Most businesses, particularly small businesses, go through a distinct life cycle. Knowing what cycle your business is in can be beneficial, particularly when it comes to planning for the future.
A business that has completed the five cycles.
Establishment
This stage involves the planning and implementation of the business. This is often the stage containing the greatest struggle; many businesses do not survive this phase.
Growth
Once a business has survived the early stage and achieved viability, the next stage is growth. The business is typically starting to show a profit and the owners start to think about planning for the future.
Expansion
In the expansion phase the business starts to branch out. A larger or additional facility may be taken on and additional staff may be added.
Maturity
When a business has reached maturity, it has also achieved a level of stability. It is financially sound enough to where it can survive downturns, and it now has a stable of established clients.
Decline
When a business starts to lose steady clients that it cannot replace, it begins to decline. Profits will begin to fall and the business will reach the point where it no longer can afford to operate, leading to its ultimate demise.
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