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The 4 Stages of The Business Life Cycle

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If you’re new to running a business, you might not know what the business life cycle is.

The business life cycle is made up of four stages that every business goes through as time progresses. These stages are Launch, Growth, Maturity and Decline/Renewal.

The stages are not unique to one type of business; all businesses go through them, so let’s look at what they mean.

Step 1 - Launch

Typically, each business begins by launching new products or services. While launching, sales are generally slow as consumers are finding and beginning to trust the business. However, sales should increase over time.

It’s not unusual for businesses to lose money at this stage as sales are low and they have start-up costs to contend with. These start-up costs can include inventory, office space, equipment, taxes and employee payroll.

As the business is launching, it may need to factor in marketing costs before making any sales; this can be tricky as they have no income and will need to rely on investment.

Step 2 - Growth

The business now has established relationships with its consumers, and they should be known for a specific product or service.

Because of increased sales, the business should now be operating past the break-even point and beginning to turn a profit.

This increase in profit allows for more inward reflection on the business and improving processes and teams. In turn, this can lead to more stable growth and the ability to identify and overcome factors that are holding the business back.

Step 3 - Maturity

Mature businesses have strong brand recognition and steady profit. Both of these can allow the business to branch out and expand product lines into new or existing markets. Adapting in this way enables the business to reposition itself within the constantly changing market.

Business owners with mature businesses will need to stay on the lookout for signs they need to change the business before deciding whether to cash out or reinvest to push the business forward.

Step 4 - Decline / Renewal

Businesses that have seen a decline in their revenue for the previous three quarters have probably been in the decline stage for the past two years.

This is a clear sign that business owners must look at ways to innovate and push the business forward.

If a business owner is only focused on what they can take out of the business before they retire and isn’t looking at ways to push forward, then the business is in decline.

If this is the stage you’ve found yourself in, you need to decide whether you want to continue seeing the business decline, or whether you want to invest in the business and push it towards renewal.

Strong business owners will invest in the business as soon as they notice the markets changing, rather than waiting for signs that the business is in decline.


Every business is somewhere in these four stages; what happens next for your business will depend on you as a business owner.

If you want to push the business forward, you may have to invest in the business or seek external investors.

But whatever the end goal for the business is, it’s always crucial to seek professional advice and gain insights into what needs to happen next.

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