Explain the different phases of the business life cycle. Discuss the challenges (2) presented at each stage of the cycle, including reasons why a business may discontinue operating.
1. Executive Summary
The four different phases of the business lifecycle are the establishment phase, growth stage, maturity stage and post-maturity phase. There are challenges that each each of these stages is faced which may include challenges with goals, sales and profits. Businesses may discontinue operating due to the height of the challenges the business is faced with.
2. Establishment Phase
The establishment phase of the business life cycle is the first stage of the business. The aim of this stage is to get the business to have a solid foundation for the future which requires enough sales to be generated to bring in much needed income. There are a number of challenges that need to be responded to during the establishment phase. Making profits for the business is a challenge during its establishment phase. As the business is being established and just beginning it is hard for the business to gain a large income of profits as it is vulnerable. Income is usually slow to begin with and occasionally businesses have a loss of money as they are setting up the foundation for the business in the future. Gaining profits towards the owner/owners is difficult as sometimes when a business is in its establishment phase, all of the profits are put back into the business to ensure its