Business is dynamic and every day is different. Despite the fact that everything changes around you all the time, you need a direction of travel for your business.
In this article we will explain what both short-term and long-term goals are and how they can benefit your company.
What is a short-term business strategy?
A short-term business strategy typically focuses on what can be achieved within a timeframe of between three months and a couple of years. These goals tend to be specific and only cover a few areas of business. Examples of short-term goals can be to:
- Demonstrate employee appreciation by giving out bonuses,
- Redesign the customer service infrastructure of your business,
- Spend time researching your competition,
- Post more on social media.
All of these short-term goals are relatively simple things you can implement for your business to bring about a positive outcome.
Why should I have a short-term business strategy?
Short-term business strategies are quick to device and put into place. It doesn’t take an age and dozens of meetings to devise an effective bonus scheme. If you do choose to bring in an enhanced commission scheme, it will achieve immediate employee satisfaction (assuming staff hit their targets).
You can bring in short-term business strategies to improve your cash flow. This is particularly helpful if trading is tough right now and your cash reserves are being threatened by seemingly never-ended outgoings.
One way you can do this is to incentivise your clients to pay their invoices earlier by offering a small discount. Your clients may pay earlier meaning that your cash reserves are replenished to some degree and various wolves can be kept from the door.
Short-term planning allows your business to adapt quickly to shifting circumstances. If something changes in, for example, the law and that changes affects your business (for example GDPR and the credit card fee charge ban), you can plan for this change and implement the necessary changes.
What is a long-term business strategy?
Long-term business strategies are used to steer your business in a pre-defined direction for the future. These desired outcomes are normally results-based and these plans are set within a timeframe of anywhere between one year and ten years.
Examples of long-term goals can include:
- Doubling your revenue over the next 5 years,
- Decreasing staff turnover,
- Have 95% of customer feedback be positive.
Longer-term business strategies are normally comprised of many short-term plans, the successful completion of which moves a company towards the required end-point. To use a well-worn cliché, a journey of one thousand miles…
Why should I have a long-term business strategy?
A long-term business plan gives you as a director and your business something to aim for. Growing a company with the ultimate goal of a sale of the business at the end of the process is the prize for many entrepreneurs. Growth can only be achieved and measured by a series of a targets and to paraphrase another cliche – a director without target hits nothing.
Which is better?
This is an often-asked question, and the answer is both short-term and long-term strategizing are equally necessary in a modern business.
You have no hope in achieving your long-term goals if you never change anything in the short-term. In the same sense, if you don’t have a long-term goal, then your short-term goals will be disorganised and lacking purpose.
We can help
We’ve helped clients with their business planning to make sure that the numbers add up and that growth will be professionally and financially possible. To talk with us, please call 01202 577 500 or email us at firstname.lastname@example.org