Startup: The Second Stage of Business Lifecycle


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So, you meticulously gauzed and tested your business idea.  Now it’s time to get ready for the official launch of your startup. This means time to enter into the second stage of business that is the startup stage.  This is one of the critical stages that involve the concept of acquiring legal existence, having a product or service in production, and finally obtaining customers. Mistakes at this stage can impact the success and growth of a company years down the line. Adaptability is the way to ensure success at this stage.  Here, you need to work on tweaking your products or services on the basis of initial feedback from your first customer and market demand. It is essential to determine the specific needs to provide profitable service, and a periodic reality check will help you ensure that your business is on the right track. 

Important considerations 

This makes the critical phase for any company. The stage involves much crucial consideration such as defining the product or service, matching up your skills with a business opportunity, determining the business ownership structure, acquiring sufficient cash reserves to support your business.  Once you are products or services are in production, and you get your first customer, it is time to establish a customer base and market presence while keeping the conserving cash flow in the line. It is very crucial to acquire adequate customers and deliver products and acceptable services to become a viable business. Business needs to work on its strategies to expand from one key customer to a much broader sales base.


Your business is now ready to roll as you are officially up and duly registered as a legal entity. You are done with the production and service of a great team. But the stage comes with many challenges that will decide the success of your business. Managing cash reserves, accounting management, and dealing with an increasing customer base and market presence are few major challenges your business may go through at this stage.    

Establishing customer base and market presence

It involves testing and modifying the products to meet the market need and building a loyal customer base. Also, businesses need to ensure they have sufficient funds available to manage the significant cash flow of this phase effectively.  

Managing cash reserves

During the stage, sales are minimal and improve slowly and erratically. It involves a high level of operating expenses, and the business may have to invest heavily in long-term assets to launch the operation. Although starting up a business is exciting, this is where most businesses fail. So, you need to figure out a business model that enables you to get a sustainable cash flow to meet the growing financial need.   

Bottom Line

You started from having hypothetical solutions to a problem to hit the street and find the first clients ready to pay for it. Like other phases, this stage of business lifecycle also presents new challenges, but you can navigate this phase with confidence with the right customer analytics. By overcoming these challenges with the right approach, you will be leading your way to the next stage that is growth and establishment. 


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