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  • 16 Aug 2018

What Are the Advantages and Risks of Business Expansion

Business Expansion

What would be your ambition if you have a small business? Obviously, to expand and make it bigger. However exciting this aspiration may seem to you, there are advantages and disadvantages of business expansion. While disadvantages are often outweighed by the advantages, it is important to not to neglect either of the two aspects. let’s dive into it.


● Addition of new talent: - One of the clear advantages of business expansion is you are going to hire all new staff with qualified people. The talented personnel take your business to the new heights by contributing with their skills. These people bring your business into a more streamlined phase and make it more organized.

● Enhanced Clientèle: - The enhanced and broader customer base eventually improves your sale and brings more profit. Customers are important to any business. They are the core base through which you earn your profit. Expansion in business delivers you a wider sense of clientèle base.

● Favouring conditions for better financing: - One of the best reasons for expanding your business is, it brings more favourable condition for financing. It puts you in a condition where you can acquire financing without any hassle. Your financing can also save you in case of a fall-back.

● Possibilities of relocation: - Expansion in business gives rise to the opportunity of testing international waters. Going global is one of the best ways to earn huge profits and setting parameters in your quality services. You may have established your product or service in your country. Going global gives you new opportunity to relocate your business across waters.


● Quality compromise: - Compromise in quality is one the biggest issues that a newly expanded business venture may face. Chances are, you may not be able to maintain the quality in your product or service which you have been maintaining in your own country. This could result in a business jeopardy and would affect the overall project.

● Employee turnover: - One of the biggest disadvantages of expanding a business internationally is employee turnover. If you have already established your business in your locale, you might be aware of the cost involved in it. It is not easy to deploy responsibilities to a new employee. Your previous employee might be better at handling certain tasks, which the newer one may find difficulty in.

● Challenges in finance: - To relocate to a new place, especially when you are expanding your business, costs huge a fortune. Finances do not come easy and require complicated official paperwork and what not. On top of that, establishing business across the boundaries of your country requires huge finances.

● Loss of control: - If you haven’t done enough homework on building a firm strategy, chances are, you may lose control over your business. This is the last point, yet scary one that you may want to take into consideration. Business expansion requires detailed execution of marketing tactics and product promotions. It is necessary to come up with a rock solid plan, before going global with your business.

There are advantages and disadvantages of business expansion and taking both into consideration is a wise advice that you would get from an expert. At the end of the day, it is all about expanding your business without getting into troubled waters. While advantages bring you a huge fortune, disadvantages introduce to the possible dangers. By rectifying the loopholes, you can overpower the demerits and take your business to the new extremes of expansion.

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