Of the Five Stages to a Business Lifecycle, Which are you in?

Every company experiences rises and falls in a normal lifecycle. There is a temporary phase that it enters or exits based on different factors like the nation’s economy, increased product supply, reduced consumer demands, etc. It is always important to know which current stage the company is going through.


The product launch is the most anticipated phase in the business’s lifecycle. This is accompanied by the launch of a marketing campaign to promote the products online, in stores or by mail. This is the time when the staff is often very busy with their heaviest workloads.


Usually, after the first startup year, the business begins to see growth in the number of sales and profits. More people take notice of the brand and join a customer base that continues to grow steadily for several years or longer.


The shake-out phase is a gradual increase in sales and profits. The business’s growth continues at a steady yet slower pace than before. This period is marked by the growing desire to remove competitors, reduce human errors and identify other risks that are undermining the company.


The maturity phase is similar to the middle-aged period of a person’s life. The business remains vibrant, but its life cycle has reached its peak and is beginning to slow down. The brand and its products are well known in the market, but unless more innovative ideas are made, the company receives no further attention.


The decline phase occurs when a detrimental event, such as a manmade or natural disaster, causes the rates of sales and production to decline significantly or stop altogether. In most cases, the products are no longer being made. In recent decades, more than a handful of industries have become obsolete due to the increasing use of technology. An example is the decline of public libraries because people would rather get their information from e-books, blogs or digital libraries.

The stages of a business lifecycle are used to evaluate its level of success. This classification helps to determine the types of efforts that are needed to improve a business. During the decline stage, the business owner may need to manufacture brand-new products or merge with a bigger, more successful company. There are other stages that are important to know and understand in order to run a successful business.

Stuart Frost Laguna Niguel, has 30 years’ experience in founding and leading successful data management and analytics startups.