The optimization or improvement of the business process can be achieved in several ways by taking such process analytics and reports into consideration. This is where the human intelligence uses the business intelligence reports to create intelligent processes for the organization. After the business process is designed and developed, it is now time to deploy it in a live environment where it can be executed. Deploying a process can require coordination, integration and change on some fronts – a lot of it could be to do with the human beings involved in using this process. This is typical cutover procedure, where users move over from an existing way of doing things to a new way.

Similarly, the employees of company affiliates around the globe might have less awareness about UAE market and could be notified about the project progress through email distributions or corporate newsletters. The closure stage assumes that the project is ready and could be delivered to the customer. Furthermore, it requires to communicate completion to other stakeholders and release resources to other projects, including project documentation. However, it should be completed only after the project is evaluated against overarching objectives and main constraints. Finally, a lessons-learned session is conducted to examine pros and cons of the project to ensure that teams can consider project mistakes and make improvements in the next efforts.

In What Stage of the Business Life Cycle Does Seed Financing Occur?

Hence, while project management is procedural, it requires customization depending on the project size, team composition, and specifications. Not all businesses will experience every stage of the business lifecycle, and those that do may not necessarily experience them in chronological order. For example, some businesses may see astronomical growth right after startup, and the founders may decide to cash out right away, jumping straight to that “exit” stage. Any company during its existence passes certain stages of business development. And in the family cafe, and in the clothes online store, and at the factory on manufacture of steel pipes there are similar processes and problems which economists compare to the existence of a living organism. Many businesses skip the previous stage and directly land onto this final phase, where the business has incurred enough lose to lead to its close.

There are four stages – introduction stage, growth stage, maturity stage, and decline stage. It refers to the expansion and contraction of a business over a period of time. It can be categorized into four different stages in a graph with the business’s existence period on the horizontal axis and one of the metrics of financial terms on the vertical axis. The four stages of the business life cycle are depicted in the graph below and explanation henceforth.


During the planning stage, project solution is further detailed to identify the work to be done. For this stage, the important part is project scoping, where tasks and resource requirements along with the appropriate strategy for the execution are identified. Based on the scope, project plan, budget, and work breakdown structure are developed and specific objectives are further formalized. Overall, planning stage assumes that the project is broken down into sequenced and manageable units, the resources per unit are estimated, and the most appropriate way of scheduling unit execution is chosen. Private projects are financed by the commercial organizations or private investors, such as opening a new startup venture.

  • Growth slows down, and the sales grow at a very steady level closer to the industry or economic growth rate.
  • This phase is when sales growth begins to accelerate, characterized by increasing sales year-over-year.
  • A business life cycle graph is represented with the horizontal axis as the time and the vertical axis as one of the financial metrics, such as sales, profit, and cash flow.
  • In the funding life cycle, the five stages remain the same but are placed on the horizontal axis.
  • In fact, throughout the entire business life cycle, the profit cycle lags behind the sales cycle and creates a time delay between sales growth and profit growth.

Read how to take advantage of this in this article about types of crowdfunding. Being aware of the changes in the market and the evolution of business supporting technologies, government schemes, and public notions. 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. The scope and coverage of your business- in terms of the product or service offered. Indeed, a number of modern authors have tried to combine Marx’s and Keynes’s views.

Examples of Industry life cycle

However, decision-making is often limited to the single creator of the business concept. A one-man business in which the business is owned and operated by an individual, who may hire employees from time to time. While economists have found it difficult to forecast recessions or determine their likely severity, research indicates that longer expansions do not cause following recessions to be more severe.

business life cycle

Because any strategy for delaying or mitigating decline almost always requires cash flow, meaning there needs to be consistent revenue. The implication of the business life cycle is that just as there’s a beginning for a business, so too, there is an end. As the business winds down, the owner can start to consider a new direction for his or her life — but businesses don’t actually have to end. Since revenue growth has slowed, you must compensate by reducing your expenses. This reduction can be achieved by revisiting the business expenses, such as marketing, inventory, and general operating expenses. The idea is that with climbing revenue as proof of concept, marketing will increase reach and bring in more business.

Features of Project Management

Although sales continue to increase, profit starts to decrease in the shake-out phase. This growth in sales and decline in profit represents a significant increase in costs. Therefore, in the growth stage, the company is looking to expand its customer base and raise production to reach the required production levels. The concern of companies in the growth stage is how to obtain adequate funding to reach optimal production levels that make profits.

  • Innovation is the critical element necessary for a life cycle extension to happen.
  • It is too easy to relax on the success at this stage of the life cycle; the market is persistent, and competition is cutthroat.
  • The New York Fed publishes a monthly recession probability prediction derived from the yield curve and based on Estrella’s work.
  • For instance, when we talk about the human being’s life cycle, it means everything from birth to death is a part of the life cycle.
  • If you’re in a later stage of growth, having a new perspective from a marketing consultant can open areas for profits that have not yet been realized.
  • If you’re a visionary and you’re in the growth or scale phase, you’ll need to adapt or hire a barbarian.

There has been some resurgence of neoclassical approaches in the form of real business cycle theory. The debate between Keynesians and neo-classical advocates was reawakened following the recession of 2007. Usually such sources are unpredictable in advance and can be viewed as random “shocks” to the cyclical pattern, as happened during the 2007–2008 financial crises or the COVID-19 pandemic. In past decades economists and statisticians have learned a great deal about business cycle fluctuations by researching the topic from various perspectives. The decline stage closes the life cycle that started with development and launch. Sales and revenue continue to shrink until profits dry up completely.

The evolution of entrepreneurial ventures spans various phases, from planting the seeds of a business idea to reaching maturity and in some cases, decline. Understanding the key stages of the a small business guide to trial balance is essential to ensuring that your business avoids that fate. It also enables businesses to adopt a different approach based on the life cycle stage. Also, each stage of the business model has its requirements, and your knowledge of these stages and needs helps you make the right decisions and choices. This methodology aims at getting to the suitable business model as quickly as possible and at the lowest cost.