When speaking about preemptive in business, it almost always refer to preemptive right afforded to stockholders, which allows them the right to buy additional shares before such shares are offered to the public during a seasoned sale. Preemptive right shields major stockholders from diluted ownership.
Nevertheless, in entrepreneurship, being preemptive takes up a much comprehensive meaning. Being preemptive is being prepared for the worst scenario. It means one has undertaken the necessary preventive measures to counter anticipated negative occurrences in order to minimize if not negate depressing outcomes.
In the business arena, nothing is ever totally predictable. Things can go A-okay one minute and sour the other. Studying past data may help in forecasting outcomes, but there is no guarantee for accuracy. Business owners need to prepare for both the best and the worst outcomes, playing a good balance between optimism and pessimism.
No entrepreneur wants to be caught off guard. As much as possible, a business owner wants to stay ahead of the game and to be updated with what’s happening around him, particularly those events that affect the success or failure of the business.
In operations management, there is such thing as preemptive scheduling wherein all other functions are put on hold in lieu of a preemptive schedule, which has been established as the more important and the more urgent among all others. This ensures that the most important and urgent operation is attended to in order to prevent a negative outcome.
In inventory management, a preemptive entrepreneur establishes a method of handling inventory such that there are ample stocks to address an anticipated surge in demand. At the same time, the entrepreneur reduces inventory level during an anticipated sales slump to lower cost of handling and storing inventory. In the same way, the entrepreneur hires more workers during peak business season and reduces workforce during off-season.
Businesses fold up because they’re not prepared to face the worst of outcomes, particularly at the onset of recession. An economic downturn provides the best environment that test just how preemptive business owners are. It puts everyone on survival mode and the ones that stand the test of time are naturally those are preemptive enough to withstand and/or evolve the slump.