Business Life Cycle - 7 Stages and Importance Featured Image

An independent business is perhaps the dream of many budding entrepreneurs around the globe. By definition, business is the activity of making money by producing or trade of products and even services. A business does not necessarily refer to a company or corporation. It need not have a formal organization or be a part of the corporate world. It can range from a street peddler to a multinational company.

However, broad the spectrum of the scope is all the business pass through more or less the same phases or stages. The prospect of starting and running one’s own business is exciting. Days have come where you can start a business as a teenager. Still, it is important to realize the life cycle of any business to manage the proper functioning.

Types of Businesses:

Sole proprietorship

Partnership

Corporation

Co-operation

Franchise

Stages

Stage 1: Planning and mapping

Hence, the first step is to study and analyze the scale and scope of the business. Things to consider:

  • The scope and coverage of your business- in terms of the product or service offered.
  • The monetary investment you will be capable of arranging.
  • The work-force required to carry out the required production, execution, or sale
  • The quantity or quality of the business, that is, which of the above-mentioned category will your business fit into.
  • Management strategies and work execution

The planning and procuring for a business involves getting the required investment, obtaining legal rights to run the business, recruiting the team of employees, and finding an appropriate set-up to run the business. Another important thing is to map all the possible future scenarios and come up with solutions prior to handle a crisis or loss.

Stage 2: Launch

During the launch phase, the sales are low, and the business may even face losses before the scene can get better. Hence, stocking up enough supplies to get through the launch phase, until the business is somewhat established, is extremely crucial.

Stage 3: Growth

Stage 4: Survival and sustenance

The problem with frequent fluctuation is that the monetary graph is too steep to make an actual significant gain at the end of the day. All the profit obtained during the peak time is used up in covering the loss during the low phase.

Hence, maintaining a stable business is much better than a hundred jobs at once and then no jobs for a period.

This can be achieved by:

  • Supervising the management of business
  • Frequent analysis of the functioning and the income table
  • Making timely revisions in sales, production, and marketing methodologies.
  • Evaluating employees performance on a regular basis
  • Being aware of the changes in the market and the evolution of business supporting technologies, government schemes, and public notions.

“Being aware”- of your business’s performance, of the market situation, of the scenario ahead of you, “being aware” is most essential for running a stable business.

Stage 5: Expansion

  • Your business is doing pretty well
  • You have cleanly charted out new ideas and work-plan
  • The market is conducive; monetary support is sufficient
  • Probably the competitors are experiencing lose
  • Or simply when you get the chance to do something bigger, better, or greater.

In fact, expansion can also begin when you notice a stagnancy in your business for over 5 years, with no decline, but saturated gain.

Stage 6: Maturity

Stage 7: Pack up

Conclusion

Originally posted at RuhaniRabin.com
Click here if you would like to write at RuhaniRabin.com

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Ruhani Rabin being a tech and product evangelist for almost 20 years. He was VP, CPO for various digital companies. Plays with Drones in his free time.

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Ruhani Rabin

Ruhani Rabin being a tech and product evangelist for almost 20 years. He was VP, CPO for various digital companies. Plays with Drones in his free time.