Advantages and disadvantages of expanding a business | Allianz Trade

Business expansion can be prompted by many reasons, though it generally occurs when your business seeks additional options to generate more profit. You may be considering expansion to overcome problems, such as being able to respond increasing competition; or you might see the benefits of expanding a business because of success and therefore have the cash and profits to support growth; or you may want to investigate the advantages of expanding a business internationally.

Expansion might involve adding employees and franchises, increasing your marketing efforts, forming an alliance, offering new products or services, merging with or acquiring another business, or expanding online. There may also be benefits of expanding business overseas.

But whatever your reasons to consider the advantages and disadvantages of expanding a business, remember that growth can be a disruptive force, affecting every aspect of your business: your staff, resources and finances.

So, it’s important to consider not just the benefits, but also the disadvantages as well. Check out our article The key questions to answer before expanding into new markets if you’re considering opening in another location.