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.

Business

Life

Cycle

1. Planning/ Development

2. Launch

3. Growth & Expansion

4. Maturity

5. Decline

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.

• research

• 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

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

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

• running well

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

• Shut down

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.