Business development, commonly abbreviated as BD, is frequently defined as the relationships, customers, and markets that are utilized for long term organizational value formation.
Any business owner can attest to the fact that starting business operations and developing them is not an easy task. One way to increase the potential of creating and maintaining a successful business is to understand the 4 key stages of BD, also frequently referred to as the business life cycle or business lifecycle.
Whether someone is a new business owner or an experienced business development professional, the business life cycle stages are essential knowledge. Each business lifecycle stage contains specific challenges that often necessitate innovative solutions.
However, by identifying where in the business life cycle a corporation is, developing a strategy for growing business profitability and success is much easier to accomplish. The 4 stages of the business lifecycle include-
The startup stage of the business lifecycle is widely recognized as the most difficult stage of BD. The startup phase occurs when a new business launches, when a business idea is brought to life.
During the startup phase of BD, a business owner is likely performing a wide variety of activities simultaneously. Activities commonly undertaken by a business owner during this early stage of BD include-
New markets and customer base establishment
Employee hiring and onboarding
Employee scheduling and task delegation
Cash flow considerations
There are many reasons that corporations fail during the start stage of BD ranging from an unrealistic business model to market share difficulties. In order for the startup stage to be successful, business owners should be flexible and learn from their mistakes as well as from their accomplishments.
Fact-: Only 80% of startups that have employees on staff are still in business after their first year of operation.
The business growth phase generally occurs within or after the first few years a company is in operation. In the growth stage of BD, the formerly established business plan begins to generate tangible profits.
At this point in the business life cycle, a growing business may have both a solid customer base and market share presence. Another significant observation that is frequently made during the growth phase is a marked decrease in employee turnover rates.
Although it is much too easy for business owners to get swept away in the excitement of business growth it is essential to keep objectives prioritized. As such, the growth stage is an excellent opportunity to perform the following activities-
Cash flow analysis
Business model or business plan adjustments
Sales and demand forecasts
Exploration of business growth opportunities
During the maturity stage of the business life cycle, it is not uncommon for business owners to feel very confident. In the maturity stage, both the customer base and market share presence are typically exemplary.
Control over the customer base and a solid market share presence makes it highly unlikely that a new business will immediately threaten the success of a mature business. Beyond a decrease in risk from the competition, the maturity stage is commonly accompanied by a steady cash flow and rising employee retention rates.
However, there are still risks that companies face during the maturity stage. Stagnation and a lack of continual growth are widely considered as the greatest threat to businesses in the maturity stage.
Instead of being stagnant, the maturity stage is a great opportunity for business growth and expansion. Exploring new markets or developing new products for an existing customer base should both be considered during this stage of the business life cycle.
Alternatively, some business owners choose to merge or sell during the maturity stage. Other business owners may choose to use extra cash flow to invest in a new business venture.
Note-: During the maturity stage some business owners may choose to sell, merge, or purchase another company.
4. Decline or Renewal
The final stage of the business lifecycle is either decline or renewal. Business decline is inevitable for most companies and can occur for a wide range of reasons including drops in the customer base to cash flow issues.
A steadily diminishing revenue sustained over several years of operation is one sign that a business is in decline. At this point, the main two options that a business owner chooses between is either to reinvest or sell.
Reinvestment in a declining business is executed with the objective that a company will bounce back. Reinvestment may necessitate various proactive activities, ranging from an exploration of new markets to business model adjustments.
Whether a small business or a large corporation, there are 4 main stages of business development.
The 4 stages include the startup, growth, maturity, and renewal or decline stage.