Stages of the Business Lifecycle

Whether you are a new business owner or have run your small business for years, it is wise to familiarize yourself with the five cycles of change: startup, growth, maturity, transition and succession. This applies to small retail shops and online business alike, as every type of business may go through several or all of these stages.

Why do you want to start your own business? Maybe your family needs additional income or you’re unfulfilled by your current job and want to work for yourself. Whether it’s out of necessity or desire, you need to evaluate your skills, expertise and the level of risk you want to take on before starting a new venture. This also applies to people who may feel obligated to take over a family business.

According to the U.S. Bureau of Labor Statistics, only half of small businesses survive past five years. As one would expect, after the first few relatively challenging years, businesses tend to become more successful and survival rates improve. These statistics hold true across different industries, including manufacturing, retail trade, food service, hotel and construction.

As a prospective business owner, you should familiarize yourself with what to expect. And remember, no matter the stage, it’s important to take stock of how your company is performing and do everything in your power to stay competitive and successful. Each stage brings new challenges that owners need to address to protect their businesses, and new opportunities to grow and improve.