WHY THE OWNERS OF A BUSINESS MAY WANT TO EXPAND

• The possibility of higher profits for the owners.
• More status and prestige for the owners and managers – higher salaries are often paid to managers who control bigger businesses.
• Lower average costs(average cost refers to the per unit cost of production which is calculated by dividing total cost of production by total number of units produced).
• Larger share of its market – the proportion of total market sales it makes is greater. This gives a business more influence when dealing with suppliers and distributors, and consumers are often attracted to the ‘big names’ in an industry.