The Proactive Business versus the Reactive Business

Does your business take a proactive approach or merely react to events? The difference is more than semantics.

What Does Proactive Mean?

Essentially being proactive means being anticipatory or to prepare for the unexpected. For example, rather than waiting to decide what you will do in the event of a cash shortage you instead make plans for how to handle this event. I must confess that proactive is one of those words I’m not crazy about as it has been overused. However, the concept is very valuable. When it comes to being prepared for the unexpected, a proactive business is a step ahead of one that merely reacts. This represents a distinct advantage.

Competition, Competition, Competition

Some businesses have a tendency to wait to see what their competitors do before they make decisions on how they will compete. It is for this reason that they often operate at a distinct disadvantage and are late to the table when it comes to obtaining market share. Now of course there is much to be gleaned from monitoring competitors’ activity, but that is quite different from merely waiting and reacting. While competitors may give us clues as to how to proceed, that does not mean we need to wait to act. Rather, use what you learn about your competitors to help prompt you to consider what customers are seeking and get ahead of the curve to out-compete. That is running a proactive business while merely responding to the actions of competitors is reactive.

Being Proactive Internally

I briefly mentioned this in the comment about preparing for how to handle a cash shortage, but it is applicable to a multitude of issues. For example, do you know what you need to do if customers do not respond as favorably as you hoped to a new product or service offering? What if the advertising campaign you thought would produce strong results falls flat? Do you have a contingency plan? Whether you are dealing with financial, marketing, sales, advertising, operations or any other area of a business, it pays to be proactive and anticipate potential problems before they occur and prepare your response in advance. If they never do occur then great, but if they do and you have not prepared alternatives in advance then you will be scrambling to find a solution and it could be too little too late.

So if you are not already taking a proactive business approach then it is time to consider it.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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