No time like the present to start a new venture（二）.docVIP

No time like the present to start a new venture There may be no better time than the present to start a new business venture. Newly formed companies have a distinct competitive advantage as they can start with a blank sheet of paper and create an efficient business model from their first day of operation. They can source cheaper business inputs to produce products and services that will earn them sustainable margins over the next few years. Existing companies, in comparison, are grappling with how they can morph into new leaner, more efficient types of organisations. Existing pay structures and incentives, residual cost structures and staff attitudes, built up over the good years, are now working against these incumbents and market share leaders. In good times, it is difficult to contemplate setting up a new business to compete in highly competitive markets. But in softer economic times, the presence of a number of competitive companies indicates a volume of business that can support this level of activity. Henry Ford started his business when there were already a number of car manufacturers operating in the US. The key is in differentiating your products from the incumbents. During times of recession companies and consumers look at all expenses, seeking ways to lower costs. In effect, they are going through what marketers call the “Evaluation of Alternatives” mode for all the services they buy. This provides great opportunities for new entrants with the right mix of utility and price to get in front of potential customers. A new venture in an mature market can be well received as a new cost-effective alternative to existing suppliers. Older companies may find it difficult to swallow significantly lower prices, especially if they have accumulated a high amount of fixed costs. This may lead them to be less flexible in dealing with customers, giving new entrants a chance to win the business. Businesses that are focused on cost-saving initiatives can do very wel