What is a potential advantage of business growth?

One potential advantage of business growth is the opportunity to lower average costs. As a business grows, it often benefits from economies of scale. This means that as production increases, the cost per unit of output typically decreases. Larger scale operations can lead to more efficient production processes, bulk purchasing of materials at discounted rates, and spreading fixed costs over a larger number of products produced. Consequently, a business can enhance its profitability if it can manage to sell at competitive prices while maintaining lower average costs.

In comparison, increased competition usually poses challenges rather than advantages for a growing business. Higher risk can accompany growth, especially if it involves new ventures or expanding into unfamiliar markets. Lastly, reduced market share would not be an advantage; rather, effective growth is often associated with maintaining or increasing market share within the competitive landscape.

Thus, the lowering of average costs stands out as a significant advantage of business growth, facilitating improved financial performance and a stronger position in the market.