The differences between long-term and short-term planning

Last updated on: October 26, 2022

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

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

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

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What are long-term and short-term planning?

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

What is short-term planning?

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

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

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

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

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

What is long-term planning?

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

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

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

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

What is medium-term planning?

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

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

Key differences between long-term and short-term planning

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

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

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

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

The difference between long-term and strategic planning

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

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

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

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

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

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

How to set long-term goals in 5 steps

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

Step 1: Define your vision

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

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

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

Step 2: Set SMART goals

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

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

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

Step 3: Break down your goals into smaller ones

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

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

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

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

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

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

Step 4: Prioritize

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

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

Step 5: Keep updating your list

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

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

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

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

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

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

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

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

What Is Long-Range Planning?

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

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

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

The History of Long-Range Planning

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

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

The Relationship Between Strategic Planning and the Long-Range Plan

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

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

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

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

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

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

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Characteristics of Long-Range Planning

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

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

Techniques for Focusing Long-Range Thinking

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


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

Handle uncertainty and unexpected change

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

Understand whether specific goals and targets are realistic

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

Optimize long-range planning practices

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

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Examples of Long-Range Planning

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

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

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

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

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A Beginner’s Guide to Long Range Planning


Most organizations understand the need to plan for the future, but fail to take actual steps toward achieving their strategic goals and take their business one step further. Even worse, failing to plan may put the business into hardships and failures. Though market changes and other dynamics are in constant flux and are therefore difficult to mitigate, having a long range plan is a key to creating stability, purpose, and direction in your business. By engaging in the long range planning process, you not only define what your business is today, but what you hope it will be in the distant future. In this post will we review the long range planning definition and dive into the details of long range planning.

What is Long Range Planning? 

We’ll start by understanding the definition for long range planning to help answer the question of “what is long range planning”.  Long range planning is the process used to implement an organization’s strategic plan. It is about aligning the business’ long-term goals and developing action plans in line with the strategic plan. Certainly, accounting for external variables, accurately forecasting future market conditions, and determining the need for future diversification can all require almost prophetic vision which is not what a long range planning tool can achieve. However, planning long-range helps your business engage in self-scouting by assessing strengths and weaknesses and creatively proposing solutions that will propel your organization forward. It will also provide the concrete immediate benefit of charting a path to future success that can focus and drive the collective efforts of your team, resulting in greater productivity and vision.

The times scale for long range plans can vary from three years to one or two decades depending on the type of business. For example, companies where returns are measured over long periods of time will need a longer outlook whet thinking about their long range planning. A long range plan is not about fixing immediate issues, but about changing the direction of the organization to meet its long term goals.

Relationship between Strategic Planning and the Long Range Plan

Strategic planning is a process to determine long-term organizational goals after careful examination of the organization’s current business and what it should become. The final strategic plan will usually consist of non-actionable goals and statements of what the organization should focus on. The objective of the Long Range Plan is to turn these strategic plans into actionable steps to achieve the goals. Long range strategic planning is when you combine the two pieces together.

Long Range Planning Template 

Although there are no standard templates for creating a long range business plan, below we have identified a list of things that are essential to a long range business plan and that should be included in the long range planning process.

Company Mission

  A company mission and vision serve as a guide to your long range planning activity. You don’t always know where you want to go as a company until you know where you stand currently. All functions of a business are guided by its mission, so one of the first steps you should take in developing a long range plan is to define the mission of the organization. This creates an identity that can guide your long range planning for years to come. The statement should answer the key questions that drive your business: Where is your company headed? What do you want your company to be? Have them written down, then you’ve completed the first and most critical step in creating a long term strategic plan.

Company Vision

  Vision is second only to mission in determining the thrust of your long range business plan. It provides concrete ways for stakeholders, especially employees, to understand the meaning and purpose of your business. Unlike a mission statement, which describes the Who, What and Why of your business, a vision statement describes the desired long-term results of your company’s efforts which is all based on your long range planning. Think about where you want it to be in five, ten, or twenty years. What successes would you like to celebrate at those waypoints, and what do they look like? How will your mission grow or change as your business confronts and overcomes obstacles and continues to grow? What kind of culture shift will be necessary for your business to conquer near-future obstacles and adapt to continued future success? What other lines of service or geographic regions will you want to enter eventually to open new markets? These are key considerations when defining your vision.  Research shows  that employees who find their company’s vision meaningful have engagement levels of 68%, which is 18 points above average. A strong vision statement will allow you to sail through the rest of the long range planning activity smoothly.

SWOT Analysis

  A good exercise that dovetails with long range planning is conducting a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. This will provide you with points of focus for your long range plan by illustrating the things that provide current successes, the weaknesses that are holding your business back, the opportunities for future success that are in front of you, and the threats to consistent success that may emerge.

A SWOT analysis can show you where you need to improve in the present to realize future gains. It also defines areas of opportunity and provides a chance to talk about how to grasp them. Finally, it forces you to assess your weaknesses that can result in future threats to your business and consider ways of mitigating risks and diversifying to strengthen your business.

Stagger Goals

Long-range planning is focused on long-term success, but to be successful in the long-term a business must remain viable in the present. Therefore, don’t forget to stagger goals and create ample opportunities to gain successes and avoid threats throughout the duration of your long rang plan term. For example, it’s a good idea to set short-term, intermediate, and long-term goals for your business. This will help create a trajectory of consistent success that not only provides concrete stability but will also create a culture of success for your business in which you and your employees refuse to accept failure. Charting out goals throughout your long range plan duration also provides a road map for progress and gives you a way of being accountable for goal attainment throughout.

Short-term goals should include everything you want to achieve over the next 36 months. They should be “S.M.A.R.T.” (Specific, measurable, actionable, reasonable, and timely). An example of S.M.A.R.T. goals can be “increase online sales by 25% in 6 months” or “launch this product by Q2 2021”.

Outline strategies

Thinking about future successes and defining goals is critical, but don’t forget to set the strategy as well. Think of your long-range plan as a road map. A road map isn’t very helpful if it just plots potential destinations. Rather, you need to see the roads that connect those destinations to navigate the journey. Strategy provides those byways to success, so make sure that they are well-conceived, practical, and adaptable if the circumstances change. Detours happen, and you must know how to get around any metaphorical bridges that are out there. Strategies are the steps you’ll take to meet your short-term goals.

Create an action plan

An action plan is an essential part of the long-range planning process. It puts your strategies into actionable items. It is a working document that is easy to change and update, specific about what, when, who, how the action will be carried out and measured.

Review Regularly and Be Adaptable 

Long range planning activity is not a one off session that you put off after the plan is created. You need to check in periodically on your progress and make changes to your goals, strategies or action plans if they don’t make sense anymore. As you modify your plan, keep in mind that no plans are ever perfect. You will be confronted with unexpected challenges that need you to change something in the long range plan immediately. Be agile and take advantage of opportunities to improve upon your current plan.

Long Range Plan  Examples 

A long range plan is also known as a strategic plan. The core elements inside a long range plan include but not limited to objective, strategies, and tactics. An example of one piece inside a long range plan can be as followed:

Long Term Objective: Triple the current user base within next 5 years

Strategy 1.1: Implement free premium plan to attract new users

  • Tactic 1.1.1: Research and define the scope and target of the Premium plan
  • Tactic 1.1.2: Identify channels to reach out to potential leads
  • Tactic 1.1.3: Develop marketing campaigns to communicate to leads
  • Tactic 1.1.4: Test out the campaigns and review before full launch

Strategy 3.1: Increase

If your organization performs better than you have expected, or worse, or if the market condition has been for the product or service you provide, you can always go back to the long range plan and make changes to it.


Success isn’t something that just happens by coincidence. It is the product of a sound strategy, critical thinking, and timely execution. Long range planning will help you work towards your actual long-range plan and can help your business harness the power of the present and plot a path to a more successful tomorrow.

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How to set up and achieve long term goals for a business

Download our free Strategic Planning Template Download this template

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.

Free Template Download our free Strategic Planning Template Download this template

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 and long term goals difference infographic

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.

how to achieve long-term goals in business infographic

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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Woman looking at data

Planning, budgeting and forecasting is typically a three-step process for determining and mapping out an organization’s short- and long-term financial goals:

  • Planning  provides a framework for a business’ financial objectives — typically for the next three to five years.
  • Budgeting  details how the plan will be carried out month to month and covers items such as revenue, expenses, potential cash flow and debt reduction. Traditionally, a company will designate a fiscal year and create a budget for the year. It may adjust the budget depending on actual revenues or compare actual financial statements to determine how close they are to meeting or exceeding the budget.
  • Forecasting  takes historical data and current market conditions and then makes predictions as to how much revenue an organization can expect to bring in over the next few months or years. Forecasts are usually adjusted as new information becomes available. 

The process is usually managed by a chief financial officer (CFO) and the finance department. However, the definition can be expanded to include all areas of organizational planning including: financial planning and analysis , supply chain planning , sales planning , workforce planning and marketing planning .

Basic business accounting practices date as far back as the 1400s, when Venetian investors kept track of their Asian trade expeditions using double-entry bookkeeping, income statements and balance sheets. The word “budget” is from the old French word “bougette,” meaning “small purse.” The British government began to use the phrase “open the budget” in the mid-1700s, when the chancellor presented the annual financial statements. Businesses began to regularly use the term “budget” for their finances by the late 1800s.

Modern business forecasting began in response to the economic devastation of the Great Depression of the 1930s. New types of statistics and statistical analyses were developed that could help business better predict the future. Consulting firms emerged to help companies use these new prediction tools.

Accounting and forecasting were difficult in the early 20th century because they depended on laborious hand-written equations, ledgers and spreadsheets. The emergence of mainframe computers in the 1960s and personal computers in the 1980s sped up the process. Software applications such as Microsoft Excel became widely popular for financial reporting. However, Excel programs and spreadsheets were prone to input errors and cumbersome when various departments or individuals needed to collaborate on a report.

By the start of the 2000s, companies gained access to ever-growing operational data sources, as well as information outside corporate transaction systems — such as weather, social sentiment and econometric data. The vast amounts of available data for forecasting created a need for more sophisticated software tools to process it.

Numerous planning software packages emerged to handle this data complexity, making planning, budgeting and forecasting faster and easier — both for processing and collaboration. With predictive insights drawn automatically from data, companies could identify evolving trends and guide decision making with foresight, not just hindsight.

Today, cloud-based systems are becoming the standard, providing more flexibility, security and cost savings — helping organizations generate accurate predictions and budgets with fewer errors.

But despite these advancements, businesses are still quite dependent on traditional spreadsheets. 1   Seventy percent of businesses say they rely heavily on spreadsheet reporting, with only 16 percent using on-premise specialist software — and only ten percent using cloud software for planning.

Many businesses still base their strategy on annual plans and budgets, which is a management technique developed over a century ago. But in today’s more competitive environment, organizations are realizing that plans, budgets and forecasts need to reflect current reality — not the reality of two, three or more quarters ago. Continuous planning and rolling forecasts are becoming widely used methodologies to update plans, budgets and forecasts frequently throughout the year, on a quarterly or even monthly basis. These approaches help managers spot trends before their competitors — helping them make better informed, more agile decisions about pricing, product mix, capital allocations and even staffing levels.

Creating and implementing a sound planning, budgeting and forecasting process helps organizations establish more accurate financial report and analytics — potentially leading to more accurate forecasting and ultimately revenue growth. Its importance is even more relevant in today’s business environment where disruptive competitors are entering even the most tradition-bound industries.

When companies embrace data and analytics in conjunction with well-established planning and forecasting best practices, they enhance strategic decision making and can be rewarded with more accurate plans and more timely forecasts. Overall, these tools and practices can save time, reduce errors, promote collaboration and foster a more disciplined management culture that delivers a true competitive advantage.

Specifically, companies are able to:

  • Quickly update plans and forecasts in response to new threats and opportunities, identifying risk areas early enough to rectify issues before they are serious
  • Identify and analyze the impact of changes as they occur
  • Strengthen the links between operational and financial plans
  • Better plan and predict cash flows
  • Improve communication and collaboration among plan contributors
  • Consistently deliver timely, reliable plans and forecasts, plus contingency plans, for a range of possible events
  • Analyze variances and deviations from plans and promptly take corrective action
  • Create a budget specifically for growth and having confidence in how much can be spent
  • More accurately manage sales pipelines while tracking performance against targets
  • Make more confident strategic decisions based on hard data, instead of hopes or guesswork
  • Provide evidence of an organization’s future trajectory to potential investors and lending institutions based on multiple data sources and sophisticated analysis

Budgeting, planning and forecasting software can be purchased as an off-the-shelf solution or as part of a larger integrated corporate performance management (CPM) solution.

Advanced software solutions enable organizations to:

  • Measure and monitor performance through interactive, self-service dashboards and visualizations
  • Examine root-causes with high-fidelity analysis of dimensionally rich data
  • Evaluate trends and make predictions automatically from internal or external data
  • Perform rapid what-if scenario modelling and create timely, reliable plans and forecasts

Planning is easier and more effective when practitioners follow well-established best practices. Software solutions that support these practices can enhance the timeliness and reliability of information and increase participation by key people throughout the organization; especially those at the front lines.

Leading companies have moved to solutions that address the full planning cycle — data collection, modeling, analytics and reporting — on a common planning platform with lean infrastructure requirements. Such platforms can handle a diverse range of business functions, from budget-focused finance tasks to, for example, supply chain-focused planning for retail environments with thousands of SKUs (stock keeping units).

Companies like IBM offer holistic, integrated software solutions to streamline the planning, budgeting and forecasting process. The logic is that to adapt to today's quickly changing business conditions, an organization needs one solution that creates a single source of truth and visibility into all its data. These solutions can extend well beyond the financial aspects of the business, becoming a powerful forecasting engine across the enterprise. With these agile planning and exploratory analytics software solutions — whether in the cloud or on-premises — companies can perform planning, budgeting and forecasting with greater speed, agility and foresight.

Evaluating and selecting planning, budgeting and forecasting software is a complex task. It requires careful consideration of the software’s functionality, its value to the planning process and its ability to support planning best practices. There are also factors such as vendor reliability and support, user community connections and commitment to customer success once the sale is complete.

IBM Analytics (PDF) recently published a guide to help organizations evaluate planning, budgeting and forecasting software — identifying key qualities to look for:

  • Adaptive . Can you rapidly change models and re-forecast frequently, based on input from business units? Can you update plans as often as necessary?
  • Timely . Is your information always current because users contribute directly to a central planning database? Are your consolidations and rollups done automatically to easily meet deadlines?
  • Integrated . Do your planning, analysis, workflow and reporting functions reside on one common platform, reducing the need to maintain “shadow” planning systems?
  • Collaborative . Is your solution web-based? Does it enable participation anytime, from anywhere with a secure connection?
  • Self-service . Are users able to access data and perform complex analysis without the assistance of IT? Are you able to use a familiar spreadsheet interface for faster user adoption and accelerate time to value?
  • Enterprise-scale data capacity . Is your solution capable of handling very large data volumes without limiting cube size? Some solutions do not handle “data sparsity” well — forcing data to be split into multiple cubes for analysis, causing version control issues.
  • Efficient . Are your managers able to spend less time managing data and more time managing the business?
  • Relevant . Do you have the ability to customize views for different user roles, to help increase adoption and process ownership? Do you have formula capabilities that enable modeling of all relevant business drivers?
  • Accurate . Do your plans contain errors because of broken links, stale data, improper rollups and missing components?

The key is not just evaluating product features and capabilities, but also evaluating how those features will be implemented by different users within the organization. It’s important to test any planning solution that will be used by a large variety of stakeholders such as finance, operations, HR and sales.

Discover how one of the largest operators of parking facilities in the Middle East used IBM Planning Analytics to deliver better automation and multidimensional analytical power along with cost advantages.

Learn how the real estate developer enhanced its core planning, forecasting and project management capabilities with IBM technology to drive even greater profitability.

Find out how the company used IBM planning analytics to provide monthly and weekly reporting for engineering, marketing, sales and operations.

IBM Planning Analytics provides a single solution to automate planning, budgeting and forecasting for your enterprise.

Gain the autonomy you crave to find, explore and share insights in the governed, trusted environment you need, with IBM Cognos Analytics.

A comprehensive solution that provides power and flexibility for streamlined, best-practice financial consolidation and reporting.

Transform your marketing organization across people, process and platforms to remove complexity, unlock efficiency, and drive growth.

Learn how companies are delivering dependable business forecasts and optimizing the allocation of resources.

Learn the five common drawbacks to spreadsheets as planning tools

Discover the benefits of embracing data and analytics in conjunction with well-established planning and forecasting best practices.

See how you can synthesize information, uncover trends and deliver insights to improve decision making throughout the enterprise.

Request a live, 10-minute demo and get hands-on experience with IBM Planning Analytics by building a revenue plan.

See how headcount planning is done with IBM Planning Analytics in a quick, click-through demo.

See IBM Planning Analytics in action. Discover how you can take your planning analytics processes to the next level.

1 The Future of Planning, Budgeting and Forecasting Global Survey, Workday and FSN, 2017

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What Is Business Planning?

Why Business Planning Isn't Just for Startups

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

long term planning in business definition

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Business planning takes place when the key stakeholders in a business sit down and flesh out all the goals , strategies, and actions that they envision taking to ensure the business’s survival, prosperity, and growth.

Here are some strategies for business planning and the ways it can benefit your business.

Business planning can play out in many different ways. Anytime upper management comes together to plan for the success of a business, it is a form of business planning. Business planning commonly involves collecting ideas in a formal business plan that outlines a summary of the business's current state, as well as the state of the broader market, along with detailed steps the business will take to improve performance in the coming period.

Business plans aren't just about money. The business plan outlines the general planning needed to start and run a successful business, and that includes profits, but it also goes beyond that. A plan should account for everything from scoping out the competition and figuring out how your new business will fit into the industry to assessing employee morale and planning for how to retain talent.

How Does Business Planning Work?

Every new business needs a business plan —a blueprint of how you will develop your new business, backed by research, that demonstrates how the business idea is viable. If your new business idea requires investment capital, you will have a better chance of obtaining debt or equity financing from financial institutions, angel investors , or venture capitalists if you have a solid business plan to back up your ideas.

Businesses should prepare a business plan, even if they don't need to attract investors or secure loans.

Post-Startup Business Planning

The business plan isn’t a set-it-and-forget-it planning exercise. It should be a living document that is updated throughout the life cycle of your business.

Once the business has officially started, business planning will shift to setting and meeting goals and targets. Business planning is most effective when it’s done on a consistent schedule that revisits existing goals and projects throughout the year, perhaps even monthly. In addition to reviewing short-term goals throughout the year, it's also important to establish a clear vision and lay the path for your long-term success.

Daily business planning is an incredibly effective way for individuals to focus on achieving both their own goals and the goals of the organization.

Sales Forecasting

The sales forecast is a key section of the business plan that needs to be constantly tracked and updated. The sales forecast is an estimate of the sales of goods and services your business is likely to achieve over the forecasted period, along with the estimated profit from those sales. The forecast should take into account trends in your industry, the general economy, and the projected needs of your primary customers.

Cash Flow Analysis

Another crucial component of business planning is cash flow analysis. Avoiding extended cash flow shortages is vital for businesses, and many business failures can be blamed on cash flow problems.

Your business may have a large, lucrative order on the books, but if it can't be invoiced until the job is completed, then you may run into cash flow problems. That scenario can get even worse if you have to hire staff, purchase inventory, and make other expenditures in the meantime to complete the project.

Performing regular cash flow projections is an important part of business planning. If managed properly, cash flow shortages can be covered by additional financing or equity investment.

Business Contingency Planning

In addition to business planning for profit and growth, your business should have a contingency plan. Contingency business planning (also known as business continuity planning or disaster planning) is the type of business planning that deals with crises and worst-case scenarios. A business contingency plan helps businesses deal with sudden emergencies, unexpected events, and new information that could disrupt your business.

The goals of a contingency plan are to:

  • Provide for the safety and security of yourself, your employees, and your customers in the event of a fire, flood, robbery, data breach, illness, or some other disaster
  • Ensure that your business can resume operations after an emergency as quickly as possible

Business Succession Planning

If your business is a family enterprise or you have specific plans for who you want to take over in the event of your retirement or illness, then you should have a plan in place to hand over control of the business . The issues of management, ownership, and taxes can cause a great deal of discord within families unless a succession plan is in place that clearly outlines the process.

Key Takeaways

  • Business planning is when key stakeholders review the state of their business and plan for how they will improve the business in the future.
  • Business planning isn't a one-off event—it should be an ongoing practice of self-assessment and planning.
  • Business planning isn't just about improving sales; it can also address safety during natural disasters or the transfer of power after an owner retires.

What is Long Range Planning? (Process Steps, Tools, and Implementation Tips)

What is Long Range Planning (LRP)?

Want to simply look ahead and decide what you want your business to achieve in the future?

Then Long-range planning is a strategic compass for organizations, which entails gazing into the horizon and charting a course towards defined objectives.

It involves setting goals and objectives that are both ambitious and achievable, as well as identifying potential risks and opportunities. For further insights, read on.

This blog post will discuss the basics of long-range planning, its benefits, tools, and how to start creating your business plan. The post will also provide some tips for implementing long-range plan.

Long Range Planning Definition

Long Range Planning (LRP) is the process of developing a comprehensive plan to guide an organization’s decision-making throughout its operating cycles.

It is concerned with setting goals and outlining strategies for achieving them over extended periods, typically 3-5 years or more.

It also involves creating a timeline and budget for implementing new business initiatives and strategies.

By setting long-term goals, businesses can establish a roadmap that helps them make informed decisions, stay ahead of the competition, and position themselves for business growth.

When it comes to long-range planning, it’s essential to understand what it is and isn’t. LRP is not the same as strategic planning, although the two are related.

Long range planning

  • LRP is a more long-term process.
  • LRP deals with things that may happen in the future.

Strategic planning

  • Strategic planning is more short-term.
  • Strategic planning is more about dealing with the present and immediate future.

LRP is essential for businesses because it helps them stay on track and prepares them for whatever may happen.

In addition, it allows companies to think about their long-term goals and determine how to achieve them.

  • Without LRP, businesses would be more likely to make short-sighted decisions that could hurt them in the long run.

Long-range planning has been a part of corporate life since the early days of the American industry. The world’s economy was stable in the 1950s and 1960s . As a result, many organizations used static planning at that time.

However, in the 1970s, the economy was unstable because of the USA’s improper maintenance of the gold standard. In this situation, static planning was not compatible with the instability of the economy. Hence many businesses started long-range planning.

Many crises, like the oil crisis in 1973 , the housing bubble, and the banking crisis in 2008 , impact businesses.

To handle all these problems, organizations implemented long-range planning strategies through some techniques like SWOT analysis.

Today, organizations use a variety of approaches and tools to create long-range plans that will help them succeed in an ever-evolving business landscape.

How to Create a Long-range Plan for Your Business?

Long Range Planning

You can take several steps to create a successful long-range plan for your business. The long-range planning process steps are as follows.

Mission and vision statements

A mission statement declares the organization’s purpose, while a vision statement defines the desired future state. Both should be clear, concise, and inspiring.

Mission statement

Crafting a mission statement is relatively easy. It can be as simple as stating what the organization does (e.g., “We provide high-quality healthcare services”) or what problem it aims to solve (e.g., “We reduce the incidence of cancer in our community”). The key is ensuring it is relevant to the organization and its stakeholders.

Vision statement

Creating a vision statement is a bit more involved. It should articulate where the organization wants to be and how it plans to get there. It should be aspirational yet achievable, inspiring employees and stakeholders alike.

Mission and vision statements should be reviewed and updated regularly to remain relevant. They provide the framework for long range planning and help keep everyone focused on their goals.

These plans should align with your mission statement and help you achieve your long-term goals. However, you’ll also need to identify potential obstacles that could prevent you from reaching your goals and develop strategies for dealing with them.

Implementing the plans

The final step in creating a long range plan is to implement it. That means enforcing the strategies you came up with and ensuring they are regularly updated.

Again, it’s essential to remember that LRP is a constantly evolving process, and you may need to make changes to your plans as time goes on.

However, by following these long range planning process steps, you can create a long-range plan to help your business achieve its goals.

Tips for Implementing Long Range Plan

Tips to Implement Long Range Planning

There are a few tips for implementing your long-range plan successfully:

  • First, ensure that the goals you come up with are achievable and realistic. Don’t try to do too much at once, or you’ll risk overwhelming yourself and not accomplishing anything.
  • Ensure that everyone who needs to know about the plan is aware of it and understands its role. That includes employees, management, and any other stakeholders.
  • Be prepared to make changes as needed. The long-range plan should be flexible enough to accommodate changes in the business environment or goals.
  • Stick to the schedule and make sure that everyone involved is held accountable. That means meeting deadlines and ensuring that everyone is doing their part.

Following these tips, you can successfully implement your long-range goal and see results.

The benefits of long-range planning are many. Some are listed below.

  • First and foremost, it allows businesses to stay on track and prepares them for whatever may happen.
  • It will enable companies to think about their long-term goals and determine how to achieve them.
  • LRP also helps businesses stay competitive.
  • By planning for the future, companies can anticipate changes in the market and adapt accordingly.
  • It gives them a leg up on their competitors, who may not be as prepared for changes in the industry.
  • Finally, LRP can help businesses increase profits. Companies can make smarter decisions about allocating resources by taking a long-term perspective. That can lead to increased efficiency and higher profits in the long run.

Tools Used for Doing Long-Range Strategic Planning

There are various tools that companies can use for long-range strategic management. The most important thing is to ensure that the tool is adequate for your business and meets your needs.

Below are some of the most common tools, including SWOT, business model, and risk assessment.

SWOT analysis

A SWOT analysis is a powerful tool that can help businesses identify opportunities and assess the risks involved in pursuing them. By considering your business’s strengths, weaknesses, opportunities, and threats, you can develop a plan of action to maximize your success chances. 

However, it is essential to remember that a SWOT analysis is only as effective as the information you put into it. Could you be sure to take the time to thoroughly research your business and the market before you begin your analysis? 

With a little effort, a SWOT analysis can be an invaluable tool in helping your business achieve its goals.

Business model analysis

The business model analysis is a powerful tool that can help you understand how your business works and generates revenue. 

It can help you boost your bottom line and achieve your desired results. In addition, business model analysis can help you troubleshoot problems and avoid pitfalls.

Finally, understanding your business model allows you to be better prepared to navigate the ever-changing business landscape.

Whether you’re just starting or have been in business for years, business model analysis can help you take your business to the next level.

Risk assessment

Risk assessment can help you identify potential risks to your business and the organization’s strategic plan to respond. This can help you avoid or minimize any negative impacts that these risks may have.

While planning, using past data as a reference will reduce the risk. At the same time, you are collecting data and setting industry benchmarks. You must use empirical research data from a leading international journal to publish original research papers.

Long-range Planning in Manufacturing

Manufacturing companies use long-range planning to schedule the production of their products. LRP allows them to forecast future demand and ensure they have the necessary resources to meet that demand .

It also helps them identify potential problems and take corrective action before becoming too serious.

There are several steps involved in long-term planning:

Steps Involved in Long-range Planning

Establish Goals and Objectives

Once you have established your long-term goals, it is time to set objectives. Objectives are specific, measurable, attainable, relevant, and time-bound. In other words, they are the steps you will take to achieve your long-term goals.

For example, if your goal is to increase sales by 20%, then one of your objectives might be to improve your marketing budget by 10%. Setting clear and achievable objectives can keep your company on track and ensure everyone is working towards the same goal.

Analyze the Current Situation

To accurately assess your current situation, you must consider your strengths and weaknesses and any external factors influencing your industry. Only with this information can you clearly understand where your business stands and what direction it needs to go.

Strengths and weaknesses are often internal factors, such as company culture or product quality.

However, they can also be external factors, like customer demand or the state of the economy.

So, when looking over your current situation, it’s essential to consider all of these factors to get a comprehensive picture.

Similarly, trends can come from inside or outside of your industry. For example, new regulations could change your business, or a competitor’s new product could disrupt the market.

Keeping up with these trends is essential to ensuring your business remains competitive.

By taking the time to analyze your current situation, you can gain valuable insights that will help you make better decisions for your business’s future.

Forecast Future Demand

Once you understand your current situation, you need to forecast future demand. For example, what products and services will be in the market in the coming years?

Once you complete these three steps, you can begin developing strategies and tactics to help you reach your long-term goals.

LRP in the Supply Chain

Businesses must plan for the future to be as effective and efficient as possible. Long-range planning, or LRP, is a process that allows companies to set long-term goals and develop strategies to achieve them. That helps businesses stay on track and make sure they reach their goals.

LRP is especially important in the supply chain context, where disruptions and unexpected events can ripple effects throughout the entire system.

Planning allows an organization’s current business to mitigate these risks and ensure its supply chain runs smoothly.

What is long-range planning in strategic management?

Long-range planning is a strategic management tool that allows managers to think about and plan for the future. It involves creating a plan that covers a period of more than one year and typically five to ten years.

Long-range planning aims to create a roadmap to help an organization achieve its goals and objectives over the long term. To do this, managers must assess the organization’s current situation, including its strengths and weaknesses and its opportunities and threats.

They will then need to create a strategy that outlines how the organization can capitalize on its strengths, address its shortcomings, take advantage of opportunities, and deal with threats.

What is general planning?

General planning is creating a plan that will allow an organization to achieve its goals. The plan is created by assessing the organization’s current situation and resources and then developing a strategy for using those resources most effectively.

Once the plan is finalized, it can be implemented and monitored to ensure it remains effective.

Why is Long-Range Planning Important?

Long-range planning is not just about making predictions; it’s an important tool for setting goals, managing resources, and preparing for the future, ultimately ensuring an organization’s success and sustainability. Here are a few points to understand why Long-range planning matters: 1. Future Direction: It provides a roadmap for where an organization wants to go in the long term. Without a plan, you’re like a ship without a destination. 2. Goal Achievement: It helps in setting clear and ambitious long-term goals. Having defined objectives gives purpose and direction to your efforts. 3. Resource Allocation: Long-range planning allows for effective allocation of resources. You can plan for investments, budgets, and staffing needs more efficiently. 4. Risk Mitigation: It helps identify potential risks and challenges well in advance, allowing organizations to prepare and adapt to changing circumstances. 5. Competitive Advantage: Organizations that engage in long-range planning are better equipped to respond to market changes, gain a competitive edge, and stay relevant.

What distinguishes short-term planning from long-term planning?

Short-term planning usually spans up to a year, while long-term planning encompasses periods of three to five years or more. Long-term planning serves as a vital tool to enable organizations to anticipate, strategize, and prepare for forthcoming trends and challenges.

What are some challenges associated with long-term planning?

Challenges inherent to long-term planning encompass: Uncertainty: The unpredictable nature of the future makes it challenging to anticipate and account for potential developments. Complexity: Long-term planning requires a comprehensive consideration of numerous factors, making it intricate. Inertia: Implementing significant transformations within an organization, particularly a large and complex one, can be a formidable challenge.

What are the examples of long-term planning in practice?

Here are instances where long-term planning has been implemented: New Product Development by a Company: Developing a new product or service necessitates a long-term plan, covering research and development, marketing, and sales. Infrastructure Project by a Government Agency: Government agencies formulate long-term plans for infrastructure projects, encompassing design, construction, and maintenance. Program Development by a Non-profit Organization: Non-profit organizations create long-term plans for new programs, addressing funding, staffing, and evaluation.

In order to effectively plan for the future, it is important to recognize that Long-Range Planning (LRP) goes beyond mere predictions. It encompasses the formulation of strategies and their implementation to ensure long-term success.

Without these essential components, a long-range strategic plan becomes nothing more than a speculative guess, relying solely on past events.

However, by incorporating both strategy development and implementation, businesses can significantly enhance their ability to achieve long-term goals.

With the information provided in this blog post, you now possess the essential knowledge and resources to create a highly effective long-range plan. This includes guidance on employing strategic thinking skills to ensure optimal results.

By implementing these strategies, you will be equipped to develop a robust long-term plan that aligns with your organizational objectives.

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Long-Term Business Planning

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What Is a Dehydrated Business Plan?

What are the main purposes of a business plan, why is strategic planning important to a business.

  • What Is a Short-Term Marketing Plan?
  • Goals, Priorities & Planning

If you're starting a business you probably plan to stay in business for a long time. In order to accomplish this goal, you probably have at least an inkling of what you want your business to accomplish. You take these goals and attempt to make them come to fruition. If your successful, your business will thrive. Once you've met your original goals, you make new ones. Some of these new goals might be ones you want to meet immediately, while others will take longer. Those are your business' long-term business goals, and they're important.

Why Make a Plan?

If you were going on vacation, you would determine where you're going; how you were getting there; how long you were staying; and what you would do, once there. In other words, you would plan your vacation. So, if traveling to Tahiti requires some set-up and parameters, wouldn't starting and running a business also require these? A business takes time, energy and resources; the wise thing would be to sit down and determine the most effective ways of how to use your time, energy and resources – so that your business has the best chance for success.

Short-term Plan vs. Long-term Planning

You started your business because you wanted to fill a niche, meet a need or provide a service that's desperately needed – with the ultimate objective – to make money. To fulfill all of your business objectives, you have to set goals for your business, and a plan of action to reach each goal.

Most businesses have a combination of short-term plans and long-term plans. A short-term plan could include launching three products during a calendar year, making X-amount in profits in a certain period of time, or gaining 5,000 new social media followers in a month. A long-term plan based on those short-term plans is to expand your business from one facility to two or more within three years.

Short-term plans are more immediate objections, while long-term plans are for a longer period of time: a year is generally the minimum. Thus, your long-term plans can include goals such as five-year income projections, expansion plans, hiring goals or other bigger goals that take more than a month or two to meet. The plans should be kept separate but reviewed on a regular basis so progress can be tracked and adjustments can be made if necessary.

Why You Need a Business Plan

Revisiting the vacation scenario from above, let's say you decide to drive to your vacation destination. You've never been there before so you punch your destination into your GPS tool and use it to navigate to your destination. Once you've arrived, you can also use that same tool to find interesting places to visit and places to eat.

Think of a business plan as a business' GPS. You can use the strategic business plan to guide your business from one objective to the next, find the best course of action for your business and recognize and correct issues as they arise. This is where you'll include the short and long term plans you have for the business, as well as other pertinent information such as key personnel, the business' mission statement, competitor information and market research and development ideas. Financial projects are also a vital part of a business plan.

Benefits of a Long Term Strategy

Having a long term plan for your business shows that you are in it for the long haul. Knowing where you want to be in three, five or even ten years can help you choose the short-term plans of an organization. Long-term business goals don't have to be large goals. The goal to never miss a client deadline could be a long-term goal. Most of a business' short-term plans lead toward long-term plans, so when making immediate business plans, keeping a longer-term objective in mind isn't a bad idea. A long term plan gives you something to aim for as well as a built-in measuring tool to review the progress of your short-term plans.

  • Small Biz Technology: 6 Short-Term Goals for Long-Term Success
  • Forbes: 11 Ways To Establish, And Then Reach, Your Long-Term Goals
  • Entrepreneur: 5 Ways to Think Long-Term in a Short-Term Market
  • The action plans for year one of each of the long-term projects become part of the annual plan for the upcoming year. In that plan, the steps are broken out in more detail and budgets are created for each one, to be included in the total company budget.
  • Although the long-term planning in a small business may not be as formal as that in a large corporation, the process is just as valuable in making sure the owner looks beyond the day-to-day problems he must deal with and thinks about where he wants to take his company in the future.
  • Review and revise the long-term plan each year as the business environment changes. Opportunities may emerge that are potentially more profitable than the ones you selected to pursue in the previous year’s long-term plan.

K.A. Francis has been a freelance and small business owner for 20 years. She has been writing about personal finance and budgeting since 2008. She taught Accounting, Management, Marketing and Business Law at WV Business College and Belmont College and holds a BA and an MAED in Education and Training.

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  • What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

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Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

[inline illustration] Strategic plan elements (infographic)

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 


What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 


What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

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Learn the Differences Between Long-term and Short-term Planning of Goals with Examples

Learn the major differences between long-term and short-term goals and how you can utilize them to improve your productivity

Short-term goals refer to specific, achievable objectives that individuals or organizations aim to accomplish in the near future. These goals typically have a relatively short timeline, often ranging from a few days to a year. 

They serve as building blocks in the larger framework of long-term planning and are instrumental in ensuring that incremental progress is made towards bigger objectives. Short-term goals are often seen as the stepping stones that propel individuals and companies toward their ultimate vision of success.

Definition of Long-Term Goals

Long-term goals are comprehensive and forward-looking objectives that individuals or organizations set for the distant future, usually spanning several years or even decades. These goals provide a sense of direction, purpose, and vision. They help individuals and entities navigate the complexities of life or business planning by outlining the ultimate destination they wish to reach. Long-term goals serve as the guiding stars that influence decision-making, strategies, and actions, ensuring that efforts align with the overarching mission and vision.

Examples of Short-Term Planning

Short-term goals can encompass a wide range of objectives, both personal and professional. Examples include completing a specific project by the end of the month, achieving a target sales figure for the quarter, or mastering a new skill within six weeks. These goals are characterized by their relatively short timeline and immediate impact on daily activities and tasks.

Examples of Long-Term Planning

Long-term goals are comprehensive and forward-looking. Examples may include becoming a senior executive in a company within ten years, paying off a mortgage over the course of twenty years, or attaining fluency in a foreign language within five years. These goals are characterized by their longer timeline and the substantial effort and dedication required to achieve them. They often involve significant life changes or achievements that may span several years or even a lifetime.

Advantages and Disadvantages of Short & Long-Term Goal Plans

Advantages of short-term goals.

Short-term goals offer several advantages. First, they provide a sense of accomplishment and motivation as you achieve them relatively quickly. These goals keep you focused and driven, helping you maintain a positive attitude. Short-term goals also serve as stepping stones to larger objectives, breaking down a complex, long-term plan into manageable tasks. They promote effective time management, as you have specific, actionable steps to follow within a shorter timeframe. Additionally, short-term goals allow for adaptability and course correction since they are more immediate and require ongoing evaluation.

Advantages of Long-term Goals

Long-term goals offer a sense of purpose and direction, especially in personal and professional life. They provide a roadmap for success over an extended period, giving you a sense of urgency and commitment to your vision. Long-term goals encourage careful planning and the development of a concrete action plan. They foster a positive attitude, as achieving significant milestones over time boosts confidence and self-esteem. Moreover, long-term goals help you stay focused on what truly matters, enabling you to prioritize important objectives amidst daily tasks and repetitive activities. They also promote strategic thinking, allowing you to align your actions with your broader aspirations, whether in your career, financial planning, or personal development.

Disadvantages of Short-Term Goals

Short-term goals have some disadvantages, such as potential limited impact and a focus on immediate gratification. Achieving short-term goals may not always contribute significantly to long-term success, leading to a lack of direction or a sense of stagnation. Additionally, frequent goal setting and achievement can become repetitive, diminishing the sense of accomplishment over time. There's also a risk of setting short-term goals that are too small or inconsequential, as they may not challenge or inspire personal or professional growth.

Disadvantages of Long-term Goals

While long-term goals are essential, they also come with drawbacks. Long-term goals can sometimes feel overwhelming, as they require sustained effort and patience, and progress may not be immediately visible. Setting overly ambitious long-term goals can lead to frustration and discouragement if they are not met within the desired timeframe. Long-term goals may also require periodic adjustments due to changing circumstances, which can be challenging to manage. Additionally, focusing solely on long-term goals may lead to neglecting short-term priorities and immediate needs, potentially affecting overall balance and well-being.

Difference between Short-Term And Long-Term Goal Setting Strategies

Short-term and long-term goal setting strategies differ mainly in terms of the timeframe and approach. Short-term goals are usually achievable within weeks, months, or a year and involve immediate action steps. Strategies for short-term goals often include setting specific and manageable targets, such as completing a project, improving certain skills, or achieving customer satisfaction. Triage tasks and effective time management are vital for short-term goals to ensure timely completion.

In contrast, long-term goals span several years or even decades and require a more strategic approach. Strategies for long-term goals focus on defining high-level objectives, such as industry leadership, leadership positions, or significant company revenue growth. Long-term goals benefit from a definite timeline and realistic timelines, as they involve substantial skill growth and industry influence. These goals are akin to a roadmap to success, requiring ongoing effort and adjustments along the way.

Strategies for Setting Short-term Goals for Business

Setting effective short-term goals involves several key strategies. Firstly, identify current skills and areas for improvement, aligning them with your career, educational or personal development objectives. Next, set specific, manageable targets that can be accomplished within a relatively short timeframe. Prioritize tasks and schedule them to ensure timely progress. Additionally, seek customer feedback and adjust your strategies to improve customer satisfaction.

Short-term goal setting can benefit from adopting a triage approach, focusing on the most critical tasks first. Utilize time management techniques and consider using a powerful project management tool or board management solution to streamline your efforts. Regularly review your progress and make necessary adjustments to stay on track. By following these strategies, you can effectively set and achieve your short-term goals, paving the way for long-term success.

Recap of the Advantages and Disadvantages of Short-term and Long-term Goal Planning:

Short-term goals offer several advantages, especially in the context of personal and professional development. These goals provide a clear sense of direction and purpose in daily life, helping individuals stay focused and motivated. They create a sense of accomplishment as they are achieved, boosting confidence and instilling a positive attitude. Short-term goals are often more manageable and actionable, allowing individuals to break down larger, long-term objectives into smaller, achievable steps. Moreover, they help individuals maintain a sense of urgency and momentum in their actions, as they are constantly working towards concrete targets. Short-term goals can be particularly effective in job interviews, as they showcase a candidate's sense of direction and ability to set and achieve realistic objectives. For businesses, short-term goals are essential for managing daily operations, customer satisfaction, and achieving short-term financial targets.

While short-term goals offer many advantages, they also have limitations. One potential disadvantage is the risk of focusing too much on immediate, short-term gains at the expense of larger, long-term objectives. 

This narrow focus can lead to missed opportunities for long-term growth and success. Additionally, setting too many short-term goals can result in a scattered approach to goal setting, where individuals or organizations may become overwhelmed by the sheer volume of objectives to be achieved in a limited period. 

This can result in stress and a lack of strategic direction. Short-term goals, if not carefully planned and aligned with long-term objectives, may also lead to a lack of cohesion in daily tasks, as individuals may become preoccupied with short-term targets rather than considering their broader impact. 

Therefore, while short-term goals are essential for productivity and progress, they should be balanced with a clear understanding of longer-term aspirations and a concrete plan to achieve them.

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Table of Contents

What is a business plan, the advantages of having a business plan, the types of business plans, the key elements of a business plan, best business plan software, common challenges of writing a business plan, become an expert business planner, business planning: it’s importance, types and key elements.

Business Planning: It’s Importance, Types and Key Elements

Every year, thousands of new businesses see the light of the day. One look at the  World Bank's Entrepreneurship Survey and database  shows the mind-boggling rate of new business registrations. However, sadly, only a tiny percentage of them have a chance of survival.   

According to the Bureau of Labor Statistics, about 20% of small businesses fail in their first year, about 50% in their fifth year.

Research from the University of Tennessee found that 44% of businesses fail within the first three years. Among those that operate within specific sectors, like information (which includes most tech firms), 63% shut shop within three years.

Several  other statistics  expose the abysmal rates of business failure. But why are so many businesses bound to fail? Most studies mention "lack of business planning" as one of the reasons.

This isn’t surprising at all. 

Running a business without a plan is like riding a motorcycle up a craggy cliff blindfolded. Yet, way too many firms ( a whopping 67%)  don't have a formal business plan in place. 

It doesn't matter if you're a startup with a great idea or a business with an excellent product. You can only go so far without a roadmap — a business plan. Only, a business plan is so much more than just a roadmap. A solid plan allows a business to weather market challenges and pivot quickly in the face of crisis, like the one global businesses are struggling with right now, in the post-pandemic world.  

But before you can go ahead and develop a great business plan, you need to know the basics. In this article, we'll discuss the fundamentals of business planning to help you plan effectively for 2021.  

Now before we begin with the details of business planning, let us understand what it is.

No two businesses have an identical business plan, even if they operate within the same industry. So one business plan can look entirely different from another one. Still, for the sake of simplicity, a business plan can be defined as a guide for a company to operate and achieve its goals.  

More specifically, it's a document in writing that outlines the goals, objectives, and purpose of a business while laying out the blueprint for its day-to-day operations and key functions such as marketing, finance, and expansion.

A good business plan can be a game-changer for startups that are looking to raise funds to grow and scale. It convinces prospective investors that the venture will be profitable and provides a realistic outlook on how much profit is on the cards and by when it will be attained. 

However, it's not only new businesses that greatly benefit from a business plan. Well-established companies and large conglomerates also need to tweak their business plans to adapt to new business environments and unpredictable market changes. 

Before getting into learning more about business planning, let us learn the advantages of having one.

Since a detailed business plan offers a birds-eye view of the entire framework of an establishment, it has several benefits that make it an important part of any organization. Here are few ways a business plan can offer significant competitive edge.

  • Sets objectives and benchmarks: Proper planning helps a business set realistic objectives and assign stipulated time for those goals to be met. This results in long-term profitability. It also lets a company set benchmarks and Key Performance Indicators (KPIs) necessary to reach its goals. 
  • Maximizes resource allocation: A good business plan helps to effectively organize and allocate the company’s resources. It provides an understanding of the result of actions, such as, opening new offices, recruiting fresh staff, change in production, and so on. It also helps the business estimate the financial impact of such actions.
  • Enhances viability: A plan greatly contributes towards turning concepts into reality. Though business plans vary from company to company, the blueprints of successful companies often serve as an excellent guide for nascent-stage start-ups and new entrepreneurs. It also helps existing firms to market, advertise, and promote new products and services into the market.
  • Aids in decision making: Running a business involves a lot of decision making: where to pitch, where to locate, what to sell, what to charge — the list goes on. A well thought-out business plan provides an organization the ability to anticipate the curveballs that the future could throw at them. It allows them to come up with answers and solutions to these issues well in advance.
  • Fix past mistakes: When businesses create plans keeping in mind the flaws and failures of the past and what worked for them and what didn’t, it can help them save time, money, and resources. Such plans that reflects the lessons learnt from the past offers businesses an opportunity to avoid future pitfalls.
  • Attracts investors: A business plan gives investors an in-depth idea about the objectives, structure, and validity of a firm. It helps to secure their confidence and encourages them to invest. 

Now let's look at the various types involved in business planning.

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Business plans are formulated according to the needs of a business. It can be a simple one-page document or an elaborate 40-page affair, or anything in between. While there’s no rule set in stone as to what exactly a business plan can or can’t contain, there are a few common types of business plan that nearly all businesses in existence use.  

Here’s an overview of a few fundamental types of business plans. 

  • Start-up plan: As the name suggests, this is a documentation of the plans, structure, and objections of a new business establishments. It describes the products and services that are to be produced by the firm, the staff management, and market analysis of their production. Often, a detailed finance spreadsheet is also attached to this document for investors to determine the viability of the new business set-up.
  • Feasibility plan: A feasibility plan evaluates the prospective customers of the products or services that are to be produced by a company. It also estimates the possibility of a profit or a loss of a venture. It helps to forecast how well a product will sell at the market, the duration it will require to yield results, and the profit margin that it will secure on investments. 
  • Expansion Plan: This kind of plan is primarily framed when a company decided to expand in terms of production or structure. It lays down the fundamental steps and guidelines with regards to internal or external growth. It helps the firm to analyze the activities like resource allocation for increased production, financial investments, employment of extra staff, and much more.
  • Operations Plan: An operational plan is also called an annual plan. This details the day-to-day activities and strategies that a business needs to follow in order to materialize its targets. It outlines the roles and responsibilities of the managing body, the various departments, and the company’s employees for the holistic success of the firm.
  • Strategic Plan: This document caters to the internal strategies of the company and is a part of the foundational grounds of the establishments. It can be accurately drafted with the help of a SWOT analysis through which the strengths, weaknesses, opportunities, and threats can be categorized and evaluated so that to develop means for optimizing profits.

There is some preliminary work that’s required before you actually sit down to write a plan for your business. Knowing what goes into a business plan is one of them. 

Here are the key elements of a good business plan:

  • Executive Summary: An executive summary gives a clear picture of the strategies and goals of your business right at the outset. Though its value is often understated, it can be extremely helpful in creating the readers’ first impression of your business. As such, it could define the opinions of customers and investors from the get-go.  
  • Business Description: A thorough business description removes room for any ambiguity from your processes. An excellent business description will explain the size and structure of the firm as well as its position in the market. It also describes the kind of products and services that the company offers. It even states as to whether the company is old and established or new and aspiring. Most importantly, it highlights the USP of the products or services as compared to your competitors in the market.
  • Market Analysis: A systematic market analysis helps to determine the current position of a business and analyzes its scope for future expansions. This can help in evaluating investments, promotions, marketing, and distribution of products. In-depth market understanding also helps a business combat competition and make plans for long-term success.
  • Operations and Management: Much like a statement of purpose, this allows an enterprise to explain its uniqueness to its readers and customers. It showcases the ways in which the firm can deliver greater and superior products at cheaper rates and in relatively less time. 
  • Financial Plan: This is the most important element of a business plan and is primarily addressed to investors and sponsors. It requires a firm to reveal its financial policies and market analysis. At times, a 5-year financial report is also required to be included to show past performances and profits. The financial plan draws out the current business strategies, future projections, and the total estimated worth of the firm.

The importance of business planning is it simplifies the planning of your company's finances to present this information to a bank or investors. Here are the best business plan software providers available right now:

  • Business Sorter

The importance of business planning cannot be emphasized enough, but it can be challenging to write a business plan. Here are a few issues to consider before you start your business planning:

  • Create a business plan to determine your company's direction, obtain financing, and attract investors.
  • Identifying financial, demographic, and achievable goals is a common challenge when writing a business plan.
  • Some entrepreneurs struggle to write a business plan that is concise, interesting, and informative enough to demonstrate the viability of their business idea.
  • You can streamline your business planning process by conducting research, speaking with experts and peers, and working with a business consultant.

Whether you’re running your own business or in-charge of ensuring strategic performance and growth for your employer or clients, knowing the ins and outs of business planning can set you up for success. 

Be it the launch of a new and exciting product or an expansion of operations, business planning is the necessity of all large and small companies. Which is why the need for professionals with superior business planning skills will never die out. In fact, their demand is on the rise with global firms putting emphasis on business analysis and planning to cope with cut-throat competition and market uncertainties.

While some are natural-born planners, most people have to work to develop this important skill. Plus, business planning requires you to understand the fundamentals of business management and be familiar with business analysis techniques . It also requires you to have a working knowledge of data visualization, project management, and monitoring tools commonly used by businesses today.   

Simpliearn’s Executive Certificate Program in General Management will help you develop and hone the required skills to become an extraordinary business planner. This comprehensive general management program by IIM Indore can serve as a career catalyst, equipping professionals with a competitive edge in the ever-evolving business environment.

What Is Meant by Business Planning?

Business planning is developing a company's mission or goals and defining the strategies you will use to achieve those goals or tasks. The process can be extensive, encompassing all aspects of the operation, or it can be concrete, focusing on specific functions within the overall corporate structure.

What Are the 4 Types of Business Plans?

The following are the four types of business plans:

Operational Planning

This type of planning typically describes the company's day-to-day operations. Single-use plans are developed for events and activities that occur only once (such as a single marketing campaign). Ongoing plans include problem-solving policies, rules for specific regulations, and procedures for a step-by-step process for achieving particular goals.

Strategic Planning

Strategic plans are all about why things must occur. A high-level overview of the entire business is included in strategic planning. It is the organization's foundation and will dictate long-term decisions.

Tactical Planning

Tactical plans are about what will happen. Strategic planning is aided by tactical planning. It outlines the tactics the organization intends to employ to achieve the goals outlined in the strategic plan.

Contingency Planning

When something unexpected occurs or something needs to be changed, contingency plans are created. In situations where a change is required, contingency planning can be beneficial.

What Are the 7 Steps of a Business Plan?

The following are the seven steps required for a business plan:

Conduct Research

If your company is to run a viable business plan and attract investors, your information must be of the highest quality.

Have a Goal

The goal must be unambiguous. You will waste your time if you don't know why you're writing a business plan. Knowing also implies having a target audience for when the plan is expected to get completed.

Create a Company Profile

Some refer to it as a company profile, while others refer to it as a snapshot. It's designed to be mentally quick and digestible because it needs to stick in the reader's mind quickly since more information is provided later in the plan.

Describe the Company in Detail

Explain the company's current situation, both good and bad. Details should also include patents, licenses, copyrights, and unique strengths that no one else has.

Create a marketing plan ahead of time.

A strategic marketing plan is required because it outlines how your product or service will be communicated, delivered, and sold to customers.

Be Willing to Change Your Plan for the Sake of Your Audience

Another standard error is that people only write one business plan. Startups have several versions, just as candidates have numerous resumes for various potential employers.

Incorporate Your Motivation

Your motivation must be a compelling reason for people to believe your company will succeed in all circumstances. A mission should drive a business, not just selling, to make money. That mission is defined by your motivation as specified in your business plan.

What Are the Basic Steps in Business Planning?

These are the basic steps in business planning:

Summary and Objectives

Briefly describe your company, its objectives, and your plan to keep it running.

Services and Products

Add specifics to your detailed description of the product or service you intend to offer. Where, why, and how much you plan to sell your product or service and any special offers.

Conduct research on your industry and the ideal customers to whom you want to sell. Identify the issues you want to solve for your customers.

Operations are the process of running your business, including the people, skills, and experience required to make it successful.

How are you going to reach your target audience? How you intend to sell to them may include positioning, pricing, promotion, and distribution.

Consider funding costs, operating expenses, and projected income. Include your financial objectives and a breakdown of what it takes to make your company profitable. With proper business planning through the help of support, system, and mentorship, it is easy to start a business.

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Concept of Long term planning

In the long term, companies want to solve problems permanently and to reach their overall targets. Long-term planning reacts to the competitive situation of the company in its social, economic and political environment and develops strategies for adapting and influencing its position to achieve long-term goals. It examines major capital expenditures such as purchasing equipment and facilities, and implements policies and procedures that shape the company’s profile to match top management’s ideas.

When short-term and medium-term planning is successful, long-term planning builds on those achievements to preserve accomplishments and ensure continued progress.

Strategic management 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.


Using strategic management processes, you establish the mission, vision and strategy for the business. 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 stakeholder requirements, 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, your purchasing department can use the data about future demands to estimate orders. This helps them negotiate contracts with suppliers and schedule deliveries.


The Association for Strategic Planning certifies strategic management professionals and publishes standards, 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.

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.

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.

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Understanding Long Term Assets: Definition, Examples, and Benefits

In any business, the buzz is all about what’s owned and what’s owed. But there’s a part of that puzzle that often leaves many scratching their heads – long term assets . Whether you’re a fresh face in finance or a seasoned executive, navigating the waters of asset management can feel like plotting a course through unknown territory.

Knowing your company’s resources and how they contribute to success is key for making informed decisions.

Here’s an insight: Long term assets are not just pieces on a financial game board—they are the powerful engines driving growth over time. These include hefty items like machinery or even ideas stamped with legal approval , such as patents.

They stick around for more than one quick trip around the sun; they’re part of the team year after year.

Our guide opens up this world in easy bites, explaining what these assets are and why they matter so much. You’ll discover how they offer stability and ripen into wiser investments over time —even while losing some shine through depreciation .

We’ve lined up examples to help everything click into place.

Get ready to become savvy about sustaining your business’s future .. Let’s dive in!

Key Takeaways

  • Long – term assets are things like buildings, equipment, and patents that a company uses to make money over many years.
  • These assets can give a company stability during tough times and can be used for getting loans or investments .
  • Keeping long – term assets in good shape means they will last longer and save the business money in the future.
  • They lose value slowly through processes called depreciation or amortization , which affects how much tax a company pays.
  • Having different kinds of long – term assets helps a business grow and become stronger over time.

Table of Contents

Definition of Long-Term Assets

Long-term assets are key pieces of a company’s future. They include anything that helps a business for longer than one year, like buildings, machines, or patents . These items appear on the balance sheet as capitalized costs .

Over time, they may lose value through depreciation or amortization .

Companies rely on these assets to make money for many years ahead. Managing them well is critical for success and growth. Good long-term asset management can mean a stronger financial position and better chances for getting loans when needed.

Types of Long-Term Assets

Long-term assets are pivotal components on a company’s balance sheet, representing the investments made for sustained business growth and operational efficiency. These durable resources, classified generally as tangible or intangible, form the backbone of an organization’s potential to generate future returns.

Tangible Assets

Tangible assets are the physical items a company uses over time. These include things like buildings, machines, and furniture. Think of anything you can touch that helps make or sell products.

Companies list these on their balance sheets as “property, plant, and equipment” (PP&E). They’re also called fixed assets or capital assets .

You’ll often see big machinery in factories as tangible assets . Desks and chairs are examples too. This stuff is important because it helps companies do their work every day. A business might use a delivery truck to get its products to customers.

That truck is an asset that keeps earning money for the company.

Tangible assets have another cool job: they support getting loans and bringing in investors. If a company needs cash, it can borrow against its factory or equipment value — just like how someone might mortgage their house! Proper care of these items keeps them valuable longer so they can continue making money for the business.

Intangible Assets

Shifting focus from physical items, intangible assets are crucial for a firm’s success and carry no physical presence. These include patents that protect inventions or copyrights safeguarding artistic works.

Trademarks set businesses apart in the market, while goodwill represents a company’s solid reputation. Strong brand equity builds customer trust, and trade secrets give companies unique advantages over competitors.

Firms can also hold franchise agreements allowing them to operate under well-known brands as well as licensing agreements granting rights to use certain technologies or systems. Managing these assets well is key; it ensures strong market positioning and fosters lasting customer relationships.

Innovation assets like business strategies fuel continuous growth and keep a company ahead of the curve.

Examples of Long-Term Assets

Delving into the realm of long-term assets, we encounter varied examples that embody both tangible and intangible forms. These assets are critical cornerstones within a company’s financial structure, often serving as the foundation upon which businesses erect their operational strategies and future growth projections.

Property stands as a cornerstone among long-term assets. Real estate, such as land and buildings, often climbs in value over time. This makes it a strong player in asset appreciation .

Firms rely on property for more than just space; they use it to generate stable rental income through lease agreements. Owning commercial properties allows companies not only to plan for the future but also to establish a dependable revenue stream.

Effective property management ensures these assets contribute significantly to a company’s prosperity. A well-located investment property can become more valuable years down the road.

Land ownership offers additional benefits, like autonomy over usage and potential development opportunities.

Companies must handle their real estate investments with care and strategy. Asset depreciation is factored into financial planning , turning properties into tax-saving tools while maintaining their intrinsic value growth potential.

Owners of longterm investments in property can thus achieve both immediate fiscal advantages and future financial gains.

Equipment falls under the category of fixed assets in accounting . This includes machinery and equipment vital for a company’s operations. Think about production machines in a factory or computers in an office.

These items are not only essential for daily tasks but also represent significant long-term investments .

Managing these assets wisely is key to getting the most out of them. Regular equipment maintenance ensures that machines work well over time. This careful attention helps prevent costly breakdowns and extends the life of the equipment.

Good asset management involves understanding depreciation too. Depreciation spreads out the cost of equipment over its useful life, affecting financial statements and tax calculations.

Companies must track this to accurately report their value and performance.

Maximizing asset utilization is also crucial – it means using all machinery to its fullest potential without waste or downtime. Smart use of equipment can lead to better production efficiency and higher returns on investment for a business.

Fixed Assets

Moving from equipment to a more extensive category, we enter the world of fixed assets . These are the hefty items that stay with a company for years. Offices, factories, and heavy machinery stand tall on the balance sheet as fixed assets.

They’re bought as a long-term investment and slowly lose value through depreciation .

Good asset management makes sure these big purchases help the company for a long time. When businesses spend money wisely on these items, they set themselves up for success. Cost allocation is key—it spreads out expenses so financial statements stay accurate.

Keeping track of wear and tear is also important; it leads to smart decisions about repairs or replacements down the road.

Benefits of Long-Term Assets

Long-term assets can be a cornerstone for business growth, offering a mix of stability and potential for appreciation that underpins the financial health of an enterprise—discover how these assets play a pivotal role in strategic asset management.

Provides Stability

Long-term assets act as a financial anchor , offering firms and individuals a sense of security . They hold value over extended periods, which means that companies can count on them during uncertain economic times.

Think of these assets like a sturdy ship in a stormy sea—they won’t sink when challenges arise.

Owning such assets is crucial for any well-rounded investment strategy. It’s like building a house with strong foundation stones—it ensures the structure stays upright for years to come.

These assets support wealth accumulation , helping people reach their goals, whether it’s capital appreciation or retirement planning.

Assets that last many years also bring tax benefits to the table. This aspect helps businesses and investors manage their expenses better over time. As they depreciate, long-term assets can reduce taxable income, freeing up more resources for reinvestment or other uses.

The stability they provide goes beyond just the present; it extends into future financial planning and wealth management.

Long-term Financial Investment

While stable assets keep a company secure, investing in long-term financial investments can grow wealth over time. These investments are not for quick profits but for strategic wealth planning with an eye toward the future.

They often involve putting money into assets that won’t be cashed in for years or even decades .

Investing wisely requires knowing the market and choosing assets that will increase in value. This might include buying stocks, bonds, real estate, or other property that appreciates over time.

Wealth management experts suggest a diversified portfolio to spread risk and increase chances of consistent investment returns.

An extended holding period allows these assets to ride out market fluctuations . Over time, this strategy tends to lead to long-range returns —a crucial consideration for those looking at their financial horizon with care and diligence .

Asset Depreciation

Asset depreciation is a key concept for anyone in accounting. It tracks how much a company’s long-term assets lose value over time. Think of it like the wear and tear on your car. As you use it, its price goes down because it gets older and less useful.

Companies record this loss in value every year, which affects their financial statements .

There are different ways to calculate depreciation, such as straight-line or declining balance method s. The straight-line method spreads out the asset’s cost evenly across its useful life.

But with declining balance, more costs get written off in the first few years when the asset is newer. This matters because it changes how a business reports income and pays taxes.

Properly maintaining assets helps slow down depreciation. Keeping machines clean and in good working order means they’ll last longer without losing too much value quickly. Managing these assets well ensures that companies don’t face big losses unexpectedly due to equipment suddenly breaking down or becoming outdated.

Long-term assets help companies make money for many years . They are key to a firm’s growth and success . Think about how these big purchases can work for your business. Remember, they lose value slowly through depreciation .

With smart management , these investments can lead to big wins over time .

1. What are long-term assets?

Long-term assets are things a company owns that it expects to use for more than one year, like buildings and machinery.

2. Can you give me an example of a long-term asset?

A piece of factory equipment is an example of a long-term asset because the company will use it for many years.

3. Why are long-term assets important for a business?

Long-term assets are important because they help businesses make products, provide services, and earn money over time.

4. Do long-term assets ever lose value?

Yes, most long-term assets gradually lose value as they get older; this process is called depreciation.

5. How do benefits from long term-assets show up in business?

Benefits from long-term assets can show up as increased production capacity or improved efficiency in operations.


Understanding Long Term Assets: Definition, Examples, and Benefits | MyExcelOnline

John Michaloudis is a former accountant and finance analyst at General Electric, a Microsoft MVP since 2020, an Amazon #1 bestselling author of 4 Microsoft Excel books and teacher of Microsoft Excel & Office over at his flagship Academy Online Course .

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Fact Sheet 42 CFR Part 2 Final Rule 

Date: February 8, 2024

On February 8, 2024, the U.S. Department of Health & Human Services (HHS) through the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Office for Civil Rights announced a final rule modifying the Confidentiality of Substance Use Disorder (SUD) Patient Records regulations at 42 CFR part 2 (“Part 2”). With this final rule, HHS is implementing the confidentiality provisions of section 3221 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (enacted March 27, 2020), which require the Department to align certain aspects of Part 2 with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Rules and the Health Information Technology for Economic and Clinical Health Act (HITECH).

The Part 2 statute (42 U.S.C. 290dd-2) protects “[r]ecords of the identity, diagnosis, prognosis, or treatment of any patient which are maintained in connection with the performance of any program or activity relating to substance use disorder education, prevention, training, treatment, rehabilitation, or research, which is conducted, regulated, or directly or indirectly assisted by any department or agency of the United States.” Confidentiality protections help address concerns that discrimination and fear of prosecution deter people from entering treatment for SUD.

The modifications in this final rule reflect the proposals published in the December 2, 2022, Notice of Proposed Rulemaking (NPRM) and public comments received from: substance use disorder and other advocacy groups; trade and professional associations; behavioral and other health providers; health information technology vendors and health information exchanges; state, local, tribal and territorial governments; health plans; academic institutions, including academic health centers; and unaffiliated or anonymous individuals. Following a 60-day comment period, HHS analyzed and carefully considered all comments submitted from the public on the NPRM and made appropriate modifications before finalizing.

Major Changes in the New Part 2 Rule

The final rule includes the following modifications to Part 2 that were proposed in the NPRM:

  • Allows a single consent for all future uses and disclosures for treatment, payment, and health care operations.
  • Allows HIPAA covered entities and business associates that receive records under this consent to redisclose the records in accordance with the HIPAA regulations. 1
  • Permits disclosure of records without patient consent to public health authorities, provided that the records disclosed are de-identified according to the standards established in the HIPAA Privacy Rule.
  • Restricts the use of records and testimony in civil, criminal, administrative, and legislative proceedings against patients, absent patient consent or a court order.
  • Penalties : Aligns Part 2 penalties with HIPAA by replacing criminal penalties currently in Part 2 with civil and criminal enforcement authorities that also apply to HIPAA violations. 2
  • Breach Notification : Applies the same requirements of the HIPAA Breach Notification Rule 3 to breaches of records under Part 2.
  • Patient Notice : Aligns Part 2 Patient Notice requirements with the requirements of the HIPAA Notice of Privacy Practices.
  • Safe Harbor : Creates a limit on civil or criminal liability for investigative agencies that act with reasonable diligence to determine whether a provider is subject to Part 2 before making a demand for records in the course of an investigation. The safe harbor requires investigative agencies to take certain steps in the event they discover they received Part 2 records without having first obtained the requisite court order.

Substantive Changes Made Since the NPRM

In addition to finalizing modifications to Part 2 that were proposed in the NPRM, the Final Rule includes further modifications informed by public comments, notably the following:

  • Safe Harbor: Clarifies and strengthens the reasonable diligence steps that investigative agencies must follow to be eligible for the safe harbor: before requesting records, an investigative agency must look for a provider in SAMHSA’s online treatment facility locator and check a provider’s Patient Notice or HIPAA Notice of Privacy Practices to determine whether the provider is subject to Part 2.
  • Segregation of Part 2 Data : Adds an express statement that segregating or segmenting Part 2 records is not required.
  • Complaints : Adds a right to file a complaint directly with the Secretary for an alleged violation of Part 2. Patients may also concurrently file a complaint with the Part 2 program.
  • SUD Counseling Notes : Creates a new definition for an SUD clinician’s notes analyzing the conversation in an SUD counseling session that the clinician voluntarily maintains separately from the rest of the patient’s SUD treatment and medical record and that require specific consent from an individual and cannot be used or disclosed based on a broad TPO consent. This is analogous to protections in HIPAA for psychotherapy notes. 4
  • Prohibits combining patient consent for the use and disclosure of records for civil, criminal, administrative, or legislative proceedings with patient consent for any other use or disclosure.
  • Requires a separate patient consent for the use and disclosure of SUD counseling notes.
  • Requires that each disclosure made with patient consent include a copy of the consent or a clear explanation of the scope of the consent.
  • Fundraising : Create a new right for patients to opt out of receiving fundraising communications.

What has not changed in Part 2?

As has always been the case under Part 2, patients’ SUD treatment records cannot be used to investigate or prosecute the patient without written patient consent or a court order.

Records obtained in an audit or evaluation of a Part 2 program cannot be used to investigate or prosecute patients, absent written consent of the patients or a court order that meets Part 2 requirements.

What comes next?

The final rule may be downloaded at . HHS will support implementation and enforcement of this new rule, including through resources related to behavioral health developed by the SAMHSA-sponsored Center of Excellence for Protected Health Information . Persons subject to this regulation must comply with the applicable requirements of this final rule two years after the date of its publication in the Federal Register . The Department will conduct outreach and develop guidance on how to comply with the new requirements, such as filing breach reports when required.

OCR plans to finalize changes to the HIPAA Notice of Privacy Practices (NPP) to address uses and disclosures of protected health information that is also protected by Part 2 along with other changes to the NPP requirements, in an upcoming final rule modifying the HIPAA Privacy Rule.

HHS planning to implement in separate rulemaking the CARES Act antidiscrimination provisions that prohibit the use of patients’ Part 2 records against them.

1   However, these records cannot be used in legal proceedings against the patient without specific consent or a court order, which is more stringent than the HIPAA standard.

2    See 42 U.S.C. 1320d–5 and 1320d-6.

3   Section 13400 of the HITECH Act (codified at 42 U.S.C. 17921) defined the term “Breach”. Section 13402 of the HITECH Act (codified at 42 U.S.C. 17932) enacted breach notification requirements, discussed in detail below.

4    See .

long term planning in business definition

Create a form in Word that users can complete or print

In Word, you can create a form that others can fill out and save or print.  To do this, you will start with baseline content in a document, potentially via a form template.  Then you can add content controls for elements such as check boxes, text boxes, date pickers, and drop-down lists. Optionally, these content controls can be linked to database information.  Following are the recommended action steps in sequence.  

Show the Developer tab

In Word, be sure you have the Developer tab displayed in the ribbon.  (See how here:  Show the developer tab .)

Open a template or a blank document on which to base the form

You can start with a template or just start from scratch with a blank document.

Start with a form template

Go to File > New .

In the  Search for online templates  field, type  Forms or the kind of form you want. Then press Enter .

In the displayed results, right-click any item, then select  Create. 

Start with a blank document 

Select Blank document .

Add content to the form

Go to the  Developer  tab Controls section where you can choose controls to add to your document or form. Hover over any icon therein to see what control type it represents. The various control types are described below. You can set properties on a control once it has been inserted.

To delete a content control, right-click it, then select Remove content control  in the pop-up menu. 

Note:  You can print a form that was created via content controls. However, the boxes around the content controls will not print.

Insert a text control

The rich text content control enables users to format text (e.g., bold, italic) and type multiple paragraphs. To limit these capabilities, use the plain text content control . 

Click or tap where you want to insert the control.

Rich text control button

To learn about setting specific properties on these controls, see Set or change properties for content controls .

Insert a picture control

A picture control is most often used for templates, but you can also add a picture control to a form.

Picture control button

Insert a building block control

Use a building block control  when you want users to choose a specific block of text. These are helpful when you need to add different boilerplate text depending on the document's specific purpose. You can create rich text content controls for each version of the boilerplate text, and then use a building block control as the container for the rich text content controls.

building block gallery control

Select Developer and content controls for the building block.

Developer tab showing content controls

Insert a combo box or a drop-down list

In a combo box, users can select from a list of choices that you provide or they can type in their own information. In a drop-down list, users can only select from the list of choices.

combo box button

Select the content control, and then select Properties .

To create a list of choices, select Add under Drop-Down List Properties .

Type a choice in Display Name , such as Yes , No , or Maybe .

Repeat this step until all of the choices are in the drop-down list.

Fill in any other properties that you want.

Note:  If you select the Contents cannot be edited check box, users won’t be able to click a choice.

Insert a date picker

Click or tap where you want to insert the date picker control.

Date picker button

Insert a check box

Click or tap where you want to insert the check box control.

Check box button

Use the legacy form controls

Legacy form controls are for compatibility with older versions of Word and consist of legacy form and Active X controls.

Click or tap where you want to insert a legacy control.

Legacy control button

Select the Legacy Form control or Active X Control that you want to include.

Set or change properties for content controls

Each content control has properties that you can set or change. For example, the Date Picker control offers options for the format you want to use to display the date.

Select the content control that you want to change.

Go to Developer > Properties .

Controls Properties  button

Change the properties that you want.

Add protection to a form

If you want to limit how much others can edit or format a form, use the Restrict Editing command:

Open the form that you want to lock or protect.

Select Developer > Restrict Editing .

Restrict editing button

After selecting restrictions, select Yes, Start Enforcing Protection .

Restrict editing panel

Advanced Tip:

If you want to protect only parts of the document, separate the document into sections and only protect the sections you want.

To do this, choose Select Sections in the Restrict Editing panel. For more info on sections, see Insert a section break .

Sections selector on Resrict sections panel

If the developer tab isn't displayed in the ribbon, see Show the Developer tab .

Open a template or use a blank document

To create a form in Word that others can fill out, start with a template or document and add content controls. Content controls include things like check boxes, text boxes, and drop-down lists. If you’re familiar with databases, these content controls can even be linked to data.

Go to File > New from Template .

New from template option

In Search, type form .

Double-click the template you want to use.

Select File > Save As , and pick a location to save the form.

In Save As , type a file name and then select Save .

Start with a blank document

Go to File > New Document .

New document option

Go to File > Save As .

Go to Developer , and then choose the controls that you want to add to the document or form. To remove a content control, select the control and press Delete. You can set Options on controls once inserted. From Options, you can add entry and exit macros to run when users interact with the controls, as well as list items for combo boxes, .

Adding content controls to your form

In the document, click or tap where you want to add a content control.

On Developer , select Text Box , Check Box , or Combo Box .

Developer tab with content controls

To set specific properties for the control, select Options , and set .

Repeat steps 1 through 3 for each control that you want to add.

Set options

Options let you set common settings, as well as control specific settings. Select a control and then select Options to set up or make changes.

Set common properties.

Select Macro to Run on lets you choose a recorded or custom macro to run on Entry or Exit from the field.

Bookmark Set a unique name or bookmark for each control.

Calculate on exit This forces Word to run or refresh any calculations, such as total price when the user exits the field.

Add Help Text Give hints or instructions for each field.

OK Saves settings and exits the panel.

Cancel Forgets changes and exits the panel.

Set specific properties for a Text box

Type Select form Regular text, Number, Date, Current Date, Current Time, or Calculation.

Default text sets optional instructional text that's displayed in the text box before the user types in the field. Set Text box enabled to allow the user to enter text into the field.

Maximum length sets the length of text that a user can enter. The default is Unlimited .

Text format can set whether text automatically formats to Uppercase , Lowercase , First capital, or Title case .

Text box enabled Lets the user enter text into a field. If there is default text, user text replaces it.

Set specific properties for a Check box .

Default Value Choose between Not checked or checked as default.

Checkbox size Set a size Exactly or Auto to change size as needed.

Check box enabled Lets the user check or clear the text box.

Set specific properties for a Combo box

Drop-down item Type in strings for the list box items. Press + or Enter to add an item to the list.

Items in drop-down list Shows your current list. Select an item and use the up or down arrows to change the order, Press - to remove a selected item.

Drop-down enabled Lets the user open the combo box and make selections.

Protect the form

Go to Developer > Protect Form .

Protect form button on the Developer tab

Note:  To unprotect the form and continue editing, select Protect Form again.

Save and close the form.

Test the form (optional)

If you want, you can test the form before you distribute it.

Protect the form.

Reopen the form, fill it out as the user would, and then save a copy.

Creating fillable forms isn’t available in Word for the web.

You can create the form with the desktop version of Word with the instructions in Create a fillable form .

When you save the document and reopen it in Word for the web, you’ll see the changes you made.


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  • Plug Power-stock
  • News for Plug Power Plug Power

Plug Power Stock Jumps on Plans to Save $75 Million Annually

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Plug Power (NASDAQ: PLUG ) stock opened in the green today after the company announced a plan that would reduce its annual operational expenses by $75 million. Plug expects to incur a one-time $15 million implementation cost to initiate the plan.

The plan includes four pillars: operational consolidation, strategic workforce adjustments, additional cost-saving measures and a commitment to shareholders.

“The implementation of this strategic plan is essential for Plug to sustain its market leadership and continue to provide innovative renewable energy solutions,” said CEO Andy Marsh. “We are confident that this strategic realignment will strengthen our competitive position and contribute to our long-term success.”

PLUG Stock: Plug Announces Plan to Reduce Annual Expenses by $75 Million

Plug Power seeks to consolidate its operations in order to improve its allocation of resources and streamline processes. The green hydrogen company believes that operational consolidation will lead to “economies of scale” and increased efficiency.

Strategic workforce adjustments is a euphemism for layoffs. Plug added that it would support affected employees to the fullest extent.

For cost-saving measures, the company plans on improving its supply chain, reducing discretionary spending and utilizing automation technologies to increase operational efficiency. Finally, Plug announced that these changes would be implemented in order to increase shareholder value.

Plug operates in a cost-intensive market in regards to infrastructure and transportation, so it isn’t surprising to hear that the company wants to cut costs. On top of that, the company has failed to turn a profit and last reported a GAAP EPS loss of 47 cents and a net loss of $283.47 million.

This plan comes as Plug works to increase production at its plants in Georgia and Tennessee. Production at the Georgia plant , which is the largest liquid green hydrogen plant in the U.S., began last month. The plant took 18 months to complete and is designed to produce 15 tons of liquid electrolytic hydrogen per day.

Meanwhile, production at Plug’s Tennessee plant resumed last week following design improvements. Plug expects these two plants to reduce the average cost of delivered hydrogen, which would increase fuel margins.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the  Publishing Guidelines .  

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

More From InvestorPlace

  • The #1 AI Investment Might Be This Company You’ve Never Heard Of
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The post Plug Power Stock Jumps on Plans to Save $75 Million Annually appeared first on InvestorPlace .

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