The Importance Of Business Cycles

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Throughout the world most if not all economies have six main goals which consist of economic freedom, security, equity, efficiency, stability and growth. Also, throughout an economy every business and industry has its own business cycle. According to euntrepenuer.com a business cycle is defined as times at which an economy, business, or an industry contracts or expands. A business cycle has a large focus on economic booms and recessions. It is extremely important for managers and business owners to know where they are at in the business cycle in order to make good decisions for the business. The article labeled “Business Cycle,” found on euntrepenuer.com, focuses heavily on the history of business cycles and the effects of…show more content…
It starts by talking about all businesses have a business cycle. Management can have a drastic effect on the success of a business. Depending on where a business is at in its business cycle can have a major influence on how people manage the business. During a recession manager may act more conservative, whereas, during a boom mangers may be lees conservative and more aggressive. A business cycle consists of four trends which are peak, growth, bottom, and slow down. A slow down can be caused by multiple thing which include, new competitors, new products, and/or product maturity. After a slow down a business will hit its bottom. After the business hits its bottom it will began to grow again followed by hitting its peak. The cycle never stops unless the business shuts down. This also happens to an entire economy and is referred to as a macro cycle. Many publication companies try to predict a business cycle. Some of the major companies include “Wall Street Journal” and “Kiplinger’s.” One of the main influences of a business cycle for an industry or business is its customer base. The industry needs to satisfy the customers’ needs and wants in order to be successful. It is highly important for a business to adapt to the needs of its targeted customers. As an entrepreneur it is important to know where your business is at in its cycle. Knowing this…show more content…
The articles and the book says that a recession consist of a peak, recovery, recession, and a drought. A business cycle is highly important to our economy and every business. It is a way to predict when the economy or business is at its peak or when it is in a recession. Depending on where a business is at in the cycle can determine what management actions are takin. Sometimes a recession can be detrimental and cause a business to shut down. A business cycle will be important to me in future, due I have plans on owning my own real estate business. It will be crucial for me to watch how the market acts and respond accordingly. Since any market can crash and go into a recession, I will need to know when is the best time to sell and when is the best time to
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