7 stages of the business life cycle
Seed & Development
Market Acceptance
- Problem
- Solution
- Marketing Opportunity
- Competitive Analysis
- Business Model
- Sustainability of product/widget/service
- Traction of growth
Pursue one niche, at first
Match the business opportunity with your skill, Experience & Passion
Direct time & Resources to this niche
Develop ownership structure
Find professional advisors
Development of Business plan
Find initial funding
Business exists in legal terms
Establish system for accounting
Startup
The business exists in legal terms. Products and services are available, and you have new customers.
- Products and/or services established
- You have your first customers
- Establish customer base
- Track market presence
- Conserve and track cash flow
Growth
Marketing strategies and sales have made an impact on the business.
- Revenues & Customers increasing
- Many new opportunities and issues
- Competition looming
- Effective management required
- May need to revise business plan
- Must be able to train and or delegate some responsibilities to other customers a reason to do business with you.
Expansion
New periods of growth into new markets. Look for opportunities to gain a stronger market share.
- Grow into new markets and distribution channels
- Gain a larger market share
- Find new revenue and profit opportunities
- Add new products or services to existing markets
- Or expand existing business into new markets
- Do not move into unrelated areas of you market niche
Maturity
The business has reached its highest peak as it is and will require aggressive strategies to stay afloat.
- Sales begin to slowly decrease
- Profit margins are small
- Cash flow stays relatively stagnant
- Reposition the business
- Refresh growth in the market
Decline
All things financial have decreased and acceptance of failure to extend the business life cycle by not adapting to the changing business environment.
- Loss of sales, and profits
- Negative cash flow
- Search for new business ventures & opportunities
- Cut Costs
- Find ways to sustain cash flow
- Look for new funding sources
- Contemplation of the exit phase
Exit
It’s inevitable that the business will not bounce back to earlier stage of growth. This is the opportunity for the owner to cash-out on their years of hard work.
- Determine if you want to sell the business or close the business down
- Get a proper valuation of the business
- Look for the things that would make the business worth more to a buyer.
- Establish buy-sell agreements
- Set up a business transition plan