One Step Ahead

When starting a business, an up-front investment is necessary to hire the talented personnel, acquire the appropriate equipment and instrumentation, and secure the space required to operate the new business successfully.

Written byDavid F. Beyerlein
| 5 min read
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The Benefits of Being Proactive Versus Reactive in Hiring and Purchasing Practices

When starting a business, an up-front investment is necessary to hire the talented personnel, acquire the appropriate equipment and instrumentation, and secure the space required to operate the new business successfully. Typically those initial activities require an investment of time and money prior to securing the work that will fund those resources, but new business owners likely have anticipated, and are prepared to accept, that initial risk or the business never would have been started. Once the business is operating successfully, however, the decision to continue expanding in anticipation of work, or expand only in response to increased workflow, becomes more difficult.

Both approaches have tangible risks. When a company chooses to expand proactively, it assumes the financial burden of the growth prior to the increase in revenue associated with the new projects. While that risk may worry the board of directors at many corporations, expanding reactively places clients’ projects and timelines at risk. Therefore, when planning a sustainable strategy for growth, the management team at any company should consider the value of the company’s reputation and weigh the short- and longterm opportunities and financial risks for the company.

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