The Three Main Stages of a Business Lifecycle

It’s common for businesses to go through stages in their lifecycle. Each cycle has its share of challenges and rewards You should prepare yourself for anything that comes your way. So having strategies in place, such as business plans and financing secured, is something you want to have together. Here are some questions you might want to ask yourself before starting your business as well. Now keep in mind that not every company will experience all phases, and generally, there are multiple phases you may see. But today, we will focus on just 3 of them.

Stage 1: Development

This phase is where the idea is born. This grand idea that you want to become a small business owner. It’s also known as the start-up or the development phase in the business lifecycle. This particular phase, you’re building value to your idea. You will want to make sure what you have will stand on its own. That what you want to sell will be something others will want to purchase. This particular lifecycle is where you will learn who your ideal client is.

You will also find yourself in a strategy phase. Creating a business plan is vital. Knowing where you want to go, where you should be at certain times of your business and also have the financial capital to back all of this up. During this time, you might not be making much income, so planning your spending is also an essential factor to keep always top of your list. You will face challenges of possibly doubting if you will be able to keep up with the demand for your product as you start to see growth. You will also want to make sure you’ve thought of as much as you can ahead of time to keep yourself and your business in a safe place.

Many small business owners have grand visions, but implementing them well is where many see failure.  For example. You dream of opening a restaurant. You find the perfect location and get a talented back house and front house staff. However, they don’t take the time to test the menu out, perfect the food quality, and jump right into a grand opening. You’ve failed to get client approval.  Many restaurants might see their companies fail to thrive here, and before they can even have a fighting chance, they’ve run through their start-up capital and have closed down, hoping to break even by selling equipment and such.

Stage 2 Growth:

Your business has made it through the development phase, AKA, the hard step. But the work isn’t done yet. You’re not out of the woods, but you see the light at the end of the tunnel. You’ve reached the growth business phase in the business lifecycle. By now, your consistently generating monthly income. Your overhead is taken care of, and you might have a small or sizable profit now. Your business is thriving. It might even be time to think about expanding. Adding more staff, more products, or maybe another location. Where ever you are in your business, this particular phase can be challenging. Your goal is to continue to grow and meet the demands of your customers. You might be doing some maneuvering around existing competition, or a new upcoming business might be opening that will give you a run for your money. You will continue always to face the challenge of finding and keeping workers to compliment your business and represent it well as it grows.

Stage 3 Maturity:

At this point, your small business is seeing profits year after year. Your business is successful, and you’ve made a lot of great choices.  You’re success might be overflowing into business savings, and you’ve been able to recoup any losses you took early on, and you could even have loans paid off.  At this maturity phase in the business lifecycle, here is where most business owners see two roads to travel down next; continue to grow or exit.  You may decide that you’re not ready to step away yet.

Further expansion would be your next move. Generally, small business owners will find themselves going slightly backward and retrace the steps they made in the growth phase of the business lifecycle but on a much larger scale. They may see that in their expansion efforts, bringing on a partner might be beneficial. Someone who’s like-minded and could even possibly be interested in taking over the business when you feel like exiting is your next stage.  If expansion is not in your interests, you could be ready to exit.  It might be time to move onto that new idea you’ve been thinking about for a long time. Or retirement could be officially in your immediate future, especially if you are a veteran small business owner and have transitioned from Active Duty Service.

Either way, making it to this phase in the business lifecycle means you’ve done an incredible job with your dream, and whichever road you take, you should commend yourself.  Just remember a couple of things. Whatever lifecycle you are currently in, and the challenges you may face, know that business plans can be adjusted as you navigate through the waters of entrepreneurship.  Don’t forget your why and reflect on it often. There could be many times wherein this endeavor it keeps you grounded and keeps you reaching for the finish line!