Long term: Overview, definition, and example
What is long term?
"Long term" refers to a period of time extending well into the future, typically over a year or more. It is often used in business and finance to describe strategies, plans, investments, or goals that are intended to be realized over an extended period. The exact duration of the "long term" can vary depending on the context, but it generally implies a commitment to outcomes or objectives that require patience and sustained effort to achieve.
For example, a business might have a long-term growth strategy that aims to expand its market share over the next 5 to 10 years.
Why is the long term important?
The long term is important because it allows businesses and individuals to focus on strategic goals, growth, and investments that may take time to yield returns. Focusing on long-term objectives encourages careful planning and consideration of factors that could affect future success, such as market trends, economic cycles, and technological developments. In business, adopting a long-term perspective can help create stability and allow companies to weather short-term challenges while focusing on sustainable growth.
For businesses, long-term planning can also help attract investors who are looking for steady, reliable returns over time rather than quick profits.
Understanding the long term through an example
Imagine a tech startup that plans to launch a new product line in the next year, but its long-term goal is to become a market leader in that product category over the next decade. While short-term goals focus on product development and initial sales, the long-term strategy includes expanding the product range, building brand loyalty, and increasing market share over several years.
In another example, a manufacturing company might invest in new technology and infrastructure with a long-term goal of improving efficiency and reducing production costs over the next 15 years, even though the return on these investments may not be fully realized for several years.
An example of a long-term clause
Here’s how a long-term clause might look in a contract:
"The parties agree to develop and implement a long-term strategic plan for the expansion of operations, with the goal of increasing market share by 15% over the next 5 years."
Conclusion
The "long term" refers to a forward-thinking approach focused on achieving goals and objectives over an extended period. Whether it’s in business strategy, investments, or personal goals, planning for the long term allows for sustainable growth and helps ensure that immediate challenges are balanced with future opportunities. For businesses, taking a long-term view is key to building a successful and resilient enterprise.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.