Entrepreneurship and Small Business (ESB) V2 Certification Practice Exam

What phase in the business life cycle focuses on revenue, expenses, and growth?

1. Existence

2. Survival of the fittest

3. Decline

4. Introduction

The correct answer is: Survival of the fittest

The phase in the business life cycle that focuses on revenue, expenses, and growth is commonly referred to as the Survival phase. During this stage, businesses that have developed a marketable product or service are primarily concerned with managing their operational costs, maximizing revenue, and sustaining growth. This phase entails a critical evaluation of financial performance as companies work to establish themselves in the marketplace and ensure they can generate sufficient revenue to cover expenses. Effective financial management becomes essential, as businesses seek to not only survive but also thrive. The existence phase focuses more on establishing the business and determining its viability in the market, while the introduction phase deals with product launch and initial market penetration, which precedes significant revenue generation. The decline phase indicates that a business or product is losing market relevance, which typically involves decreasing revenues and increasing challenges related to expenses. Overall, understanding the Survival phase is essential for entrepreneurs as it lays the foundation for future growth and sustainability of the business.