Understanding the Life Cycle of an Entrepreneurial Venture

An entrepreneurial venture is a startup business that works on a common or innovative new product and competes in the market.

It requires extensive planning, competent leadership and a unified front of employees to succeed. An entrepreneurial venture has a number of benefits like decentralization of economic power, balanced regional growth, mobilization of local resources, women empowerment, employment generation and many more.


Such an enterprise needs a prominent plan and proper management skills to enhance the main product. To encourage entrepreneurial ventures, the governments often provide subsidies and concession to help in the growth and promotion. Entrepreneurs start companies on various products and are categorized according to their business type, technical skills, growth factor, and status of development.

Entrepreneurial Venture Life Cycle

It is vital for a potential entrepreneur to understand the life cycle of an entrepreneurial venture vividly. There is a lot of risk and efforts involved in pulling up a new enterprise to a successful one.

The life cycle of an entrepreneurial venture includes a number of stages from its idea/innovation, plan to its decline or rejuvenation. There are some seven prominent stages in an entrepreneurial company’s lifecycle. It is like the birth to death of a particular object. The various stages discussed in details below:

Discovery / Exploration 

This is the stage of an enterprise which can be considered as the birth of a business idea. A potential business aspirant comes up with an idea which has significant financial scope in a profitable market. The idea is discussed and researched on to make a proper intellectual property.

Entrepreneurs are the sole producers or innovators in this process, and they mostly do the work. The idea is explored by the business person and is referred to experts for opinions and advice. This unshaped thought is gradually molded into a sound business concept. The exploration phase of an entrepreneurial venture is a vital stage as her the first stone is cast for the foundation of the enterprise.

Involvement / Business Plan 

The idea is well researched, and a proper plan is developed for the entrepreneurial concept. This needs to be presented to potentially interested investors and financial institutions for support. The plan needs to involve extensive research and have a proper market idea and useful concept.

This planning and involvement is a crucial stage, and a lot of the enterprise’s future depends on it. The plan needs to have an objective and should show a commitment to be profitable, and this helps the investors gain a certain amount of confidence in the plan. The adjustable factor of the plan is essential. It is presented to and read by people from different backgrounds, and it should address their interests from their vantage point.

Growth / Development 

The development stage is another ultimatum phase in an entrepreneurial venture life cycle. This is when the actual production, technical work, and management of the production take place. The development is on what the enterprise depends on its profit-making.

Here all the different kinds of developments in various segments and departments are done. All types of amendments to make the business a success and profit-making are conducted here.  This is when the enterprise is creating a consistent income and is considered stable.

A lot of work is involved in this phase like the demands of the customers, improvement of the product as well as handling competition. The expanding of the business is another important factor of an enterprise. It is usually included in the growth phase but may also be mentioned as a separate stage by itself.


Here the business reaches its peak, and there is a saturation of inputs. The feedback is at its best but not increasing. The consolidation point is when the company doesn’t have the potential to generate more out of the given inputs. It is what the enterprise can squeeze out of its resources at its full capabilities.

The peak is often considered a good thing as long as it remains constant, but this phase usually doesn’t last for a very long time, and there is immobility of the business from that point onwards.


This is where the business can’t produce more profits and is stuck in a particular point with passing time. There is a prominent stoppage of growth acceleration, and eventually, the growth stops completely. This is common with the maturity of the economy and the period is short.


After this phase is the real deciding phase as to whether the enterprise will flourish or decline. When the financial growth is around 2% to 3% it is considered as stagnation. This period is characterized by the low employee and high pressure on existing employees. Sometimes when the company can bear it, the stagnation period is a prolonged one. This period has the entrepreneurs on edge as the decision-making moment draws near.


This is when the business can’t produce as it used to and there is a decline in the customers, sales, and profit margin. This can be due to the after-effects of the consolidation and stagnation period. Most believe that the enterprise has outrun its resources and potential to move forward. A non-progressive idea is never attractive. Sometimes there is a rampant decline in the business and their reasons for these are usually unplanned circumstances.


Not all entrepreneurial ventures can do this; however many can improve their resources and product and reintroduce themselves into the market. The process following is a lot like developing entirely new business, and that clicks from time to time.

With rejuvenation, the company starts growing again, and the next time the growth potential is usually much higher. A prime example of such rejuvenation is the Nike brand when it’s sales went beyond expectations this year and made up for the losses incurred due to strict tax laws.

This is how an entrepreneurial venture starts and in times dies off in the market. The entire life cycle of the entrepreneurial venture is essential for the knowledge of all entrepreneurial aspirants.


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