The difference between short-, medium- and long-term objectives is the time frame of each, and the implication this has on the nature of the objectives. Short-term objectives are generally those relating to that financial year, in a time frame from now to the end of the year (i.e. up to a year away). An example might be to raise turnover by 8% and profit by 9% by the end of the financial year.

Medium-term objectives are generally those that relate to a period from 18 months to three years or sometimes five years (whichever is appropriate for the organisation and people setting the objectives). These objectives will therefore be broader, can be reviewed and may need to be amended with time. An example might be to relocate to brand new premises of 20,000sq ft by March 2009. Of course the medium-term will become short-term with the passage of time, and should be reviewed and updated with this in mind.

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

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

A business plan is a great tool to help you methodically plot your business goals and objectives. Read the article here on how to write a businsess proposal.

See also: Tough times can help long-term productivity, group says