Entrepreneurship and Small Business (ESB) Certification Practice Exam

Which of the following is the correct order of the business life cycle stages?

1. Survival, Existence, Success, Take-off, Resource maturity, Exit plan

2. Survival, Existence, Take-off, Success, Pivot or persist, Exit plan

3. Existence, Survival, Success, Take-off, Resource maturity, Pivot or persist, Exit plan

4. Pivot or persist, Existence, Survival, Resource maturity, Exit plan

The correct answer is: Existence, Survival, Success, Take-off, Resource maturity, Pivot or persist, Exit plan

The correct sequence of business life cycle stages highlights the progression a business usually undergoes from its inception to its conclusion. A typical business life cycle starts with the "Existence" stage, where the business is established but faces uncertainties related to market fit and operational viability. Following this, the "Survival" stage occurs as the business strives to generate enough revenue to sustain itself and cover its costs. Next comes the "Success" stage, where the business begins to see substantial stability and may experience growth in revenues and market presence. After achieving success, a business moves into the "Take-off" stage, during which rapid growth can occur, and the business may expand its operations significantly. The "Resource maturity" stage follows, indicating that the business has matured in its operations and resources are being utilized effectively. Finally, the "Pivot or persist" stage represents strategic decisions that may lead to changes in direction or consolidation efforts, culminating in an "Exit plan" where business owners devise strategies for transition out of the business, be it through selling, closing, or passing it on. This order reflects the life stages a typical business can experience, indicating a logical progression from inception through growth to exit strategies.