Every single thing you do in life begins with some decision you make – a choice. And that applies to business too. Every company goes through different steps or phases, often called a business lifecycle. It makes or breaks your business! But the key is to realize which stage you’re at, and where to go next. It makes a huge difference in realizing your business’s potential and work towards its evolution. That’s all that matters in business – evolution. Business is a harsh industry, so you have to be on top of it all to stay in the game. Once you join the business lifecycle, it’s either uphill or downhill from there! But, read this comprehensive guide and, it will be uphill for you!
This business lifecycle guide has every step you will ever encounter along the business adventure from the lightbulb moment to a successful startup. Every step you take further into the business lifecycle has certain obstacles. But don’t worry! We got you. This guide will help you accept and overcome these obstacles with ease. You will learn to adapt these obstacles to your business strategies and come up with a flexible well-thought-of plan!
Whenever something goes wrong, it’s due to a bad decision – a false choice. It might not always cause catastrophic results in real life. BUT, in the business lifecycle, it might just mean a one-way ticket out of the whole business lifecycle! And no one wants that! For this reason, you should understand where you stand in the business lifecycle so you’d have a pretty good headstart. Or even if you’re still at the idea-phase.
So, let us dive deep into the core of the business lifecycle and begin with the walkthrough of this guide step-by-step!
The Business Lifecyle Stages
Rome wasn’t built in a day! The same thing applies to business. It takes years to come up with the perfect air-tight business plan, get your business up and running and reach success. It doesn’t just happen. There’s a whole process behind it. A business lifecycle has a myriad of interconnected points that create a well-designed business web. It might seem overwhelming at first, but with this guide, it will be smooth-sailing all the way.
So, we already mentioned that there are five stages. It’s right there in the title! Anyways, there are five stages in a business lifecycle: the development, start-up, growth, expansion and maturity. But you have to understand that each step comes with several obstacles that we will help you overcome with ease. Therefore, we provided thorough details of every stage of the business lifecycle journey to help you along the way!
Shall we begin?
The Development Stage – Stage 1 of the Business Cycle
This is the very first inkling of the business lifecycle. It’s the light-bulb moment – the business version of a nova Vida. The development stage is the part right before you actually have a startup setup. You’ve got this idea, and you’re all excited and ready to dive in! But where should you start?
The development stage is key to the successful and long business lifecycle. It paves the way for your whole business journey and sets the tone for the business lifecycle. It’s so crucial that it could be the deal-breaker in your success, which is why you should put in a lot of thought and effort into this step. Talk to your friends, family, or people who are already IN the industry. Learn about this potential business idea, and check out the market. And, most importantly, you got to think about money.
Let’s be honest. Any profitable business, ANY business actually, needs proper funding. You have to have a stable financial foundation to keep your business propped up and going.
So the question here is: is it worth it? If the answer is yes, keep reading. If it’s no, that’s fine! Go back to the lab and brainstorm again. The world is full of ideas, just waiting to be discovered. Don’t give up. The business lifecycle welcomes all.
But the development stage of the business lifecycle doesn’t stop here. It takes a few more steps to get straight to the actual action. The development stage includes planning, key performance indicators (KPIs), budgeting, choosing clientele, RESEARCH, and service/product flexibility. Yes, the development stage is a bundle, but it ensures that you have a solid start in your business lifecycle.
A. Planning the Business Lifecycle!
Here’s the scenario. You’re walking, but you have no idea where you’re going or how to get there. So, does that mean that you’re going anywhere? You’re standing in place or running around in circles. But, definitely not going anywhere. That’s how it is when you don’t create a good plan. Plans help make things easier – much more manageable. And that’s a huge factor in any successful business lifecycle. And there are different plans that you have to look into: a business plan, a marketing plan, financial, sales and an internal standard operating procedure.
Don’t panic. We’ll go into all the details you’ll need!
1. The Business Plan
Don’t freak out. You can totally write a business plan, and it’s not that difficult. And, we know for sure that it will be super easy after you read this little summary! First-things-first, you’ve got to keep it short. No one wants to read a lengthy business plan. It has to be quick and straight to the point. You want people to read it. Also, keep in mind that odds are you are going to go over this business plan countless times. If your business plan is too long, it’ll make editing or modifying it a nightmare!
The business plan should answer these questions: Who is your target audience, market and competition? How are you going to execute the business plan? And how will you finance it? This means sales forecast, cash flow statement, income statement and balance sheet.
Finally, you write an executive summary. This introduces your company, explains who you are and what you do, and summarizes you’re plan as a whole. An executive summary is often written at the end, but place it at the top of your business plan.
Well, it’ll make whoever reading it feel much better. You do not want someone to read your whole business plan and feel bored – placing it at the beginning makes the person reading it feel more respected. We need respect in any business lifecycle.
2. The Marketing Plan
The roadmap to business lifecycle success! The key is a Unique Selling Proposition. It’s what makes your business stand out. This is something that describes your company or product and shows just how different it is. What makes it so unique? Like a slogan. The most successful companies have the best unique selling propositions! So, you have to get together a pretty good unique selling proposition to become one of the greatest.
After that, you have to set your prices straight. Yes, now! You have to put a given bar for your price range. This is to determine your set brand. Are you a luxury brand? Or do you want your product to be accessible to all? You should include all this in your marketing plan for a decent headstart for your business lifecycle.
Furthermore, beyond the price point, you have to decide on distribution. How will you sell your product? Will they be sold online or through retailers? You have to make the decision beforehand so you can ensure that you face no bumps along the business lifecycle journey. After you decide on the price and distribution, you have to think of marketing.
Marketing your product is critical nowadays, more specifically, online digital marketing. You have to have a thorough marketing plan and use different strategies to apply it. Turn to keyword and search engine optimization or paid online advertising. Or, if you manage to build a robust social platform presence, you can use the social media strategy – which is by far the most effective strategy nowadays!
3. Financial Strategy
From the title, this is obviously the document where you set out your financial plans – in detail. In this document, you’ve got to set your goals towards having total financial freedom. You have to aspire towards removing all forms of liabilities that present themselves as debts. A successful business lifecycle cannot have loose strings pulling you down. So, sit down and think. Where are you at, money-wise, right now? And where do you aim to be at some point in your business lifecycle?
What to include in your financial plan?
A financial plan includes your current net worth – take all the money that you have at the moment, total the amount, and subtract all your debts. Your debts could look like a student or personal loans or credit card balances. After that, you have your net worth!
Next, you have to estimate your monthly budget. You can’t just begin any business without specifying how much you can spend per month. Take all your expected sources of income per month and then dedicate a part of it for your expenses and savings. It’s as simple as that. This also includes the debt payoff plan since you will commit a certain amount of money to pay off your debts. Pick the debt that haunts you most, and work on paying it off! You’ll have a massive load off your back.
It’s critical to mention at this point that you always have to have an emergency fund, just in case you ever need it. This is like a safety net that ensures you still have enough money to cover whatever surprising expenses that come your way!
The last two factors to include in your financial plan are the retirements and estate plans. Yes, you got to plan your retirement. We know it seems too much to think so far ahead, but a reliable business lifecycle includes planning your retirement! You have to decide how much money you want to leave out for your retirement, and place a savings goal. It’s never too soon to plan out your retirement.
An estate plan, on the other hand, is a bit more ominous. It is a plan that explains what happens to your estate after you die! Here is where you decide on life insurance and writing your own will in advance. The development stage of the business lifecycle is all about being prepared for everything that could ever come by!
4. Sales Plan
A sales plan, on the outsides, seems very similar to a business plan. But, the difference is that a sales plan focuses more on sales strategy. Basically, The sales plan explains everything you decided on doing in your business plan. In other words, how are you going to reach these goals?
A sales plan often includes:
.Targetted market and audience
.Plans and strategies
.Pricing and resources
.Promotions and budgeting
.The state of the market
A sales plan is completely based on real data. Assess where you are at the moment and create an honest and ambitious sales plan.
5. Standard Operating Procedure
This is a document that explains exactly how your team members will work. It’s the guide to make sure that your business lifecycle is well-balanced and that every part of the team in onboard! It could take the form of a step-by-step format, flowchart or a hierarchical format. Whatever suits your company best. A standard operating procedure document is essential because it creates a system for all the internal processes in the company and makes sure that everyone involved knows how things work! It ensures that your business lifecycle moves along as one single cohesive mass that is impenetrable no matter what obstacle it faces!
Basically, an SOP ensures proper onboarding/training, organization and consistency in your company. It’s better to know that everything is understood and agreed upon from the start.
B. Key Performance Indicators
Key performance indicators (KPIs) are the set of measures that estimate your company’s overall performance. Basically, KPIs are the milestones that track your progress. They follow your achievements in terms of finances, strategies and competition. Your KPIs have to be S.M.A.R.T (Specific, Measurable, Achievable, Relevant, and Time-based). They are the indicators that tell if your company is doing well!
They could come in the form of a net profit, or even traffic. It depends on what your company sees as a convincing performance. Key performance indicators come in different shapes and are directly linked to a firm’s strategic goals. The bottom line is that KPIs are useful tools that work together to provide insight into how well (or how bad) your business is doing! Therefore, it also shows how well your business lifecycle is going too!
We already kind of went over this part of planning in the development stage of the business lifecycle. The budgeting can be a part of the financial plan, with specific attention to how you control the money taken outside the company – as in expenses. Budgeting makes sure you always have enough money to spend while not going over your budget every month. It also makes sure you have enough money left to your savings account.
Always have a set budget that you never, under any circumstances, go over. This is the safety net that ensures you never fall out of the business lifecycle. If you go over your budget, you risk breaking your whole financial stability and thus lose your position in the business lifecycle. Your journey would most probably end there. So, take risks but smart well-calculated risks!
D. Choose the Right Clientele
The main reason anyone ever starts a business is to sell – whatever product or service you provide. But, the more significant and more critical factor in any business is the clientele. There is no business without an audience. Therefore, there is no business lifecycle at all. The whole business lifecycle would shrivel and die without an existing base of persona, the customers, willing to buy your product/service.
Of course, not every single person you meet will buy your product, which is why you have to choose the right clientele and build your business around their need. Your business should have the sole purpose of providing the needs of your specific clientele group.
Thus, in this part of the development stage of the business lifecycle, you have to choose who you are selling your products/services to!
E. Research, Research, Research!
We cannot stress enough how important research is in any step of the business lifecycle. You’ve got to collect data regarding every single part of your business – leave no detail left behind! You have to research the market you plan on taking part in; you research the product or service you intend on selling and, most importantly, you have to check out your competitors – not in a crazy stalker kind of way! Be professional and learn from your competitor’s strengths and weaknesses. You have to scope out those who have been in the game longer – the giants of the industry. The odds are, you decided to join an industry already in existence! Therefore, it already has its masters and OGs!
If you look up certain firms policies, strategies, marketing tactics, product/services management and history; you will learn so much!
F. Product/Service Flexibility
The world is moving, evolving, and developing with every waking moment! Everything is changing, and you have to be up-to-date with everything going on. You have to stay on the tracks of development. Every day we encounter breakthroughs in the digital revolution. Therefore, your priority in any business lifecycle should be product/service flexibility. You should be able to accommodate your product or service to any to update or change in the market. Product development is a crucial step to make sure your business lifecycle is long and thriving. You should be able, at any point, to introduce a new or modified product or service within your company.
That is what keeps you going and keeps yours on top!
Stage 2 of the Business Lifecycle – The Start-up
So, we’re done planning. We meticulously studied every aspect of our idea and are ready to launch our startup. This is the most dangerous and exciting stage of the business lifecycle. It’s the stage that sets the tone for the rest of your business lifecycle – it sets its length!
It’s a messy and confusing phase where you have to test your product and its feedback with the customers. You go back and forth between changing and adapting to the market. This is a phase for self-learning. You learn from the market and keep trying until you find the perfect balance. More importantly, you know patience. A start-up takes time to launch, and you cannot expect immediate success. The main focus should be retaining customers to lay out the foundations of your business and your business lifecycle. Take the feedback of your customers; if they’re happy, they become sustainable cashflow! Satisfied customers turn to ambassadors and, in turn, become referrals who bring in even more customers. They also become your tribe! Happy customers back you up and rely on you. And client trust is ultimately the fastest way to gain a strong base for a long business lifecycle.
If you have negative feedback, it’s lovely! The start-up phase is meant for this! You go back to the drawing board, make your modifications, and you try again. This all relies on the product/service flexibility we mentioned before. It’s all applied in this phase.
Also, keep in mind that you probably won’t be making crazy money in this phase. But it’s okay. It will come in time. This phase is there to help you figure out where you are and what you need to keep moving forward!
The start-up phase works to adapt in terms of revenue and expense. It’s no longer just a business plan, and it’s in action! You have to see it through. This helps find the right accounting system. So learn to LEAD your team, take the rein and drive your business forward!
Finally, at the end of this phase, you must think of the next stage: growth. Are you ready to begin with the growth phase? Is your company strong enough and stable enough to move on to the next step? If not, then you have to go back to planning and to adapt – learn from what went wrong and come back stronger than ever.
You have to be flexible and open to all changes that come. Even if things don’t go as planned during this phase, it’s okay! You have to learn to adapt, or else the business lifecycle will see you unfit! So, take it easy!
Look at it Grow! – Stage 3 of the Business Lifecycle
You’ve passed the start-up phase! Congrats to you! You got through the hectic, crazy step of the business lifecycle, and things have settled down a bit. But you can’t relax just yet. The growth phase is when you reach a point where you and your clients fully understand where you are. Your product is reliable, and people love it! That’s great!
By now you probably have steady clients, less turnover, and you’ll worry less about making money. You’ll finally have your two feet planted firmly on the ground and in the world of business. The business lifecycle gives you a nod of respect if you’ve survived the start-up.
Now, you have to focus on building your teams and expanding your operations. Invest in your employees and help them evolve. Nurture your relationship with your clients and grow your customer base. This is the part where you might need to seek out external investments or build a debt profile. More people will be interested in investing in a growing company with potential. And you have to seize that! Don’t risk losing your financial stability at this point; you’ll lose it all. Go over your budget plans and financial statements. Make sure everything is going according to plan.
Not everyone is for the growth phase, but if your aspiring to become one of the greats, then keep on growing. Just because you started making some good revenue, doesn’t mean it stops there. Go over all your internal systems – do some maintenance where needed! Decide whether or not you want to stay hands-on or you want to hire some managers where required.
All these decisions should be in the growth phase. Growth and expansion might seem overwhelming, but it’s the best phase to see your company grow. You’ll have a giant of a structure built on stable foundations that’s ready to take on the business lifecycle and succeed!
This is the survival phase.
Business Lifecycle Stage 4 – Expansion
Wow! You’ve come so far! You got your business up and running, you got an army of employees working diligently towards the development of your firm, and you have great leaders guiding them along the way. Everything’s great! You have a respected name in the industry, and all’s well. So, what now? Well, the business lifecycle dictates that there’s more! At this point, you have to make another decision: Should you move towards further expansion, or should you stop here?
At this point, you probably make pretty decent revenue, which is impressive! But, expansion could mean a more extensive customer base and, of course, more payment. Now, it’s not just about the cash, but that’s a pretty nice plus. The expansion includes going over your current managers and delegates. You have to make sure those who speak in your name are doing their jobs right and set in the right places. Check if you have the right amount of revenue for further growth, or need more investments.
Maybe you need to invest more in your firm for further development internally. Go over your internal systems and maintain them as needed.
And, at this point, you have to think about scaling. The expansion phase often includes creating different headquarters apart from the original base. This takes into consideration compliance and governance. You have to make sure that everything is legal and in check – just as you would with a whole new start-up. But you wouldn’t start from scratch. You’ve got all the knowledge and resources. Do your proper research on the modern market and analyze your product or service accordingly. Don’t get too comfortable with the business lifecycle, always stay in line and follow the rules. Don’t be afraid to branch out! Maybe go abroad! Just make sure you study the idea and see if it is possible in every aspect.
The Final Stage of the Business Lifecycle – Stage 5
The Maturity Stage
Your business is a mature one now – no longer the young, immature start-up! You have loyal employees and sustainable profit growth. It’s everything you could ask from a business lifecycle. At this point, your company is very attractive for possible mergers or investors, but you probably also reached a specific financial relief. All your profits became sustainable income and are averaging well. So, what now? What does the business lifecycle say now?
Right about here, you have to start to think about the probability of further expanding or maybe keep your business sustained as it is. Perhaps even look into an exit strategy. Although exiting requires a massive analysis of the firm’s position, internal systems, finances and customer relationships. Also, the delegate managers must receive all the required information to keep things moving!
In the maturity stage of the business lifecycle, taking a risk isn’t as scary anymore. You’ve already been through a lot as it is, and you know your way around the business lifecycle. So, at this stage, you have to think of what’s most suitable for yourself and your company.
End of the Business Lifecycle
So, that’s it for the five stages of the business lifecycle. This guide has everything you might ever need to venture through the steps of the business lifecycle. You know now what to expect and how to deal with any and every obstacle that comes your way! Always make sure to have strong entity management and the capability to keep a flexible and open mind every step you take along the course of this journey!