The business life cycle is the progression of a business over time and can be generally divided into 5 stages:
1. Launch
2. Growth
3. Shake-out
4. Maturity
5. Decline
1. Launch
The launch phase is the nascent stage and the products or/and services are launched in this phase.
In this phase, sales are negligible and the cash flow and profit are usually negative.
2. Growth
This is the phase where the company finds a Product Market Fit and sales tend to boom.
In this phase, the sales are booming and cash flow starts to become positive. As the profits start happening the cash reserve would tend to increase as well with time.
3. Shake-out
In this phase, the sales are still increasing but the growth rate is slower than in Growth Phase. The slump in the growth of sales can be due to multiple reasons like market saturation, changes in the market trends, new competitors, etc.
Also as operational expenses are usually high by now, so slump in growth would lead to a decline in profitability.
4. Maturity
In this stage, the sales start to decline and profits decline too, but at an alarming rate. This is the last stage to reinvent and/or launch another product/service to bump up the sales and profit. Companies can move into emerging markets and industries to reposition themselves for better growth.
5. Decline
This is the final stage of the business where everything declines at a rapid rate. Sales, profit, and cash flow start to decline. The companies usually see this as an end chapter of that business or that business vertical.
These are just a brief about the life cycle of a business. There are a lot more sub-phases that a business goes through over years.
These phases can last from weeks to years and even decades.