Why Is Volume Considered to Be Critical for Any New Venture?

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Date Submitted: 09/07/2011 09:08 PM

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Why is volume considered to be critical for any new venture?

The importance of volume for new ventures is instrumental to gaining viability and staying power within the market. The most important aspect of volume for a new venture is it produces the ability to generate revenue. Revenue is what drives a business with more cash on hand; more expanding and brand marketing can be done to grow the company. Customers are going to be attracted to a well-designed new product or service that comes with an affordable price. It is all about providing something that consumers want and can afford that beats what the competition offers. That gives bargaining power which is valuable in any business setting. A new organization that has the ability to attract a large amount of volume fairly early in existence allows that organization to gain power within the surrounding community and from its competitors. Gaining recognition also allows for the new organization (or venture) to have high bargaining ability from suppliers by showing that they have the ability to attract customers and sell products and services at a high rate. This enables the organization to bargain or demand lower costs from purchases made from suppliers. These savings from the purchasing product from the suppliers will pass on the savings to the customer. According to Finkler et al., "Volume increases result from price cuts. And few organizations can raise prices without expecting to lose customers to the competition" (2011). This gives the new organization an edge over their competitors because they have the recipe for success, or potential success, and are doing something that entices customers away from their competitors.

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