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Business Expansion

Categories: BusinessInnovation


Business expansion is a major forward step toward a ensuring that the business or firm will live to carry out its operations in the long run. a key step toward business expansion is ensuring tat a firm invest more of its available resources to research and development so that a firm can meet the ever changing customer demands, this result to innovation of new product to meet the specification of customers in different location. In the business expansion plan a lot of market research is of paramount importance because the firm has to be aware of the market situation in the areas it will expand its operations, more so a business development plan has to be laid down so as to realize the input in terms of financial, human resources and other kind of input beside seeking expertise advice on how to carry out this process.

Of great essence during the expansion is for the firm to know that innovation offers a great opportunity for a firm to be at a competitive advantage.

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Depending on the geographical location a firm may be interest to expand its market in to; it has to know the culture, business methodology, the employment acts, language, finance and the business taxation of that location[1].

Prior to begging any activity related to expansion, a statement of purpose needs to be written down and this shall be used as the guiding tool, this statement must contain the objective  and mission of expansion which should not overlap the principal objective and mission of the whole firm (CPI)


Though Consumer Products Inc is a produces various consumer products that are doing well in a number of the United States states, it is faced with fierce competition by the big companies like Colgate, Unilever among others, it therefore important for the firm to plan for expansion to other regions and increase its market share otherwise it faces the challenge of becoming extinct.

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Prior to indulging in the expansion process the management of CPI need to know the financial position of the firm so that it can how much it can expand without affecting the running of the operations. The balance sheet of the firm is a good indicator to display the amount of available resources to be used for expansion purposes.  The management should also know the cost of borrowed capital so that the cost benefit analysis of the future expectation can tell whether these plans of expanding with borrowed capital are viable or not.

A proper market research of the products to be distributed to the other new markets need to be carried out, they management must know if their exists other barriers of entry in other State or not, the dynamics of these markets must be at hand besides the level of competition and the expectation of the competitors ones it starts its operations in the new territory. The markets must clearly be defined, the prices of the products must be set while means and way to satisfy the customer needs must be defined and how to attract and sustain a good share of the market. The firm must plan its market entry skill as to whether it will enter the new market as a wholly owned subsidiary, look for agents or build up a distributor with sales agents.[2]

The new cost of expansion must be compared with those of other firms in the markets and those of the domestic markets so that they can be minimized while trying to maximize the revenues. A good site for the business be to identified with proper buildings in place and the demographic trends of the area needs to be identified so as to maintain the loyal customers while winning new ones with time.

The management team needs to be identified with clearly defined roles. The other personnel needed for the proper running of the business must be identified and whether they need any special training. There wages, benefits, taxes and fringe benefits need to be set in their wage scale.

The future financial expectation needs to be enlisted starting from the capital requirement list, income projection from the projected profit and loss account. Supporting documents need to written down or produced; these may include the resumes, contracts, legal documents, leases and letters of reference.


            The expansion plan needs to carefully and strategically planned to avoid future disappointments. The managers need to take a keen look at all the underlying factor that can have any impact to the success of the firm. An evaluation of the result of the expansion need to be done so that the business is corrective action is taken to turn the business to the correct path in case the mission and objective are not realized.


 Business Expansion Plan for Small Entrepreneurs, retrieved on 22nd, September, 2007, available at

Rhonda M. Abrams (2003) The Successful Business, The Planning Shop New business enterprises publishers, UK

Sample Business Expansion plan, retrieved on 22nd, September, 2007, available at    

[1] Business Expansion Plan for Small Entrepreneurs, retrieved on 22nd, September, 2007, available at

[2] Sample Business Expansion plan, retrieved on 22nd, September, 2007, available at    

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Business Expansion. (2020, Jun 01). Retrieved from

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