What You Need To Know To Bring Ideas To Life: Stages Of Business Cycle


Business isn’t a constant thing. It isn’t stable or even predictable like many of us think at the beginning. Nevertheless, there is some regularity in the business processes.
Any business in any location and in any sphere is influenced by both external and internal factors. They cause some fluctuations in different periods of time, and they are termed as “phases of business cycle.” These phases are next: expansion, peak, recession, trough and sometimes recovery. This information may be useful if you are planning to create a startup or even have a constant and stable business now.

Business cycle - expansion

The most fine and pleasant period for every business start-up, this period is one of fast growth and expansion to people’s minds and market. It isn’t the highest point itself, but close to it. The main difference here is that expansion may take a lot of time for itself, and the peak is just a point that marks the top of your growth (expansion). In expansion phase we can see increase of production, employment, sales and profits. Also if your business grows quickly, it can attract attention of potential investors. Creditors also have the highest interest rate in this period.

Business cycle - peak

Every growth has its peak, and here it will slow down. Sometimes that means your business is on its peak in present conditions. This is a very important point. The most important decisions about how to further develop business must be made here. At the peak phase, prices of your product are maximized as much as possible, along with sales, profits, production and employment. But they can’t go further, that why this point of expansion is counted as a separate business cycle stage.

Business cycle - recession

Recession starts at peak and ends in the trough. This is a nervous period for every businessman, developer, start-up and even employer. This risky period shows that the market is fulfilled with your product, and nobody wants to pay its price. Now prices stay the same, but decreased demand deals a painful blow to your company. Now is the time to analyze all the business processes in your company, make it more efficient or even modernize it.


Business cycle - trough

The trough is a fourth business cycle stage, and this is the reverse of a peak. This is the bottom of macro and micro economy stages. This period tells you that you must work more efficiently, and it forces you to look around and understand how the current situation in the world or your local economy or company led to this.
The most important moment here to understand why this situation happened. Is it due to external or internal factors? Then, you can build a well-informed strategy based on this.

Business cycle - recovery

Not every business in the trough stage is doomed to an end. Once business touches the lowest level, it usually can grow again. We know that competent development and quality products are keys to every business being successful, along with its ability to deal with any challenges. That’s why we believe that the recovery stage exists and can be your chance for new expansion and the developing of your business. In this context, the most interesting and effective way to make your way through the recovery stage and back to the expansion stage is through the packaging option. Design may help you to re-work your product and breathe new life into it, but design is not only working with packaging. It also gives you the possibility to change “inner” vision of your product, and this invisible option may become a real win key for your product!