Getting a business off the ground can feel a lot like a roller coaster, full of ups and downs.Byte Author Uploaded ImageUnderstanding the business cycle can help prepare you for a smoother ride.

Business

Life

Cycle

  1. Planning/ Development

  2. Launch

  3. Growth & Expansion

  4. Maturity

  5. Decline

1: Planning/ Development

The initial period of the business life cycle is referred to as the PLANNING or DEVELOPMENT phase. Byte Author Uploaded Image

It starts with an idea that's developed into a business plan. The business plan needs obtainable steps to get off the ground.

  • research

  • talking to experts, making connections with others

  • write and rewrite business plan

  • obtain funds through bank loan or investment

2: Launch

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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.

  • profits increasing

  • need to hire more employees

  • need to find more office or retail space

  • market for more business and sales

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4: Maturity

The MATURITY step is marked by stability.Byte Author Uploaded Image

  • profits are stable, and owner is seeing returns on their investments

  • sales are high and constant

  • firmly planted to withstand minor setbacks

  • running well

5: Decline

The final stage of the business life cycle is DECLINE.

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  • 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

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  • Rebrand - new marketing campaign to elicit new business

  • Pivot - offer NEW product or services, starting the cycle over again

  • Shut down

Quiz

Which stage of the business cycle is your business in when the owners are looking for a larger retail space?

Growth & Expansion

Maturity

Decline

Summary

As an entrepreneur, it's helpful to be prepared for the UPS and DOWNS of a business.Byte Author Uploaded Image

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.Flaticon Icon

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This Byte has been authored by

HS

Heather Savage-Scott

Educator, junior Instructional Designer