Getting a business off the ground can feel a lot like a roller coaster, full of ups and downs. Understanding the business cycle can help prepare you for a smoother ride.
Growth & Expansion
1: Planning/ Development
The initial period of the business life cycle is referred to as the PLANNING or DEVELOPMENT phase.
It starts with an idea that's developed into a business plan. The business plan needs obtainable steps to get off the ground.
talking to experts, making connections with others
write and rewrite business plan
obtain funds through bank loan or investment
LAUNCH is the time where the business actually opens.
Doors are open: product is selling or services being offered
LOTS of money being put into the business
sales may begin, but all earnings are reinvested into the business
3: Growth & Expansion
During the GROWTH & EXPANSION step, owners are beginning to see profit, while continuing to invest for added growth.
need to hire more employees
need to find more office or retail space
market for more business and sales
The MATURITY step is marked by stability.
profits are stable, and owner is seeing returns on their investments
sales are high and constant
firmly planted to withstand minor setbacks
The final stage of the business life cycle is DECLINE.
profits are consistently falling
ALL businesses will decline in profit at some point
ALL businesses will take heavy losses
During decline, owners must make choices
Rebrand - new marketing campaign to elicit new business
Pivot - offer NEW product or services, starting the cycle over again
Which stage of the business cycle is your business in when the owners are looking for a larger retail space?
As an entrepreneur, it's helpful to be prepared for the UPS and DOWNS of a business.
This week, take a look at a business in your neighborhood and see if you can identify which stage of the life cycle they are in.
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Educator, junior Instructional Designer