Business life cycle
they are but sales can fall resulting in profit loss. Decline. Profits fall and it is difficult to borrow money. Suppliers refuse credit and stock is lost also qualified employees may leave to seek better opportunities. The last option is renewal. Businesses try to come up with new marketing strategies to satisfy the consumers demands. Also the timing of when you release your product is also effective.
When a business stops operating it has two options. Voluntary cessation and involuntary cessation. Voluntary cessation is when the owner decides to stop trading and prevent the culmination's of debt. While the other option involuntary cessation is forced upon. The owner is forced to stop sale by the creditors(the people who are owed money).
Business failure is a major issue a business faces. 35% of small business fail in the first year and 75% in the first 5 years. The main causes are Under capitalisation(lack of money)not enough to purchase enough stock and materials due to lack of profit and sales. Another reason is a lack of management expertise. Mangers with lack of experience can make the wrong decision and the whole business can go down with it. If managers follow the four phases there business is on the right track. The Business Life Cycle has its ups and downs but if you manage a business well you can establish a well respected business and a successful one also. But if you don’t follow the BLC you couldn’t have a business at all. Businesses don’t plan to fail, the fail to plan.