operations, developing new products, or achieving personal milestones like retirement.
• Comprehensive Strategy: Detailed strategies are developed to sustain progress over the years, aligning resources, capabilities, and efforts to achieve these long-term goals.
• Risk Management: By considering the long-term horizon, planners can identify potential risks and develop mitigation strategies.

Examples in a Professional and Personal Context

• Professional: A company aims to expand its market presence to new geographical locations within the next decade.
• Personal: An individual plans to save for retirement by setting aside a portion of their income over a 20-year period.

What is Mid-Term Planning?

Mid-term planning acts as a bridge between long-term and short-term planning. Covering a period from one to five years, it provides tangible milestones that guide you towards long-term goals while managing day-to-day operations effectively.

The Role of Mid-Term Planning

Mid-term planning ensures that your short-term actions align with long-term visions, creating a coherent path towards achieving significant objectives. It helps in breaking down long-term goals into more manageable chunks, making it easier to track progress and adapt strategies as needed.

Practical Examples and Benefits

• Professional: A business sets a three-year plan to develop and launch a series of products that align with its long-term vision of market expansion.
• Personal: An individual embarks on a three-year fitness program to prepare for an upcoming marathon, ensuring each year builds on the previous one’s progress.

What is Short-Term Planning?

Short-term planning involves setting goals and strategies that can be achieved within a year or less. This type of planning is most effective for managing daily tasks and ensuring immediate objectives are met.

Immediate Benefits and Challenges

• Efficiency: Short-term planning allows for quick accomplishments, fostering a sense of achievement and motivating further progress.
• Flexibility: It offers the flexibility to adapt to immediate needs and unforeseen circumstances.
• Challenges: However, the primary challenge lies in ensuring that short-term actions contribute to mid-term and long-term objectives.

Incorporating Short-Term Plans into Daily Life and Work

• Professional: Planning the agenda for the next quarterly business review to ensure current projects align with mid-term and long-term strategies.
• Personal: Setting a daily schedule to hit weekly fitness goals that contribute to a larger mid-term health plan.

Listen to the podcast: What is (and isn’t) strategy?

Comparing the Three Planning Types

Understanding the intricacies of each planning type enables a holistic approach to achieving goals. Each planning horizon—long-term, mid-term, and short-term—contributes uniquely to an overarching strategy, but they also intersect in meaningful ways.

Key Differences and Intersections

• Long-Term vs. Mid-Term: While long-term planning provides the visionary framework, mid-term planning translates this vision into actionable milestones.
• Mid-Term vs. Short-Term: Mid-term planning bridges the gap to the long-term vision, ensuring that short-term activities are aligned and purposeful.
• Overall Strategy: A balanced blend of these planning types ensures a robust strategy where immediate actions steadily build towards larger goals.

How to Set Long-Term Goals in 7 Steps

Achieving long-term goals requires a systematic approach. Here are the steps to help you set and realize your long-term objectives:

Step 1: Define Clear Objectives and Priorities

Begin by clearly outlining your long-term objectives. What do you hope to achieve? Prioritize these objectives based on their importance and feasibility.

Step 2: Evaluate Resources and Potential Obstacles

Assess the resources at your disposal and identify any potential obstacles. This step is crucial for developing a realistic and effective strategy.

Step 3: Create a Timeline with Specific Milestones

Break down your long-term objectives into smaller, manageable milestones. A detailed timeline helps to maintain focus and track progress.

Step 4: Identify Key Performance Indicators (KPIs)

Determine the KPIs that will measure your progress. These indicators will serve as benchmarks, ensuring that you stay on course toward your goals.

Step 5: Communicate and Align Long-Term Goals with Team Members or Stakeholders

If you’re working with a team or stakeholders, effective communication and alignment are essential. Everyone involved should understand and commit to the long-term objectives.

Step 6: Monitor Progress and Make Necessary Adjustments

Regularly review your progress against the outlined milestones and KPIs. Be prepared to make adjustments as you go to address any issues or changes in circumstances.

Step 7: Continuously Review and Adapt as Needed

Long-term planning is not a set-it-and-forget-it exercise. Continually reassess your goals and strategies to adapt to any new developments or opportunities.

For more detail, read: How to Create a Long-Term Business Strategy in 7 Steps

Implementing a Mixed Planning Approach

To reap the benefits of each planning horizon, a mixed approach can be incredibly effective. This strategy involves integrating long-term, mid-term, and short-term plans to form a cohesive roadmap.

Strategies for Combining Planning Horizons

• Align Goals: Ensure that your short-term tasks contribute towards mid-term milestones, which in turn align with long-term objectives.
• Flexible Reviews: Periodically assess all levels of your planning to make necessary adjustments.

Tools and Techniques

Utilize planning tools that can manage diverse planning cycles, such as Gantt charts, project management software, or even strategic planning and execution software like AchieveIt. These tools can help you visualize your plans, set reminders for key milestones, and track progress efficiently.

Reflect on your current planning strategies and consider how a mixed approach could enhance your effectiveness. By incorporating long-term, mid-term, and short-term planning, you’ll be better equipped to navigate the complexities of achieving your goals. For a more integrated and cohesive planning solution, explore AchieveIt’s strategy planning and execution software.

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Chelsea Damon is the Content Strategist at AchieveIt. When she's not publishing content about strategy execution, you'll likely find her outside or baking bread.

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Creating a Long-Term Business Plan: What Should You Consider?

• By Lynne Pratt
• on 28th June, 2023

71% of the fastest growing companies have a written business plan, and those who actually complete their business plan are twice as likely to succeed in growing their business (compared to those with no plans). Over time and with experience, you’ll find yourself having more things to plan for, and aren’t just looking at having one single long-term business plan to last your business a lifetime.

When creating business plans, you’re going to need to look at the short, mid, and long-term objectives of the company, and determine where you want to go, what you want to do – and how you plan on getting there to do it.

The long-term business plan can be one of the most daunting to piece together, as it often involves objectives and goals rather than specific timeframes or immediate actions that can be completed.

When putting together your long-term plan, there are a number of elements you need to carefully consider, and areas that need to be covered to make the plan useful, useable, and flexible enough to adapt over time.

Define Your Vision

Whether this is a plan for the entire company, or a single project – you need to start at the beginning. What is the vision for this plan? What are the big goals that you want to achieve with the plan?

At this stage, they don’t necessarily need to be data-driven or realistic, these are the best-case scenario and ultimate objectives that you’re identifying here, later on you may need to streamline them or remove them from the plan if they prove to be unobtainable, but for now you want to create your wish list of results.

Identify and Agree on Your Goals

Now is when you shortlist your goals and look at what is achievable – you need to evaluate what is going to have the biggest benefits, what will take the most time (and the least) and what are the priorities for success.

Determine a Preliminary Budget

It is unlikely that your budget will remain static throughout the process, but you need to at least have a general idea of what you are prepared to spend, and how much of the budget will be allocated to each part of the process.

Determining your budget may also see you returning to your goals and making changes to the priorities and whether you intend to go ahead with parts of the plan.

Create an Outline Strategy

Once you have the goals and tasks agreed, you need to work out how they’re going to be done – what needs to be done first, what is reliant on other parts of the process to proceed, and what needs to be implemented to ensure accurate monitoring and evaluation of the strategy as it rolls out.

Set Up Communication and KPIs

Long-term strategies often rely on other tasks being completed over time, or certain actions being taken at certain periods. You must set up a system to monitor the activities and actions and ensure that regular reports contain the right data – you need the right KPIs to ensure you know exactly what the current standing of the project is, and whether any changes need to be made. You also need to ensure you have a robust communication network ready, so action can be taken when needed, whenever it’s needed.

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Assign Responsibilities

You might be planning on a company wide task, where everyone is involved – but there should always be a main point of contact, and someone who has the responsibility of overseeing the project. This will help to make sure goals and milestones are met, that the right tasks are being done in the right order, and that the long-term goal is still obtainable.

When you create a long-term strategy, you need to think about the present and the future of the company – it is essential that you monitor the industry and your competitors and are flexible in your approach to achieving the best results.

The longer period of time you stretch your plan across, the more likely it is that there will be changes or alterations needed along the way, and it is also important to recognise that some plans, through no reason other than industry change, are not going to reach completion – knowing when to stop, and being able to absorb the risk involved in starting the plan is equally important.

Your business will grow, evolve, and change as time goes by – you need to ensure your goals within your long-term business plan remain accurate and relevant to your business needs.

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Long-term Corporate Planning, Functions, Components, Process, Challenges

Long-term Corporate Planning is a strategic process through which organizations set goals, define objectives, and develop strategies to guide their activities over an extended period, typically spanning several years. It involves assessing internal capabilities, analyzing external market dynamics, and forecasting future trends to inform decision-making. Long-term corporate planning focuses on achieving sustainable growth, enhancing competitive advantage, and maximizing shareholder value. It entails setting ambitious yet achievable targets, allocating resources effectively, and monitoring performance against established benchmarks. By taking a forward-looking approach and considering long-range implications, organizations can adapt to changing environments, capitalize on opportunities, and navigate challenges with resilience. Long-term corporate planning fosters organizational alignment, fosters innovation, and ensures continuity of purpose, positioning companies for long-term success in dynamic and evolving business landscapes.

Functions of Long-term Corporate Planning:

Strategic Goal Setting

Establish long-term objectives and goals that align with the organization’s mission and vision. These goals provide a roadmap for the organization’s activities and initiatives over an extended period.

Environmental Analysis

Conduct comprehensive analyses of the internal and external environments to identify opportunities, threats, strengths, and weaknesses. This includes assessing market trends, competitive dynamics, regulatory changes, and technological advancements.

Resource Allocation

Determine the optimal allocation of resources, including financial, human, and technological assets, to support long-term strategic objectives effectively. Prioritize resource allocation based on strategic priorities and anticipated returns.

Risk Management

Identify potential risks and develop strategies to mitigate them over the long term. This involves assessing and monitoring risks associated with operations, market dynamics, regulatory changes, and other factors that may impact the organization’s success.

Innovation and Development

Foster a culture of innovation and continuous improvement to drive long-term growth and competitiveness. Develop strategies for research and development, product innovation, and technological advancement.

Market Expansion and Diversification

Explore opportunities for market expansion and diversification over the long term. This may involve entering new markets, expanding product lines, or diversifying revenue streams to reduce dependence on any single market or product.

Organizational Development

Invest in organizational development initiatives to build capabilities, enhance talent acquisition and retention, and foster a culture of excellence and agility.

Performance Measurement and Evaluation

Establish key performance indicators (KPIs) and metrics to monitor progress towards long-term objectives. Regularly measure and evaluate performance to identify areas for improvement and track success over time.

Components of Long-term Corporate Planning:

Vision and Mission Statement :

These statements outline the purpose and direction of the company, providing a guiding framework for all planning activities.

Goals and Objectives :

Long-term planning should establish specific, measurable, achievable, relevant, and time-bound (SMART) goals and objectives. These goals should align with the company’s vision and mission.

Environmental Analysis :

This involves assessing the internal and external factors that may impact the company’s operations and performance over the long term. This includes factors such as industry trends, market conditions, regulatory changes, and technological advancements.

SWOT Analysis :

Conducting a thorough analysis of the company’s strengths, weaknesses, opportunities, and threats helps in understanding its competitive position and identifying areas for improvement and growth.

Strategic Initiatives :

Long-term planning involves identifying and prioritizing strategic initiatives that will enable the company to achieve its long-term goals. These initiatives may include expansion into new markets, product development, strategic partnerships, or acquisitions.

Resource Allocation :

Allocating resources effectively is crucial for the successful implementation of long-term plans. This includes financial resources, human capital, technology, and other assets.

Risk Management :

Identifying and mitigating risks is essential for long-term success. This involves assessing potential risks and developing strategies to manage or minimize them.

Performance Measurement and Monitoring :

Establishing key performance indicators (KPIs) and metrics to measure progress towards long-term goals is important. Regular monitoring and evaluation of performance help in identifying any deviations from the plan and making necessary adjustments.

Organizational Alignment :

Ensuring alignment between the long-term plan and the organization’s structure, culture, and capabilities is critical for implementation success.

Stakeholder Engagement :

Engaging with stakeholders, including employees, customers, investors, and community members, is essential for gaining support and buy-in for the long-term plan.

Adaptability and Flexibility :

Long-term planning should be flexible enough to adapt to changing market conditions, emerging trends, and unforeseen challenges.

Process of Long-term Corporate Planning:

Vision and Mission Development

• Vision Statement: Define the long-term aspirations and desired future state of the organization.
• Mission Statement: Clarify the organization’s core purpose, values, and primary objectives.
• Internal Analysis: Assess the organization’s strengths and weaknesses, including resources, capabilities, and operational efficiency.
• External Analysis: Examine external factors such as market trends, competitive landscape, regulatory environment, and technological advancements using tools like SWOT (Strengths, Weaknesses, Opportunities, Threats) and PESTEL (Political, Economic, Social, Technological, Environmental, Legal) analysis.

Goal Setting

• Strategic Objectives: Establish long-term goals that are specific, measurable, achievable, relevant, and time-bound (SMART).
• Prioritization: Prioritize goals based on their strategic importance and potential impact on the organization.

Strategy Formulation

• Strategic Initiatives: Develop broad strategies to achieve long-term goals. This includes identifying key initiatives, competitive positioning, market entry or expansion strategies, and innovation plans.
• Scenario Planning: Consider different future scenarios and develop flexible strategies to address various potential outcomes.
• Budgeting: Allocate financial resources to support strategic initiatives, ensuring sufficient funding for long-term projects.
• Human Resources: Plan for workforce requirements, including hiring, training, and development to support long-term objectives.
• Technological Resources: Invest in technology and infrastructure necessary for future growth.

Policy and Procedure Development

• Policies: Establish policies and procedures to guide decision-making and ensure consistency across the organization.
• Governance: Define governance structures and accountability mechanisms to oversee the implementation of the long-term plan.

Implementation Plans

• Action Plans: Develop detailed action plans that outline specific tasks, responsibilities, timelines, and milestones.
• Project Management: Use project management techniques to track progress, manage resources, and ensure timely completion of strategic initiatives.
• Key Performance Indicators (KPIs): Identify KPIs to monitor progress toward strategic objectives.
• Regular Reviews: Conduct regular performance reviews and assessments to evaluate the effectiveness of strategies and make necessary adjustments.

Communication and Engagement

• Stakeholder Communication: Communicate the long-term plan to all stakeholders, including employees, management, investors, and customers, to ensure alignment and commitment.
• Engagement: Foster engagement and collaboration across the organization to support the successful implementation of the plan.

Monitoring and Adaptation

• Continuous Monitoring: Regularly monitor the external environment and internal performance to identify changes and emerging trends.
• Adaptation: Be flexible and ready to adapt strategies and plans in response to new information, market shifts, and unforeseen challenges.

Feedback and Continuous Improvement

• Feedback Loops: Establish mechanisms to gather feedback from stakeholders and incorporate lessons learned into future planning cycles.
• Continuous Improvement: Foster a culture of continuous improvement to refine strategies and processes over time.

Challenges of Long-term Corporate Planning:

Uncertainty and Unpredictability

Future market conditions, technological advancements, economic fluctuations, and geopolitical changes are inherently uncertain, making it difficult to predict long-term outcomes accurately.

Rapid Technological Changes

The fast pace of technological innovation can quickly render long-term plans obsolete. Organizations must continuously adapt to new technologies and integrate them into their strategic plans.

Globalization and Market Dynamics

Expanding into and competing in global markets introduces complexities related to diverse regulatory environments, cultural differences, and volatile market conditions, complicating long-term planning.

Resource Constraints

Allocating resources effectively over a long period is challenging, especially when balancing immediate operational needs with long-term strategic investments.

Internal Resistance

Implementing long-term plans often requires significant changes in organizational processes, culture, and structure. This can face resistance from employees and management accustomed to existing ways of working.

Short-term Pressures

Organizations often face pressures to deliver short-term financial results, which can conflict with the long-term strategic objectives and lead to prioritizing immediate gains over future growth.

Complex Stakeholder Management

Balancing the diverse and sometimes conflicting interests of various stakeholders, including shareholders, employees, customers, and regulators, can complicate long-term planning and decision-making.

Maintaining the relevance of long-term plans requires continuous monitoring and adaptation. Adjusting strategies in response to new information and changing circumstances is essential but challenging to manage consistently.

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All Hail Medium-Term Planning

• Dominic Houlder
• Nandu Nandkishore

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…”

• 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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• Financial Advisor

Financial Planning Basics

Updated: Jun 26, 2024, 4:51pm

No matter the size or scope of your financial goals, a financial plan can help make them a reality.

Financial planning is the process of looking at the current state of your finances and making a step-by-step plan to get it where you want it to be. That may mean devising a plan to become debt-free or figuring out how to save enough money for a down payment on a new home.

This process can include many aspects of personal finance, including investing, debt repayment, building savings, planning for retirement and even purchasing insurance.

Anyone can engage in financial planning—it’s not just for the wealthy. You can get started on making financial goals on your own, and if you choose, you can work with a financial professional to help devise the smartest plan to make those goals a reality.

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5 Steps to Create a Financial Plan

A financial plan is devised of smaller goals or tasks that will help support you along your financial journey. Create a financial plan with these five steps:

1. Identify Your Financial Goals

By identifying your financial goals, you’ll have a clear idea of what you need to accomplish to make them happen. Your goals should be realistic and actionable and include a timeline of when you want to accomplish them.

Making a goal to pay off credit card debt by a certain date, for example, would be an appropriate financial goal that will set you up for success.

2. Set a Budget

Having a clear picture of your finances will make it easier to achieve any financial goals. A budget can help you understand where your money is going each month. It can also help you identify where you may be overspending, giving you opportunities to cut back and allocate that money elsewhere.

One of the easiest budgets to start with is the 50/30/20 budget . This budget plan allocates your monthly income into three buckets: mandatory expenses (50%), savings and debt repayment (20%) and discretionary spending (30%). This is just one of many types of budgeting plans out there.

A budget should be a guide to help you understand your monthly finances and devise smaller goals that will bring you closer to your long-term financial goals. You likely won’t always follow your budget down to every single penny; keeping this in mind will help you stay on track, rather than get discouraged and give up on budgeting altogether.

There are apps out there that make budgeting much easier by helping you visualize your spending and savings choices each month. Some budgeting apps even give you the option to enter your financial goals directly into their platform to help you stay on track. A fully featured budgeting app allows you to track spending, manage recurring bill payments, set savings goals and manage your monthly cash flow.

3. Build an Emergency Fund

Building an emergency fund will help make sure that a financial emergency doesn’t become a catastrophic financial event.

Experts usually recommend having six months’ worth of living expenses saved to cushion you, should the unfortunate unexpected happen, such as losing a job. But six months’ worth of money can be unattainable for those who may be struggling financially, or those living in tight financial means each month.

You can start building an emergency fund by setting a few dollars aside each paycheck. You can start with a small fund goal of $100 to $200 to establish your fund. From there, you can create other smaller goals that will add up to a larger financial cushion. Some budgeting and savings apps also give you the option of rounding up to the nearest dollar in transactions and funnel that spare change toward your savings.

4. Reduce Your Debt

Having to make debt payments each month means you’ll have less money to allocate toward your purchase goals. Plus, carrying credit card debt can be expensive; every month, you’re accruing interest on your balance, which can make it take longer to pay off.

There are a variety of debt payoff methods out there. Two of the most popular include the debt snowball and debt avalanche methods . With the snowball method, you’ll pay off your smallest balance debts first, then make your way to the ones with the higher balances. The debt avalanche, on the other hand, starts with higher interest rate debts first.

5. Invest for the Future

Although risky, investing can help grow your money, even if you’re not wealthy. You can get started with investing by enrolling in your company’s 401(k) plan or opening a low-or-no fee account through an online broker .

Keep in mind that investing always involves some risk; you could end up losing the money you invest. There are also robo-advisors that automatically recommend investments based on your goals and risk tolerance.

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Bottom Line

A financial plan is composed of a series of smaller goals that will help you achieve a larger financial goal, such as purchasing a home or retiring comfortably. A solid financial plan includes identifying your goals, creating a budget, building an emergency fund, paying off high interest debt and investing.

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Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.

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I want to invest around Rs 10 lakh in stocks and MFs for long term. I am new to equities, how to go about it?

One should also not invest a large sum in equity funds at one go. instead, put the money in a short duration debt fund and start a systematic transfer plan into the equity scheme..

• Updated Jun 28, 2024, 9:02 AM IST

I want to invest around Rs 10 lakh in stocks and mutual funds for the long term. Since I am unfamiliar with the stock markets, please suggest which stocks and mutual funds should I invest in. 

Reply by: Raj Khosla Founder and MD – MyMoneyMantra.com

You are on the right track. Long-term investments in stocks and equity funds can be very rewarding. However, please note that investing in shares on your own may seem easy, but is fraught with risks. 

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• I have taken a home loan from my parents for a house. Can I claim tax deduction under 80C and 24(b) of I-T Act?
• I want to earn Rs 1 lakh monthly by investing Rs 75 lakh in lump sum. Is it possible?

Individual stocks can be very volatile and if you do not have the time to research stocks or the knowledge to analyse their financials, you are better off investing in equities through mutual funds. Not only is your money managed by professionals but the risk is diversified across a basket of securities across several sectors.   Given that you have a long term investment horizon, you should distribute your money across 3-4 equity funds from different market segments. Nippon India Large Cap Fund and ICICI Prudential Bluechip Fund are good large cap funds you can consider. ICICI Prudential Large & Midcap Fund and HDFC Large & Midcap Funds are also worth considering. 

Among flexi-cap funds, you can go with Parag Parikh Flexi Cap fund or Franklin India Flexicap. For midcap exposure, consider Motilal Oswal Midcap Fund or Kotak Emerging Equity Fund. For small caps, invest in Axis Small Cap Fund or Nippon India Small Cap.

But one should also not invest a large sum in equity funds at one go. Instead, put the money in a short duration debt fund and start a systematic transfer plan into the equity scheme. For instance, if you have Rs 10 lakh to invest, identify 3-4 equity funds from different segments and put that amount in short-term debt schemes of the same fund houses. 

Then start systematic transfer plans that will shift Rs 20,000-25,000 into the equity schemes every month. Your money grows at 7-7.5% in the debt funds and slowly gets transferred into the equity funds over 24-30 months even as you benefit from the volatility in the equity markets.

(The views by experts are their own and not that of Business Today. Readers are encouraged to consult a qualified financial experts or a SEBI-registered investment advisor before making any investment decision)

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Best Life Insurance Companies of July 2024

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Life insurance is as complicated as the policyholders and beneficiaries who use it. That means there's no single "best" life insurance company. Instead, you can find the best option based on what you want or what you prioritize.

Best Life Insurance of 2024 Summary

• Best for customer satisfaction: State Farm Life Insurance
• Best for older adults: Prudential Life Insurance
• Best for agent support: New York Life Insurance
• Best for long-term care: Columbus Life
• Best for high returns: Allianz Life
• Best for term life: North American Company

Top Life Insurance Companies of 2024

While there is no such thing as the objective best life insurance policy, you will be able to find the best insurance policy for your specific needs. Here are our picks for the best life insurance companies, whether you want to use your life insurance policy to build wealth through cash value or you're just looking for a term life insurance policy .

Best Life Insurance for Customer Satisfaction

State farm life insurance.

State Farm Life Insurance gets the best life insurance ranking in J.D Power's Individual Life Insurance Study, with a score of 843/1,000. The company is also ranked A++ with AM Best for its financial stability with term, universal, and whole life insurance options. 

All State Farm policies have to be purchased through a State Farm agent. Your agent can help you bundle and save or buy one policy. State Farm is also among the companies offering "survivorship universal life insurance ," which means the policy covers two people, and it kicks in after the second person dies. Couples looking to maximize their death benefit for beneficiaries with one premium payment each month may enjoy lower overall costs.

State Farm agents can run quotes and compare options to find the right plans for each applicant. The range of options, discounts, and familiar name all contribute to the popularity of State Farm's life insurance.

Read our State Farm Life Insurance review .

Best Life Insurance for Older Adults

Prudential life insurance.

Prudential Life Insurance is available in all states except New York. New York residents can buy the Pruco Life of New Jersey VUL Protector plan. This plan allows buyers to pull money out of their plan to pay for nursing home expenses. Cash value policy premiums are fixed, so you won't have to worry about extra costs later on. Internal costs are low, which minimizes risk. Due to age, many older adults want a safe investment option for their money. Prudential VUL Protector invests to avoid loss. That also means you're not as likely to see big increases in your available funds outside of what you deposit.

Read our Prudential Life Insurance review .

Best Life Insurance for Long-Term Care

Columbus life.

Columbus Life offers a wide range of riders to customize your policy with affordable premiums. The company also allows you to convert term policies to whole life insurance policies until the end of your term (generally around age 70). For this and many other reasons, customer satisfaction is high.

When using living health benefits (otherwise known as accelerated death benefits), buyers are allowed to pull money from policies early to pay for medical bills, living costs, etc. under certain circumstances. Most companies use a discounted death benefit, which reduces your final payout using two models. Columbus uses the lien method, which makes it easier to calculate the financial impact of pulling money out early.

Best Life Insurance for High Returns on Income

Allianz life.

Allianz Life plans are geared towards high-income adults looking for more tax-free income. Allianz offers a 40% multiplier bonus with a 1% annual assets charge. In short, the professionals managing your investments take 10%. Overall, your investments would pull in an extra 14%-1% asset charge. This means you end up with 3% more than what you deposit every year your life policy is active. This plan offers strong returns when using a life policy to supplement your retirement savings. Allianz also offers specialized plans to grow your income by as much as 20% according to some estimates.

Of note: Allianz also offers plans for foreign nationals, including those with H-1B visas.

Best Life Insurance for Agent Support

New york life insurance.

New York Life Insurance agents go through extensive training before they ever hit the sales floor. What does this get you? Policies vary widely, and New York Life offers both large and small payouts. Some policies have significant penalties for early withdrawal, but taking a loan offers more options. Whatever your questions, New York Life agents are trained to offer comprehensive support giving you accurate information about its policies every time. The company comes in at position eight in J.D. Power's latest life insurance customer satisfaction study.

Read our New York Life Insurance review here.

Best Life Insurance for Term Life

North american company.

North American Company offers term policies alongside accelerated death benefits for critical, chronic, and terminal illnesses and more. The company allows one conversion on a 20-year policy at 15 years or 70 years old (whichever is earlier). The conversion cannot happen later than the five-year marker regardless of which policy you choose or the length. North American Company also offers a term policy with a lower premium renewable up to the age of 95 for qualifying insureds.

Types of Life Insurance

While there's many different types of life insurance policies , broadly speaking, there are two types of life insurance: temporary and permanent. Let's go over each in detail.

Temporary life insurance

Temporary life insurance is often called term life insurance. This type of policy covers you for a set amount of time before expiring, usually between 10-30 years. If you pass away after your policy expires, your family won't receive any benefits. Additionally, your policy won't accrue cash value like a permanent policy. That said, some term life insurance policies offer a conversion from term to whole life insurance, so you can extend your coverage. 

Because its benefits aren't guaranteed, term life policies are generally cheaper than permanent life insurance. That said, the vast majority of term life insurance policies never pay out. on

Permanent life insurance

Permanent life insurance is an umbrella term for a variety of life insurance policies that will insure you indefinitely and guarantee a payout as long as you maintain your policy. Policy types that fall under permanent life insurance includes:

• Whole life insurance
• Universal life insurance
• Variable life insurance
• Variable universal life insurance
• Simplified life insurance
• Guaranteed issue life insurance

These policies vary widely in purpose and intended buyers, but all guarantee death benefits to your loved ones. Some permanent life insurance policies, like whole, universal, and variable have a cash value component , which you can use as a savings tool or to leave your heirs a larger death benefit.

How to Pick the Best Life Insurance Policy for You

Finding the right fit in life insurance starts with finding a trusted insurance agent. Because there are so many state regulations, shopping for homeowners or auto insurance can be easily done online. Life insurance is not required. So it's a voluntary purchase. Many buyers don't know what they need or when they need it. Before making your selection, consider a few things:

Some companies will sell you a policy for your child as soon as they're born. While this may seem morbid, early sign-up means lower rates for a policy your child could enjoy in the future. Regardless, early sign-up equates to more policy for lower premiums and a higher likelihood of acceptance. At 20, you may be healthier and be able to pay into the policy for a longer period compared to when you're 50 with more age-related conditions.

As a general rule, never agree to more than you can afford. For the average life insurance agent, their job is to sell you a large policy with a large commission. Consider not only how much you make now, but how likely your current income is to continue. If you work on a project basis and your project is scheduled to end in 12 months, you may want to reconsider a policy premium outside your monthly savings.

How much are you prepared to buy? Some people only want a small policy to cover funerals and other end-of-life expenses. Others build a life policy into their retirement plan. Whatever direction you're going, involving a financial planner could help you make the right decisions. Depending on the carrier, customers can also compare set limits with index universal life policies, which set no limit. These policies never expire, and the value builds over the entirety of your life.

Living Benefits

Life happens unexpectedly. You could be healthy one day and in the hospital the next. Many life policies offer living benefits. These allow you to draw a limited amount out of your policy to cover medical and other bills you cannot pay while sick.

Much like a 401(k), many life insurance policies have penalties for early withdrawal. No matter what policy you want, this question is critical to an informed decision. It's a question of how early you can withdraw and how much you'll lose from the total to have the money in 10 years instead of 30 or after death.

Some policies require insured parties to pay premiums for at least one year before any significant payout would be available. Suicide exclusions are common. Even with no medical exam policies, the company may still do a check for known conditions. An insurance company has to mitigate its risk.

Flexibility

Once you've been denied a life insurance policy, a mark goes on your record. No matter the reasons, other insurance companies may deny you coverage based on the first denial. So consider your whole situation and choose your policy carefully before you submit any applications. Some policies have greater flexibility if you lose your job or otherwise can't make payments. Others will lapse if you miss even one payment.

Payment Type

Even within whole life or term life insurance policies, customers have the option to choose guaranteed fixed or variable rates. Some have guaranteed payouts, but you'll need to ask your agent for details.

What is your intended use? Why are you shopping for a life insurance policy in the first place, and what are your goals? Many successful financial planners also have a background in life insurance. So while they may not be able to find you a specific life insurance policy, financial planners can help you set out a blueprint for your purchase.

Why You Should Trust Us: How We Reviewed the Best Life Insurance Companies

In life insurance, it's easy to get "sold a bill of goods." Many life insurance agents pass a state test to be thrown into the deep end. Agents sell the company product, but not all know the products. In this vein, we look at the products each company offers. We also look at agent training.

A good life insurance agent may not volunteer all facts upfront. But a company's agents should answer questions about its products accurately and in a way the average consumer can digest. Agents should be able to inform you about the long-term benefits and limitations. This will help customers find the right policy for their long-term plan.

We consider affordability, policy sizes available, and performance for a comprehensive assessment in our life insurance rating methodology . If you can, we recommend also working with a financial advisor to make a plan for your future with life insurance.

Our Expert Panel for The Best Life Insurance Companies

To inform our choices for the best life insurance companies, we spoke with the following experts:

• Paul LaPiana , head of product at MassMutual
• Barbara Pietrangelo , CFP, CLU, and chair of the nonprofit Life Happens
• Wykeeta Peel , Corporate Vice President and Market Manager, African American Market Unit at New York Life

The Experts' Advice on Choosing The Best Life Insurance for You

How much life insurance coverage do you believe the average buyer should have.

Paul LaPiana, Head of Product at MassMutual

"There are different approaches to determining how much life insurance you need. One is the 'human life' approach, which estimates the current value of your future earning potential. Another is securing specific coverage to pay off debts such as a mortgage or provide for the education of children. A comprehensive protection plan should provide the right amount of coverage over the course of your working life and into retirement."

Barbara A. Pietrangelo, Chair of Life Happens

"There is no one-size-fits-all life insurance policy because everyone is different. One way to get a rough estimate is to multiply your income by 10 to 15; another is adding $100,00 to that amount, should you have a child and anticipate college education expenses.

Your best bet is to talk to a financial professional or use the Life Insurance Needs Calculator on LifeHappens.org to analyze what's right for you."

Wykeeta Peel, Corporate Vice President & Market Manager African American Market Unit at New York Life

"As you consider what policy best meets your needs, it can help to answer four key questions: First, how much death benefit do you need? Second, how long will you need that coverage? Third, what is your budget (or how much monthly premium can you afford to pay?), and finally, what is your investment risk tolerance?

To determine how much death benefit makes sense, it's helpful to think beyond using life insurance to cover funeral expenses and consider whether anyone is relying on the policy owner's income to maintain a lifestyle, pay rent or a mortgage, or fund a child's education and for how long.

There are various rules of thumb regarding the right amount of Life insurance coverage. Some tips can be found online, but they only provide an estimate and don't necessarily factor in an individual's specific needs. In my opinion, human guidance, powered by technology, is required. Basically, it comes down to how much money your loved ones would need to remain on firm financial ground if your earnings were no longer in the picture and that is different for everyone."

What is the biggest opportunity you see for improvement in the life insurance industry?

"Increased accessibility through digital and other channels as well as through underwriting enhancements. Increased tailoring of products and features. And an increased emphasis on health and wellness programs."

"Having enough qualified insurance professionals to walk potential buyers through the multiple benefits of life insurance will be pivotal to the growth of the industry. Education is a key factor here, as professional agents also need to be able to explain life insurance and its benefits in an easy, digestible way, especially when there are so many misconceptions about life insurance."

"The need for life insurance is greater than ever. In fact, a recent New York Life Wealth Watch survey found that 37% of adults have been thinking about life insurance more often these days – and half of adults report that financial products that provide protection (50%) and reliability (50%) are more important now compared to last year. This may be especially true for middle-market and Cultural Market families.

Our organizational structure of having Cultural Market agents embedded in the communities where we live and work allows us to understand the needs of diverse communities and develop solutions that resonate with them."

What advice would you give to buyers who are debating whether or not to buy life insurance?

"It is difficult to say with any certainty how healthy you will be years from now. That's why securing life insurance, and insuring your insurability, today, when you are the youngest you'll ever be again, and perhaps your healthiest is a wise decision."

"Do you love someone? If the answer is yes, then life insurance is certainly something you should consider. Many buy gifts and experiences to express their love, but haven't considered that life insurance is just another way to say I love you. Nothing says support like ensuring your family's financial security and peace of mind."

"If you have someone depending on your income, you should consider purchasing life insurance. A death benefit from a life insurance policy can replace income from the loss of a breadwinner, ensure a family can stay in their home, fund educational or retirement expenses, address debt and so much more.

A life insurance policy can also help you grow your family's wealth over time. Once the risk of an unexpected loss has been managed, you can begin to think more broadly about your family's financial future. Life insurance can enable your mindset to shift from death to growth."

What's the most important thing buyers should look for when choosing a life insurance agent/company to buy from?

"With life insurance, you are securing a future commitment that may be decades away. Research the company behind the policy to ensure it has high financial strength ratings, longevity, and an excellent track record of paying claims."

"When looking for an insurance agent or company, be sure to do your research. When comparing companies, be sure to remember that the policy features that fit you and your loved ones best is the most important factor. Don't automatically assume you should buy from the higher-rated company.

If the policy from the other company has more of what you're looking for, it might be the better choice. If you're unsure where to start, try the Life Happens Agent Locator to find an insurance professional in your area."

• "The insurers' track record: At its core, life insurance is protection - a hedge against the unexpected - and you are paying premiums in exchange for the promise that the insurer will be there when you need them, so the financial strength and track record of the company backing your policy is critical.
• Customer service: Are service professionals available by phone and digital channels? Is there is an online dashboard where you can manage your policy? Beyond ensuring assistance is available after you purchase a policy, it's also critical to ensure you have access to trusted advice and guidance before you buy.
• Flexibility in conversion: How easy is it to change? Life can be unpredictable and while term insurance can cover your loved ones through a critical period of time, you may decide that access to cash value is an important piece of your strategy.
• Accelerated online applications : Online applications are convenient but don't replace human guidance. Keep in mind that accelerated online applications may have a maximum coverage amount, meaning that you may not be able to get all the coverage you may need exclusively through an online process.
• A range of payment options: It's important to understand how often you're required to make premium payments and whether and how often you can change the frequency of payments."

Best Life Insurance FAQs

A whole life insurance policy has a schedule of payments to earn the total death benefit. Past a certain waiting period, you'll get the full payout if something happens. However, you can also pay it off entirely if you live longer or make larger payments early. In either of these situations, you are no longer required to make further payments to keep the policy active.

There isn't one best life insurance company, because the best option for you will depend on the type of policy you're looking for. It's best to work with a qualified insurance agent to help you find the best coverage. If you're deciding between multiple similar options, it's also worth consulting J.D. Power's life insurance customer satisfaction study . The latest study ranks State Farm as the top pick for individual life insurance, outpacing Nationwide by three points.

Each situation is different and requires a knowledgeable life insurance agent to assess your best options. Bring all your questions and the coverage you're looking for to an insurance agent near you to explore your options.

No, medical exams aren't necessarily required for life insurance. Some life insurance policies are advertised as "no medical exam." This doesn't mean the insurer won't ask you about known conditions or look at medical records. You can find our guide on the best no exam life insurance here.

The most popular type of life insurance is term life insurance . Term policies are only good for a specified term that you select when opening the policy — the fact that they don't last forever also makes these policies the most affordable. That said, a very slim minority of term life insurance ever pays out. 

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