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Life Cycle of a Business

Research papers on the life cycle of a business are written on the three stages of the business life cycle. Business writers from Paper Masters custom write business projects for MBA or undergraduate level students.

The life cycle of a business consists of three stages:

  1. Growth
  2. Maturation
  3. Decline

At each of these stages, specific characteristics can be identified that provide the data necessary to categorize a business into one of these stages.  In the growth cycle, businesses are investing much of their revenue into the expansion of the business. Focus of the company is on how to identify new ways of generating revenue, and spending for these changes are encouraged.  Generally, this stage is appropriate for new companies, but may also be true of existing companies who are focusing on new ways of doing business and generating revenue. At this point in the life cycle, income is sporadic and inconsistent as the company makes changes and must rely on advertising, etc. to generate customers and new sources of income.

Life Cycle of a Business

The Business Life Cycle

The maturation stage of the business life cycle is characterized by a consistent flow of income.  At this stage, the product and services provided by a company have been established and accepted by consumers, providing revenue to the company to support its function.  There is less emphasis at this stage on generating new sources of income. In general, spending at this stage is focused on the maintenance of product and service provisions.  As a rule, the most revenue in a company’s life cycle is generated at this stage.

The Declining Business Life Cycle

The decline stage of the life cycle is marked by a decrease in revenue as generated by a mature product and/or service that a company provides.  At this stage in the life cycle, a business begins to lose the cushion of income that is seen in the maturation stage.  As this occurs, spending must again shift to cover losses, and decisions must be made as to how a company can continue to function with less revenue to spend on the production of goods and services.  If a business is unable to maintain their production of goods and services with the revenue that is generated by their sale and the business does not move into another growth cycle that will rejuvenate the company and move towards increased revenue, the company is likely to go out of business.

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