1.

4 BUSINESS LIFE CYCLE

The Business Life Cycle is a natural procedure through which a company grows. It
illustrates the progressive and steady stages of business expansion, beginning with the
development of a prototype concept and proceeding to traction, from a slow growth phase to
a fast growth phase. It is sometimes divided into seven stages: Seed, Start-up, Growth,
Established, Expansion, Maturation, and Exit.

ESTABLISHED

GROWTH EXPANSION

MATURE
START-UP

SEED
EXIT

Figure 1.4: Graph of Business Life Cycle

According to the graph above, the first stage is the "Seed" stage, in which a firm
raises the initial finances and resources for their venture. This is where they will conduct
research to see whether the concept is sound, get mentoring, acquire a lot of advice, and
prepare to make things happen. When your business is in the seed stage of its life cycle, it is
only a notion or an idea. This is the birth or genesis of a new enterprise. With no established
market or clients, the firm will rely on funds from founders, friends, and family early in its
life cycle. Suppliers, consumers, government grants, and banks are all possible sources. Many
firms fail to get past the Seed stage because they are unable to properly implement their idea.
 During the Start-Up period, a company's time will be spent meeting people,
discovering innovative ways to advertise its products or services, and continuously putting
fresh ideas into action. Because they would not have many procedures at this time, they
should be fine-tuning their company's model to gain an understanding of the industry and
how to make money. First-time business owners must understand the key steps to follow
when they build their new company. They should, for example, research the market and its
rivals. Determine their primary rivals and the qualities of their target client. They may collect
feedback from potential customers through the phone or in-person interviews, internet
surveys, or focus groups. The budget should be changed often throughout the start-up period.
More money may be required than anticipated. Unpredictable occurrences frequently have an
impact on strategies and company models. Figures must be promptly altered. If additional
cash is required, banks are becoming less and less of a viable option. Increased equity can be
leveraged by public entities. The inflow of venture money is not simply negotiated.

The next section discusses the growth stage. If a firm has achieved significant
milestones and exceeded sales objectives during its early phase, it can begin to seek for
opportunities for expansion. If a company has built a customer base and become well-known
for a particular product or service, it may focus on ways to grow sales and operations. Their
firm may begin to produce more money, break even, become profitable, or improve
profitability throughout the growth period. The proprietor may have carried the majority of
the load of operating the firm throughout the first era. If their company expands, they may be
able to hire and train more people to assist with their daily tasks. They will have extra time to
focus on promoting the company and managing staff now that this team is in place. This may
be an excellent moment to work on creating a fund for emergencies, which can be used to
cover unforeseen expenses or to invest in possibilities.
 When a corporation is on the established point, it is where the company getting its
'life' begun. The firm has now evolved into a flourishing enterprise with a market presence
and devoted clients. Sales growth is slow, but controllable. The business world has grown
more routine. This is when the firm's foundation is laid and the vision or concept upon which
the company is founded becomes a reality. The marketplace is harsh and competitive during
this stage. Owners should consider the big picture. They should be mindful that concerns like
as the economy, rivals, or changing client preferences can easily derail their efforts. A firmly
established life cycle organization prioritizes growth and productivity. They will require
improved business strategies, as well as automation and outsourcing to increase efficiency, to
compete in a mature sector.

This stage in the Expansion life cycle occurs when a corporation advances beyond
just producing a profit to developing a company. This might involve increasing the number of
products or services supplied by the firm, adding new personnel, and geographically
extending the target market. This phase of the life cycle is characterised by a new period of
expansion of the market and distribution channels. This phase is typically chosen by business
owners in order to enhance market share and explore new revenue and profit opportunities.
Enhance the present business into new markets and customer types throughout this phase by
bringing new goods or services to the marketplace. A seed phase or start-up stage firm must
be planned and studied before expanding into new markets. Companies that complement
current skills and abilities should be prioritized. Getting involved with unrelated enterprises
may be hazardous. They must introduce new goods or services into current markets or extend
existing operations into new areas and consumer segments.
 After several years of operation, a firm may mature to the point where it is more
stable and profitable. Businesses in their mature stage will experience diminishing sales,
profitability, and cash flow problems. The key issue is how long the firm can continue to
function with a negative cash flow. It is the time to return to the growing stage or to the final
life cycle stage which is the exit. This is the third stage of a company's life cycle. When they
originally launched their business, they may have accepted a low-paying job. As an owner,
they are likely to begin receiving a regular income from the company at this point. Mature
firms ought to have an established brand and consistent or rising customer base, allowing
them to expand their line of goods into new or existing markets. An owner may now delegate
routine duties to their staff while they focus on goals for the future.

The exit stage is a fantastic chance for a company to profit from all of its hard work
over the years. It might also mean the end of the firm. Selling a firm necessitates a credible
appraisal. The obstacles that the organization may encounter during this period include
dealing with the financial and psychological consequences of a business loss. A firm should
seek expert advice on their business at this point. Examine their company's operations,
management, and competitive challenges to discover how they may increase their value to a
buyer.

Therefore, in order to gain the full advantages of change, the company's owner must
devise a plan for each stage of its life cycle. With proper planning and procedures in place to
adapt at each stage of the company life cycle, they will be able to sustain and expand their
firm while embracing new possibilities and opportunities as they occur.