Cory Bash has been a private company for all of its business life. The owners long to expand their vision around the world, but have only reached the US and parts of Latin America. Does it have what it takes to become an initial profit offering? What benefits would the owners get by doing so?

Question

Business

Tripp Collins

9 May, 18:41

Cory Bash has been a private company for all of its business life. The owners long to expand their vision around the world, but have only reached the US and parts of Latin America. Does it have what it takes to become an initial profit offering? What benefits would the owners get by doing so?

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Answers (1)

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Darien Spence · Answer 1

1. No

2. The benefit would be in terms of profit though in the long run

Explanation:

When a business is established in a new environment or country, the initial investment might not result into profit not because the company is not well managed but because it is trying to recoup the costs associated with such investment.

Costs associated with investing in a new country includes but not limited to initial payment of staff salaries, office buildings, company registration fees and other administrative expenses.

The company would of course earn but such earnings would be used to augment cost initially expended towards it's establishment. The owners tend to benefit from the company's profit in the long run because most of the aforementioned costs would have been covered and the company also known in terms of the products or services it offers to the public.