Life Cycle Management

Just as all plant life and human growth and development moves through various life stages, so to does a business. The process a business goes through from 'the cradle to the grave' is known as the business life cycle. The common business life cycle stages include: the inception, introduction, growth, maturity, expansion, decline and the exit phase.

During the inception stage of the business life cycle, the business owner goes through the process of defining and identifying the business opportunity. This is known as the seed stage. Prior to the business startup the business framework is established to identify a niche area of operation. Often the business owner will leverage previous skills and experience in the business endeavor or will choose to align his/her passions with the business activity. At this stage operating capital needs to be sourced as no customer base or revenue exists.

The startup stage of the business life cycle is where the initial foundation of the business is established. The operating structure is in place and appropriate personnel have been hired. Companies going through this stage are focusing on establishing market share or introducing their products to the market. Building a customer and revenue base to provide cash flow to meet operating expenses and expand business operations is a primary objective.

The growth stage of the business life cycle is when new challenges surface in response to growing market acceptance, revenue and customers. Profitability is strong and competitors start to emerge. Companies look for ways to improve their processes and serve their customers better. This can include new business systems and hiring new staff to perform required operations that compete for time and attention.

The established stage of the business lifecycle is where performance improvements, business refinement and the outsourcing of business functions take place. Profitability is steady and the focus is on enhancing productivity by iteratively refining routine business processes.

The expansion stage of the business life cycle is where the business ramps up in response to identifying new markets and opportunities. This requires balancing the existing business structure and putting in place planning and initiatives to meet the new demand generated from additional sales channels and market share.

The decline stage of the business life cycle is where market saturation emerges. Competition intensifies and mergers take place as some companies seek an exit strategy in response to leveling or declining profitability. This can be in response to a change in the market landscape, changing consumer preferences or the introduction of new products and services. This prefaces the exit stage of the business process life cycle where the business gets sold or shut down.

Contact Us | Privacy Policy |