What Are the 5 Stages of the Business Life Cycle

What Are the 5 Stages of the Business Life Cycle

Read Time: 3 Minutes


14 Nov 2019


Updated On: 28th June 2023

What is the Business Life Cycle?

The business life cycle is the progression of a business over its lifetime and is split into 5 key phases: seed and development, startup, growth and establishment, expansion and maturity/exit strategy. 

The moment you start a business, you join the life cycle. It helps to highlight some of the challenges or obstacles business owners face at each point in their business’s life. You’ll face a different kind of challenge at each phase, which means, as you probably already know, you have to be flexible to find success with your start-up business. 

With 90% of startup failures put down to self-destruction (Startup Genome Report), a lack of preparedness for the future of your business might be the thing to break you.

In this blog, we’ll be looking at each business life cycle stage in-depth to help you figure out which stage you’re in and what obstacles are on the horizon – because the more you know, the more your business is likely to succeed!


What Are the 5 Stages of the Business Life Cycle?

There are loads of different stages and names for these stages that are used when describing the business life cycle. To make it easier for you, we’ve used the most popular ones.

  1. Seed and Development Stage
    Imagine a tiny little seed – that’s your business idea. Plant it in the ground, give it everything it needs to flourish, water, sunshine, and voila – a successful business. …Except it’s not always quite so simple, is it?

    This stage is where your business is being born, planned, and early operations are just about starting to take place. This is usually the most difficult stage of starting a business because there are lots of things that can go wrong.

    The key to surviving the obstacles in the seed and development stage is to make sure you’ve got a solid business plan to get your startup off the ground! 

  2. Startup Stage
    This stage can be summed up in one word: tweak. At this point, nothing is set and stone – welcome to your trial and error period. 

    It’s also the time to fail, and not feel bad about failing. Take Thomas Edison’s famous quote “I have now failed. I’ve just found 10,000 ways that won’t work” for example. You’ll spend a lot of time in this stage trying new things and ironing out the creases, focusing on your business development.

    One of the most important things to keep in mind for success is the so-often-forgotten-about feedback from people who’ve used or tested your business. Use this to shape your research and development plans and you can’t go far wrong!

  3. Growth and Establishment Stage
    When you reach the establishment and growth stage of the business life cycle, you’ll be generating consistent sales growth and reaching new customers to grow your business. 

    This can be a really exciting time for your business, but there’s still a lot of hard work involved to manage all this new business you’re seeing. You might even find yourself working more nights and weekends than you were before. 

    At this point, it’s time to start hiring your first employees and learning how to delegate some of the smaller tasks to avoid founder burnout during times of rapid growth.

  4. Expansion Stage
    At this stage, you know what’s what in your industry and your business is running like a well-oiled machine. You’ve got a solid business model, internal systems are running smoothly, you have enough staff to keep everything going at top speed and you’ve made a name for yourself in the industry as a whole. 

    This is the peak of your business’s life cycle and sustaining this momentum will be your biggest challenge going forward.

  5. Maturity/Exit Strategy
    The final stage of the business life cycle is the maturity stage. At this point, everything just kind of grinds to a halt. 

    You’re seeing stable results in terms of profits, but new customer numbers are dwindling and you can’t remember the last time you launched a new product or service. Across your workforce, everyone is just settling for the status quo, nothing is being challenged and feedback isn’t being reflected upon.

    At this point you have two options: make some drastic changes and propel your business into relevancy again, or plan an exit strategy.

    An exit strategy is your way of selling the business or selling your ownership in the business to investors or another company. This strategic planning gives you a way to reduce your stake in the business and make a profit.


Why Do You Need to Know the Stages of the Business Lifecycle?

Understanding where your business sits in the business life cycle allows you to anticipate some of the challenges you’ll face depending on how advanced you are, from a small business right up to a huge powerhouse company.

This means that when problems do arise, you’re less likely to make a sudden, knee-jerk reaction that could end up being a fatal mistake for your business. 

Find out some of the funny struggles we encountered in our business’s early stages here for some advice from our co-founders on overcoming any obstacles here.


How to Maintain Growth and Expansion for Your Business

If you were reading the maturity stage of this life cycle thinking, “Wow that sounds a lot like what my business is going through”, don’t worry – many of the businesses who are in the maturity stages don’t actually know that they are.

By identifying this, it can only be a positive thing. If you do see a future for and are looking to maintain the expansion of your business, there’s plenty you can do to kickstart your innovative renewal! 

First things first, you’ll need to identify what it is that’s holding your business back – is it technology, the need for your specific services or products, or something else entirely? Whether it’s worth tweaking some of your product offerings, taking your business online or investing in a new marketing campaign, it’s well worth trying different methods to help get your business its spark back.


Whatever stage of the business life cycle your business is at, make sure you’re making the most of your marketing with print. From flyers to spread the word about your startup, to direct mail for attracting new customers and growing your business, check out our full range of products here.



About the Author

Hi, I’m Ally and I’m instantprint’s PR Lead. I enjoy writing content to help small businesses succeed and inspire them to get creative with their print marketing.