June 1, 2021

The Business Life Cycle

The Business Life Cycle

What stage of the business life cycle is your company in?

Take a look at the chart above which gives an overview of the various stages. Although the length of time in business can be a major factor it is not the only thing that determines this. What role the owner plays in the business is usually more influential.

As an owner it is very important to understand what your business needs at any given time and what role you should play. Here are a few key points to consider for each of the various phases:

Launch: The riskiest place of all. The owner must generate sales to succeed. You wear all of the hats. Whatever it takes to drive sales. Systems and processes may be nonexistent. 

Growth: Sales increase, profits increase, problems get bigger. Now is the time to focus on customer service, systems, processes and training. Owners begin to realize that they need to shift their focus from the short term to the long term. You must learn how to delegate tasks and manage your time.

Shake-Out: Market pressure, competition, staff turnover, and other distractions force the owner to make tough decisions. Long term focus becomes very important. During this phase owners tend to do one of the following: 1.) Retreat and scale down operations due to frustrations, or 2.) Hire key people to help forge the future of the company.   

Maturity: Owners that make it here are a rare breed. They have the people, the systems, and the culture to maintain a thriving business. They have to be careful not to become complacent. Now is the time to embrace creativity and continually refresh the company's products or services. This is not a time to let yourself get comfortable.

Decline: Creativity wanes. New ideas are not welcomed. The company dies a slow death. 

In order to avoid decline and sustain the maturity phase, business owners must delegate and encourage the growth of others. Staying fresh and relevant in the marketplace should be the main focus of the entire team. Training and encouraging the personal and professional growth of your people is the most important task of a mature and successful business owner.


I am passionate about helping fellow builders and remodelers create the business they've always wanted. If there is something about your business you would like to discuss or share with me please let me know.

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Some of the information above was obtained from the Corporate Finance Institute