Discuss the stages of business life cycles

I. Idea Generation stage

This is the preliminary stage for the business. Here, the entrepreneur does a lot of
ground work to access the viability of the venture he is about to get into. At this
stage, the to come up with the business idea. Several needs may require to be
fulfilled but the entrepreneur may not meet all of them; it becomes necessary at this
stage to select the most viable business idea from the many available. This stage
may involve creativity and assessment of various ideas. It is at this stage that an
entrepreneur decides on the business mission, scope and direction. This mean, an
entrepreneur gives the prospective business a purpose. Some purposes may include
provision services and to make profit He will carry out due diligence to ensure he has
taken all important factors into Recount setting off the business. He will incur
expenses to execute some of these important activities. He may for instance require
the services of a legal representative to acquire land. He may also hire the services
of a surveyor if he wants to build his own premise, if he will hire personnel to assist
in running the business, he should ensure that he has sufficient funds need to get a
loan to do this.
II. Start - up stage
Activities at the start up stage may involve preparation of a formal business plan,
registration of the business, sourcing capital, recruiting staff and designing also
launch the product and sign up with distributors or dealers. At this stage, the
entrepreneur has already set the business up. The business is operational despite
the setbacks that befall all businesses that he may need to make adjustments in
order to survive. He may see the need to insure the property in case he hadn't He
may also realize that he does not need an extra staff hence he may cut down on
that, sales may be slow in picking up, so he may decide to come up with new
marketing strategies, He may see the need to have proper records for tax purposes.
III. Growth stage
At the growth stage of business common experiences may include:
- Increased sales and profits
- Wider market coverage in terms of geographical regions.
- A growing number of employees
- Variety of products/services
- Increased competition
- Need for additional expenditure
During this phase, the business will experience rapid growth as customers’ needs
become the main focus for the entrepreneur. It is at this stage that he will realize
there is need to gain a competitive edge in order to make more sales. The
entrepreneur at this stage may think seriously about automating his operations,
hiring professionals like accountants, perhaps even expanding the business. The
signs that these requirements are necessary will be felt by the growing need to meet
the increasing and dynamic needs of the customer

IV. Stabilization Stage
- At this stage, the business sales and profits stagnate. The business may also
experience; intensified competition.
- There is also market saturation by similar (“look like”) products
- Consumers’ indifference to the-product
- Sales may decline and consequently profit may decline.
This is the phase that determines whether the business has managed to meet its
long term objectives and a period to assess how successful the short term objectives
have been met. At this stage, the entrepreneur is more concerned about corporate
governance, issues and how this impacts on customer needs. He will also be
concerned with the management of the business in various departments such as
finance, sales and marketing. The entrepreneur will have his sights on a higher level
of competition with other, firms that belong to a higher circle, hence he see the
need of turning the business into a public limited company in order to compete as
such levels. This model can be applied to the growth or otherwise of a firm. The
entrepreneur thus needs to ensure that the business opportunity he has before him
has a road map charted in advance and based on due diligence. This does not mean
that every firm will follow the above model. The entrepreneur needs to be aware of
the possible outcomes.
V. Innovation Stage
Organizations that fail to innovate at stabilization stage are likely to decline. To
ensure the firm comes back to growth, the entrepreneur is required to re- look at
the ways business has been conducted. The aim is to undertake activities differently
and rescue the firm from decline. It is expected that innovative strategies would
ensure accelerated growth.
Among innovative attempts include:
? Change of management the aim is to bring new-and better ideas that will ensure the
firm is back to the growth path.
- Re- package the product/ service .This would ensure the market gets the impression of
a new product that is modified and. better than the former. It is also a strategy of
winning customers back from competitors.
- Change the technology. The aim of new technology is to ensure efficiency in production
and enhance customer service. It is important that the entrepreneur chooses a
technology that matches the type of business he is doing
- New distribution methods. The firm may also design new distribution methods.
Changing the distribution strategy would ensure customers access their products at the
convenient places especially providing personalized distributions to customers or even
ensuring 24 hour service to customers
- Advertise and promote differently. The firm may decide go to different regions and
promote its product or services.

VI). Decline Stage
This stage is not in the normal plan of business. The entrepreneur does not foresee business
declining at the start- up stage. Some of the experiences at this stage include:-
- Drastic fall in sales and profits this is as a result of customers moving to competitors
and in large numbers. It is also a result of consistent expenditure against limited income.
- Consumer indifference to the product/ service this means consumers no longer prefer
the product to competing brands. The entrepreneur may experience huge stocks of
unsold product.
- Inability to meet bills/ debts as they fall due this arises from persistent low income or
losses against increased expenditure.
- Key management staffs leave the organizations. This may result-from the
organizations inability to remunerate top managers or provide them with adequate
facilities for their performance of various tasks.

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hydah kerubo answered the question on March 30, 2018 at 19:52