Economies of Scale

Economies of scale refers to the fact that as a company becomes larger, its costs per unit of production tend to fall, making the company more competitive and more profitable. The division of labor, increased purchasing power and the specialization of internal functions are the three primary means for achieving a higher rate of return as the volume of business increases. Economies of scale are a prime motivating factor for business acquisitions and mergers. Pacific Business Advisors can help your existing businesses achieve economies of scale by assisting your business find an appropriate acquisition or merger target.