Why the owners of a business may want to expand the business?
Businesses have different objectives. These objectives are certainly influenced by the owner's vision and goals. Some owners might be content with the small size of their business, whereas there will be business owners who may want to expand the business. Let us explore the reasons:
Possibility of higher profits: As businesses expand ,sales turnover improves, which means more profit for the business and more returns for the owners.
More stability: Big businesses are more stable and less vulnerable to market adversities. Bigger businesses usually operate across markets and even if one market is not performing well they can rely on other markets to average returns.
Attract the best talent: Bigger businesses usually offer better salaries/perks to their staff. Better salaries attract the best talent in the industry. This leads to better efficiency for the business and thus more profits for owners.
Economies of scale: Higher sales results demands higher production levels. As production increases, it brings in advantages related with economies of scale for the business.
