A common cause of small-business failure among once-profitable companies is over-expansion, which leads to unsupportable expenses and erosion of profits. Done correctly, an expansion can increase your sales, raise your profits and diversify your income streams. Understanding the basic financial risks and rewards when expanding will help you decide if a new product, increased production, second location or a business acquisition is right for you.

Financial considerations compel entrepreneurs to master some level of aspects that they should master and consider. List and discuss those aspects.