conclusion for business cycle assignment

Business Cycle

A series of expansion and contraction in economic activity

What is a Business Cycle?

A business cycle is a cycle of fluctuations in the Gross Domestic Product (GDP) around its long-term natural growth rate. It explains the expansion and contraction in economic activity that an economy experiences over time.

A business cycle is completed when it goes through a single boom and a single contraction in sequence. The time period to complete this sequence is called the length of the business cycle.

A boom is characterized by a period of rapid economic growth, whereas a period of relatively stagnated economic growth is a recession. These are measured in terms of the growth of the real GDP, which is inflation-adjusted.

Stages of the Business Cycle

In the diagram above, the straight line in the middle is the steady growth line. The business cycle moves about the line. Below is a more detailed description of each stage in the business cycle:

1. Expansion

The first stage in the business cycle is expansion. In this stage, there is an increase in positive economic indicators such as employment, income, output, wages, profits, demand, and supply of goods and services. Debtors are generally paying their debts on time, the velocity of the money supply is high, and investment is high. This process continues as long as economic conditions are favorable for expansion.

The economy then reaches a saturation point, or peak, which is the second stage of the business cycle. The maximum limit of growth is attained. The economic indicators do not grow further and are at their highest. Prices are at their peak. This stage marks the reversal point in the trend of economic growth. Consumers tend to restructure their budgets at this point.

3. Recession

The recession is the stage that follows the peak phase. The demand for goods and services starts declining rapidly and steadily in this phase. Producers do not notice the decrease in demand instantly and go on producing, which creates a situation of excess supply in the market. Prices tend to fall. All positive economic indicators such as income, output, wages, etc., consequently start to fall.

4. Depression

There is a commensurate rise in unemployment. The growth in the economy continues to decline, and as this falls below the steady growth line, the stage is called a depression.

In the depression stage, the economy’s growth rate becomes negative. There is further decline until the prices of factors, as well as the demand and supply of goods and services, contract to reach their lowest point. The economy eventually reaches the trough. It is the negative saturation point for an economy. There is extensive depletion of national income and expenditure.

6. Recovery

After the trough, the economy moves to the stage of recovery. In this phase, there is a turnaround in the economy, and it begins to recover from the negative growth rate. Demand starts to pick up due to low prices and, consequently, supply begins to increase. The population develops a positive attitude towards investment and employment and production starts increasing.

Employment begins to rise and, due to accumulated cash balances with the bankers, lending also shows positive signals. In this phase, depreciated capital is replaced, leading to new investments in the production process. Recovery continues until the economy returns to steady growth levels.

This completes one full business cycle of boom and contraction. The extreme points are the peak and the trough.

Business Cycle Diagram, with the Different Stages

Explanations by Economists

John Keynes explains the occurrence of business cycles is a result of fluctuations in aggregate demand, which bring the economy to short-term equilibriums that are different from a full-employment equilibrium.

Keynesian models do not necessarily indicate periodic business cycles but imply cyclical responses to shocks via multipliers. The extent of these fluctuations depends on the levels of investment, for that determines the level of aggregate output.

In contrast, economists like Finn E. Kydland and Edward C. Prescott, who are associated with the Chicago School of Economics, challenge the Keynesian theories. They consider the fluctuations in the growth of an economy not to be a result of monetary shocks, but a result of technology shocks, such as innovation.

Additional Resources

Thank you for reading CFI’s guide to Business Cycle. To learn more, check out these additional CFI resources:

Free Economics for Capital Markets Course
Law of Supply
Normative Economics
Cyclical Unemployment
Inelastic Demand
See all economics resources
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Business Plan Conclusion: Summary & Recap

You’ve written your business plan, but now you want to wrap it up to make a lasting impact on your reader. In this article, we will define the conclusion to a business plan as well as provide some tips to help you attract and seal the deal with potential investors and lenders.

What is a Business Plan Conclusion?

This business plan conclusion is a concise summary and recap of all of the components of a business plan , but especially the executive summary. It summarizes your business plan in 2-3 paragraphs, with an emphasis on the most important points.

Download our Ultimate Business Plan Template here

Is the Business Conclusion Necessary?

It’s good practice for business plans, but not always necessary to be successful in obtaining funding.

If you have a stellar executive summary, it may be unnecessary.

If the business conclusion is written well enough, it can serve as an executive summary of sorts – a short recap that provides more detail than the business plan as a whole, but only includes the most important points. It could also serve as an executive summary that is more concise than an actual executive summary.

How To Write a Conclusion for Your Business Plan

The conclusion of your business plan is the last thing people read before deciding to invest in you and your business, so it needs to make a lasting impression.

Determine Location

Depending on your intended audience, there are two common places for the conclusion. If your plan is meant for internal purposes, you may have the conclusion at the end of the entire document. However, if you are seeking funds from investors, you want to place the conclusion at the end of the Executive Summary, increasing the chances that it is actually read.

Review & Concisely Recap

conclusion reviews key points from the executive summary

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Startups might include the following information:.

Funding requirements
Service or benefit to the investor
Target market and audience
How products or services solve the target market’s problem
Marketing strategy
Competitive advantage
Management team experience
Financial projections
Launch plan

Established businesses might include information in their conclusions such as:

Mission statement
Company’s history
Products and/or services
Historical growth data
Financial summary
Company’s goals

Summarize the 3-5 points in a couple of paragraphs. You don’t need to summarize everything that happened in your business plan, just the most important points of the business plan.

Support Your Claims with Stats and/or Visuals

Establish a Call-To-Action (CTA)

Proofread & Spell-Check

The conclusion needs to give your readers a sense of closure by wrapping up all loose ends while making your last pitch effort to obtain the money your business may need.

Business Plan Conclusion Example

Use this conclusion example to help you with how to end a business plan, but keep in mind to make it relevant to your target audience, industry, and funding requirements:

Expanding into the Seattle metro area will allow Skyridge to provide its cutting-edge technology to more people who need it. Purchasing the fabrication plant in Seattle allows us to produce all of our products in-house and in one location, delivering them promptly and efficiently to the northwestern region.

We have the power to change the way people use technology, and we want [Investor’s Name] to be a part of it. By investing in Skyridge’s growth, [Investor’s Name] will benefit in the following ways:

Inclusion with a startup that has seen XXX% growth over the past X years and our company’s management team with XX years of experience in the technology industry
Contribution to Seattle’s economic growth and its citizens’ access to technology that enhances their lives
Participation in company planning meetings and receive an XX% share in all profits earned

We can add to the number of lives Skyridge’s technologies impact, generate more job opportunities in the region, and alter the technology sector if we work together. If you agree with our vision for a better future for everyone, join us.

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How to Write a Great Business Report Conclusion: Everything You Need to Know

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When creating a comprehensive business report for your company, most of your time and energy will go into writing the main section of your report.

Once you come to the conclusion, you will probably be exhausted and you may feel the urge to just ‘wrap it up’ as soon as possible.

This can be a costly mistake.

Your conclusion carries the same importance as all the other sections of the report since it leaves the final impression on the reader.

How you conclude your business report has a direct impact on the way in which the readers will respond to the important information you gathered.

The business report may be spectacular, but without a convincing conclusion, all your efforts may deteriorate.

In this article, we are going to teach you how to write a compelling conclusion that will leave a huge impression on all your readers.

What Is Conclusion in Business Report Writing?

How do you write a conclusion for a report, types of business report conclusions, improve business reporting with databox.

No matter which type of business report you have written, you will need a good conclusion to sum up all the critical information.

A business report conclusion is the last section of the document used for summarizing the most important information, providing a final word to the readers.

Through the conclusion, you are able to convey the main message of your business document. You use it to outline the report as a whole, remind the readers of the main pain points, and present the key findings and decisions.

Depending on whether you have written a shorter or longer business report, the conclusion length may vary, but it should always be included. It is a sign of good organization and it can make the readers understand the pain points much easier.

To put it simply, the conclusion is supposed to create the impression among the readers that the purpose of the report has been achieved.

Business report conclusions have a lot of similarities to executive summaries, which is why a lot of people tend to confuse these two.

However, there are some important things that differentiate them. These include:

Executive summaries are mainly focused on displaying what the report will be about, while conclusions are an overview of what was discussed in the report.
Executive summaries provide readers with a broad overview of the business report, while the conclusion summarizes the key pain points and most important data.
Executive summaries should convince the readers to continue reading the report, while the conclusion should persuade them to take certain action.
Conclusions tend to include CTAs (Call to Action), which isn’t the case with executive summaries.

Related : Executive Reporting: Management Reporting Best Practices & Report Examples

Now that you understand what a conclusion is and why it’s so important to include it in your report, let’s show you how you can write the perfect one and impress your readers.

Follow these steps to create a great business report conclusion.

Choose the Position

Include the right information, summarize the contents, facts and statistics, maintain a positive tone, develop a cta.

There are two places where conclusions are most commonly placed – at the end of the executive summary and at the end of the entire report.

For business plan reports, the common practice is to place the conclusion at the end of the executive summary.

This way, you make the first step through the executive summary template and introduce the plan’s main pain points and funding needs. Then, you create a conclusion to summarize these numbers to your potential investors, which directly impacts their decision to go over the executive summary once more, this time reading it more thoroughly.

For other types of business reports, the conclusion will generally be placed at the end of the whole report. Established companies use these business reports to track performances and data from important departments, which is why the conclusion should primarily focus on briefly reviewing the key metrics you included and emphasizing the company’s main strengths.

The information you put into the conclusion also depends on whether you are a new startup looking to attract investments or an established company that wants to track performances and asses objectives.

To raise money, startups should include this type of information:

Financial needs
The benefits of their product and how it can affect the market
Target audience/ideal customer persona
How the product can attract new customers
Marketing and sales strategy
Competitive landscape and analysis
The expertise of the main members of the company
Financial forecasts (next 3-5 years)
Launching plan

Existing companies should include information such as:

Mission statement
Performance history
Data that showcases business growth
Financial summary
Overall goals and objectives

While these types of details are important, they aren’t universal for all reports. Your primary goal should be to include the most important data from your specific document and keep the conclusion concise and understandable.

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The best way to convey your main message is by explaining it in detail throughout the business report and then summarizing it to recap the main points.

When creating the business report, take notes of the most important information that you should later highlight in the conclusion.

Make sure to avoid any extra details since they are already provided within the report. Only include the key points that explain why the business report itself is useful to the company.

Also, don’t use any additional information that you didn’t include in the report. This can only confuse your readers and send mixed messages.

You should prepare some facts, statistics, and data to support the statements in your conclusion. No matter if the reader is a potential investor or the key stakeholders in your company, you will want to include some evidence to back up your claims.

This makes the conclusion much more convincing and the audience will see that your forecasts aren’t based only on vague assumptions.

The tone in your conclusion should match the rest of the document and the best way to leave an impression on the audience is by using a professional and positive tone throughout the whole report.

After going through the conclusion, the readers should feel interested and enthusiastic to support the growth of your organization.

Make sure you exude confidence by using strong and active language.

Including a call to action at the end of your conclusion helps you persuade the readers to support the goals you set up.

This can be anything from “Join us at X enterprises” or “Invest in X and become a part of the success”.

A good CTA includes strong action words through which you emphasize the benefits of investors joining your firm or key stakeholders supporting your objectives.

After you are finished writing the conclusion, go over it once again to make sure there aren’t any spelling, grammar, or punctuation mistakes you overlooked. The conclusion should be clear, precise, and easy to go understand.

You can even ask a colleague or a friend to read it since it’s always helpful to have an extra set of eyes. Ask their opinion on how the conclusion makes them feel and whether it was easy to go through.

As we said, depending on which type of business report you have written and what is included in it, there are a few different types of conclusions you should differentiate.

Let’s walk you through them.

Conclusion with a Prediction

Conclusion with a major problem, conclusion with a quote, conclusion with a summary.

If your report focuses on a decision or strategy that already took place, you can write a conclusion that predicts the outcomes of that specific strategy.

You can include financial forecasts, sales expectations, and overall growth predictions. Make sure to also back up your predictions with sufficient evidence.

Writing this type of conclusion can be a bit tricky. You don’t want to come off strong and repeat the same issue over and over again. However, you do want the readers to take the issue seriously and realize why it is important that everyone focuses on solving it as soon as possible.

Be direct, but also lenient. Describe why that issue is important and provide a few ways on how you can solve it. Keep it brief and memorable.

Ending your conclusion with a powerful quotation can leave a great impression on the readers. However, you should be very careful when choosing the right quote.

You can’t just throw in some saying from Shakespeare and wrap it up. It is best to quote someone influential in the industry in such a way that it reinforces your message.

When writing your short but meaningful summary, don’t go into detail about your main points again. Keep it as brief as possible and only remind the readers of the most important information.

Also, you should remember that a conclusion doesn’t have to include only one of these things. Mixing up a summary and a prediction can be a powerful combination, so always try to figure out a few different ways to convey your message and then choose the right one.

Business reporting is one of the indispensable activities within a company, but it is also one of the most time-consuming.

The traditional way of creating business reports has always been a daunting task for executives around the world – hours spent copying and pasting, checking different tools for data, tracking the performance each week, and constantly updating the reports manually.

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With our customizable dashboards , you will save both time and energy by tracking all of your important data in one place and updating it in real-time. You can connect your favorite devices and monitor business performances in one comprehensive report.

Additionally, you will also be able to prepare beautiful and understandable reports by using some of our advanced visualization tools. With just a few clicks, you can visualize all of the key metrics and turn them into professional-looking graphs and charts.

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What Is a Business Cycle?

How It Works
Measuring and Dating
Relationship With Stock Prices

The Bottom Line

Business cycle: what it is, how to measure it, and its 4 phases.

conclusion for business cycle assignment

Depression in the Economy: Definition and Example
Economic Collapse
Business Cycle CURRENT ARTICLE
Boom And Bust Cycle
Negative Growth
What Was the Great Depression?
Were There Any Periods of Major Deflation in U.S. History?
The Greatest Generation
U.S. Government Financial Bailouts
Austerity: When the Government Tightens Its Belt
The New Deal
The Economic Effects of the New Deal
Gold Reserve Act of 1934
Emergency Banking Act of 1933

Madelyn Goodnight / Investopedia

Business cycles are a type of fluctuation found in the aggregate economic activity of a nation—a cycle that consists of expansions occurring at about the same time in many economic activities, followed by similarly general contractions. This sequence of changes is recurrent but not periodic.

The business cycle is also called the economic cycle .

Key Takeaways

Business cycles are composed of concerted cyclical upswings and downswings in the broad measures of economic activity—output, employment, income, and sales.
The alternating phases of the business cycle are expansions and contractions.
Contractions often lead to recessions, but the entire phase isn't always a recession.
Recessions often start at the peak of the business cycle—when an expansion ends—and end at the trough of the business cycle, when the next expansion begins.
The severity of a recession is measured by the three Ds: depth, diffusion, and duration.

Understanding the Business Cycle

In essence, business cycles are marked by the alternation of the phases of expansion and contraction in aggregate economic activity and the co-movement among economic variables in each phase of the cycle.

Aggregate economic activity is represented by not only real (i.e., inflation-adjusted) GDP —a measure of aggregate output—but also the aggregate measures of industrial production, employment, income, and sales, which are the key coincident economic indicators used for the official determination of U.S. business cycle peak and trough dates.

Popular misconceptions are that the contractionary phase is a recession and that two consecutive quarters of decline in real GDP (an informal rule of thumb) means a recession.

It's important to note that recessions occur during contractions but are not always the entire contractionary phase. Also, consecutive declines in real GDP are one of the indicators used by the NBER, but it is not the definition the organization uses to determine recessionary periods.

On the flip side, a business cycle recovery begins when that recessionary vicious cycle reverses and becomes a virtuous cycle, with rising output triggering job gains, rising incomes, and increasing sales that feedback into a further rise in output .

The recovery can persist and result in a sustained economic expansion only if it becomes self-feeding, which is ensured by this domino effect driving the diffusion of the revival across the economy.

Of course, the stock market is not the economy. Therefore, the business cycle should not be confused with market cycles , which are measured using broad stock price indices.

Measuring and Dating Business Cycles

The severity of a recession is measured by the three D's: depth, diffusion, and duration. A recession's depth is determined by the magnitude of the peak-to-trough decline in the broad measures of output, employment, income, and sales.

Its diffusion is measured by the extent of its spread across economic activities, industries, and geographical regions. Its duration is determined by the time interval between the peak and the trough.

An expansion begins at the trough (or bottom) of a business cycle and continues until the next peak, while a recession starts at that peak and continues until the following trough.

The National Bureau of Economic Research (NBER) determines the business cycle chronology—the start and end dates of recessions and expansions for the United States.

Accordingly, its Business Cycle Dating Committee considers a recession to be "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

The Great Depression featured many recessions, one of which lasted for 44 months.

The Dating Committee typically determines recession start and end dates long after the fact. For instance, after the end of the 2007–09 recession, it "waited to make its decision until revisions in the National Income and Product Accounts [were] released on July 30 and Aug. 27, 2010," and announced the June 2009 recession end date on Sept. 20, 2010.

U.S. expansions have lasted longer than U.S. contractions on average. Between 1945 and 2019, the average expansion lasted about 65 months. The average recession lasted approximately 11 months.

Between the 1850s and World War II, the average expansion lasted about 26 months and the average recession about 21 months. The longest expansion was from 2009 to 2020, which lasted 128 months.

Stock Prices and the Business Cycle

The biggest stock price downturns tend to occur—but not always—around business cycle downturns (e.g., contractions and recessions). For example, the Dow Jones Industrial Average and the S&P 500 took steep dives during the Great Recession. The Dow fell 51.1%, and the S&P 500 fell 56.8% between Oct. 9, 2007 to March 9, 2009.

There are many reasons for this, but primarily, it is because businesses assume defensive measures and investor confidence falls during contractionary periods. Many events occur before people in an economy are aware they are in a contraction, but the stock market trails what is going on in the economy.

So, if there is speculation or rumors about a recession, mass layoffs , rising unemployment, decreasing output, or other indications, businesses and investors begin to fear a recession and act accordingly. Businesses assume defensive tactics, reducing their workforces and budgeting for an environment of falling revenues.

Investors flee to investments "known" to preserve capital, demand for expansionary investments falls, and stock prices drop.

It's important to remember that while stock prices tend to fall during economic contractions, the phase does not cause stock prices to fall—fear of a recession causes them to fall.

What Are the Stages of the Business Cycle?

In general, the business cycle consists of four distinct phases: expansion, peak, contraction, and trough.

What Does a Business Cycle Describe?

A business cycle describes the fluctuations in an economy over a period of time, generally the period from the start of one recession to the start of the next. This would include periods when the economy grows.

Are Business Cycles Predictable?

Generally, business cycles are not predictable. Economies are complex machines that function in a variety of ways and are intertwined in as many ways. The ability to predict how they will move is extremely difficult. There can be signs of changes in an economy, such as changes in inflation and production, but to predict an all-out change in the business cycle is very tough if not impossible.

The business cycle is the time it takes the economy to go through all four phases of the cycle: expansion, peak, contraction, and trough. Expansions are times of increasing profits for businesses, and rising economic output, and are the phase the U.S. economy spends the most time in. Contractions are times of decreasing profits and lower output and are the phase in which the least amount of time is spent.

Federal Reserve Bank of St. Louis. " All About the Business Cycle: Where Do Recessions Come From? "

The National Bureau of Economic Research. " Business Cycle Dating ."

National Bureau of Economic Research. " The NBER's Recession Dating Procedure ."

Congressional Research Service. " Introduction to U.S. Economy: The Business Cycle and Growth ," Page 1.

National Bureau of Economic Research. " Business Cycle Dating Committee, National Bureau of Economic Research ."

Congressional Research Service. " Introduction to U.S. Economy: The Business Cycle and Growth ," Page 2.

Federal Reserve Bank of Atlanta. " Stock Prices in the Financial Crisis ."

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Writing an Effective Business Plan Conclusion: Tips & Examples

Do you need help concluding the business plan that you have worked so hard to create? A well-crafted business plan conclusion is essential for setting the tone for the entire document, and summarizing the key points that justify why the business will be successful. In this article, we will explore how to write an effective business plan conclusion that will ensure that your plan is read and taken seriously.

How to End a Business Plan?

The conclusion of your business plan should briefly summarize the main points of your argument. It should state why you believe your business will succeed and explain how you intend to achieve your goals. A business plan conclusion should cover the opportunity, highlight the strengths of your plan, summarize your vision, and remind the reader why your business is in a unique position to succeed.

A template example of a solid business plan conclusion follows:

Opportunity: Explain the opportunity that your business is capitalizing on and why it is attractive.
Key Strengths: Highlight the key strengths of your plan, such as your competitive advantage and any unique selling points.
Vision: Summarize your vision for the business and its future.
Unique Position: Remind the reader why your business is in a unique position to succeed.

It is important to keep your business plan conclusion succinct and to the point. It should be no longer than a few paragraphs, and should be a clear and concise summary of the entire document.

At Atlantabusinesses.com, we understand how important it is to have a clear and effective business plan conclusion. We are experts in the field of business brokering, and we can help you through the entire process of buying or selling a business. Visit our website for more information, and for answers to all your questions about selling a business and about business brokers.

What is the final stage of the business plan?

Conclude your business plan with a presentation for obtaining funding, and provide any relevant data, graphs, and charts to back it up. Make it explicit how much money you are asking for from investors—whether it is equity, a collaboration, or a loan.

What is the appropriate way to conclude a business plan letter?

What should be included in the concluding section of a business plan.

It should also include a description of the problems you are trying to solve, a review of your marketing strategy, and an assessment of the financials. The best way to write an executive summary is to write it after you have a thorough understanding of your entire plan and can succinctly summarize it. The executive summary should include your company’s mission statement, a description of the products and services you offer or plan to offer, an overview of the problems you are aiming to solve, an assessment of your marketing strategy and an overview of the financials.

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Introduction to a Business Cycle

If you’re not familiar with the business cycles, it can be challenging to know where to start. A quick look at the dictionary might lead you to believe that it’s a single event or period, but in reality, it refers to a series of stages that all businesses go through. In this guide, we’ll look at what each stage entails and how they affect your company.

A business cycle is a period that describes the natural ebbs and flows within an economy. The term “business cycle” can be used to describe both economic expansions and recessions. Generally, what we know is that a recession starts with a decline in production and sales levels. This decline usually lasts for 18 months or more before it reverses again into an expansion phase where production and sales increase once again.

Business Cycle Definition

A business cycle is a pattern in which the economy moves from one stage to another. This includes periods of growth and recession, expansion and contraction, boom and bust. The length of cycles can vary depending on the type of industry or sector you are looking at. The most important thing to understand about business cycles is that they happen naturally, due to economic forces, and without any interference by government policies or other actors in the marketplace.

The term can also refer to the complete business cycle, which consists of four phases: expansion, peak, contraction, recovery phase. This new recovery period will typically be at lower levels than that of the previous expansion period.

Stages in a business cycle include expansion, peak, recession, depression, trough, and recovery. The depression stage is when an economy falls into recession with rising unemployment rates and decreasing output levels of goods and services. The trough occurs as new investment begins to pick up again during the recovery stage. The expansion phase is when the economy starts experiencing economic growth, which peaks before entering another depression cycle.

For example, the depression stage of the 2008 recession followed a severe downturn in the economy from 2007-2009. The trough phase began as unemployment rates started to decline and investment levels increased by 2010. In December 2015, another depression cycle occurred as GDP decreased due to weak growth in investments and exports with rising inflation rates. This is why it’s important to understand depression and recovery stages and the trough and expansion phases of a business cycle.

The next depression phase occurred in December 2016. The expansion stage is what most people think of when they hear “business cycle.” This period typically occurs during the early stages of economic growth, often coinciding with low unemployment rates and high production. Economic output increases as businesses are profitable enough to make new investments in equipment or software. Businesses expand their workforce, which leads to a rise in consumption. As expansion continues, the economy reaches a peak stage where economic output is highest, and unemployment rates are meager.

The recession phase occurs when businesses begin to slow down their expansion efforts due to increased production costs or lack of demand for goods or services they offer. Since consumers are not spending as much money on goods, unemployment rates rise, which leads to decreased consumption. When expansion slows down, businesses are making less money and may be forced to close their doors or lay off workers to stay afloat.

Business Cycle Indicators

Business Cycle Indicators (BCI) are statistical measures of the economy. They include “a wide range of economic indicators” that can be used to help understand a country’s overall business cycle and in which direction it is heading. Business cycles refer to fluctuations in real GDP around its long-term growth trend or average output level over time. Indicators can help predict where a country’s economy is moving. Business cycle indicators include things such as employment, retail sales, and housing starts. They are usually measured by comparing two fundamental values: peaks and troughs in the overall business cycle, also called turning points or landmarks. BCI can also determine whether an economic expansion is strong or weak. Besides, they are employed by governments to prepare for upcoming changes.

Business Cycle vs. Market Cycle

The business cycle is a measurement of various factors that affect the economy, while a market cycle is an indicator of economic trends over time.

Market cycles are more pronounced than business cycles because they reflect changes in supply and demand during different periods or seasons throughout the year. For example, if the economy is in a recession, it will take longer for market cycles to recover.

Businesses can be affected by either business or market cycles depending on their industry and sector of focus.

The four phases that make up both business and market cycles (expansion, peak, contraction, and trough) can be positive or negative depending on the economic climate.

Examples of Business Cycles

In the late 19th century, New England’s economy was characterized by a series of economic expansions and contractions. This cycle, known as the “New England” or “Boston Cycle”, spanned from 1845 to 1933. Until Ben Bernanke published his research paper “Nonmonetary Effects” in 1983, the reason for this pattern wasn’t fully understood. In short, the investment would rise during expansions while capacity constraints caused prices to fall. Firms would cut back on employment and wages during contractions. This pattern of behavior was discovered to be a key driver in the business cycle.

The Great Depression that lasted from 1929-1939 is considered one of the worst economic disasters ever experienced by modern economies. During this time lasting deflationary pressures led to massive consumer debt defaults and bank failures that resulted in widespread financial panic and global trade collapses. Many economists believe that this event resulted from an overly expansionary monetary policy combined with poorly regulated banking practices leading up to it.

A business cycle is the recurring rise and fall of a nation’s economy over time, as measured by fundamental gross domestic product changes. The economic fluctuations that occur at this rhythm are called business cycles. If we measure GDP and compare it to itself on different dates, we can identify periods when there were significant differences between these measurements. These observations represent peaks (or downturns) in the historical record of an economy because they denote times when GDP was significantly higher (or lower). Business cycles refer to short-run volatility around a trend growth rate and longer-term expansions and contractions from year-to-year data points. In addition to their cyclical nature, recessions also have specific characteristics that are observable in the data. The National Bureau of Economic Research (NBER) has compiled an official list for this purpose since 1920 by using its business cycle chronology and additional resources from outside economists who have proposed dates for particular economic events.

What is a business cycle?

What are the phases of a business cycle?

The four stages of an economic cycle are expansion, peak, decline, and trough.

How is a business cycle different from a market cycle?

A market cycle refers to the stock market’s considerable growth and decline phases, while a business cycle reflects the economy as a whole.

Who measures business cycles?

The National Bureau of Economic Research examines quarterly GDP growth rates to define business cycle stages.

What factors shape a business cycle?

Factors that form a business cycle include many variables fluctuations, including government policies, interest rates, consumer spending levels, and international trade conditions.

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Economic Issues: Business Cycles Essay

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Macroeconomic concerns

Economic growth, phases of a business cycle, trend lines, macroeconomic policy challenges and tools.

It is crucial to note that over time, some of the main macroeconomic variables are prone to considerable changes. The aggregate level of real output of an economy (usually represented by GDP or GNP) tends to grow.

The recurring deviations from the real aggregate output about the trend can be referred to using various interchangeable terms such as business cycles economic cycles, or economic fluctuations. Thus, macroeconomics can be divided into two major areas of research: one related to the study of short-term behavior of a product (business cycles), which is

Short-term macroeconomics; and another related to the performance of the product in the long term (a trend). The latter can be explained using various theories of economic growth.

Additionally, it is possible to characterize the macroeconomic variables according to the direction along the following cycle. First, variables which increase when the product level (income) increases are called “pro-cyclical” while those that decreases are referred to as “counter-cyclical.” Those that do not have a standard defined throughout the cycle are called “acyclic” reductions. The same reasoning is valid for the product level.

These variables can also be classified according to their correlation with the economic cycle (high or low) and by the timing of their oscillations. Thus, a variable is considered to be “leading,” if it tends to move before the aggregate output, “lagging” if it moves slower than a product and “coincidental” if it presents a cyclical pattern that occurs simultaneously according to changes in a product.

Studies of the business cycle were rather vague at the beginning of the century. It later lost importance, only to return as a major research agenda dominant in macroeconomic in the 70s. As it stands now, the study of the business cycle is am an important entity for economists and policy makers in the discipline of economics.

The contemporary market economies are characterized by two phenomena: a long-term growth trend and more or less significant fluctuations in activity around this trend. Economic cycles cover a more or less regular succession of booms and recessions. Expansion is typically a low point of activity at a high point, and conversely, recession refers to economic movement from a high to a low point.

When the overall price level increases, it is referred to as inflation. Alternatively, it can be defined as the widespread and sustained increase in prices of goods and services within a particular economic region. To measure the growth of inflation at any given time, there are several key economic factors and parameters that must be put into consideration.

For instance, the Consumer Price Index (CPI) is used to measure the rate of inflation. Also, the National Consumer Price Index is used to compute the percentage increase in the pricing of products. Another measurement factor is the Producer Price Index. The latter is used to take a precise measurement of price growth of raw materials required for the process of production.

Realistically, three types of inflation can be identified. First, inflation for consumption or demand usually obeys the law of supply and demand. If the demand for goods exceeds the capacity of production or importation of goods, prices tend to increase indefinitely. Second, inflation costs occur when the price of raw materials goes up.

As a result, producers end up increasing their prices so that they can maintain a comfortable profit margin. The third type is known as self-constructed inflation. It automatically takes place when a strong future price increase is seen in advance. After that, it gradually adjusts itself.

Inflation expectations generated by the vicious circle is common in high-inflation countries where workers demand wage increases to counteract the effects of inflation that often give rise to a vicious cycle of inflation.

To curb inflation, central banks tend to increase the interest rate on public debt. As a result, interest rates are increased in consumer loans (credit cards, mortgages, and so on). By increasing interest rates of consumption, product demand slows down.

The downside of this control measure is that it slows the industry that produces given products. This can lead to economic stagnation and unemployment.

When inflation goes beyond the standard level, it is referred to as hyperinflation. It implies that there is a substantial or sharp rise in the price of goods and services within a very short period. In some instances, the price increase might go as up as 50 percent within one month. A fall in price level indicates that the rate of inflation is negative.

To measure the actual performance of an economy, an aggregate growth output is the right index to employ. It refers to the total of products generated by an economy. Other macroeconomic factors worth considering in this discussion include recession, depression, and unemployment rate.

When two quarters experience a drastic decline in aggregate outputs, it usually leads to recession. When recession persists for a considerably long period, it culminates into economic depression. The rate between those that are employed and the unemployment can be used to calculate the unemployment rate within any given jurisdiction.

When the production possibilities of an economy are expanded, it results in economic growth. This implies that an increase in the actual value of Gross Domestic Product (GDP) can be precisely used to measure the growth of an economy. It is equally crucial to understand the meaning of real GDP. Within a single year, any given nation produces goods and services from various sectors of the economy. When the total production is put together and then quantified in terms of prices, it results in the real Gross Domestic Product of a country.

A business cycle has four distinct phases. These include the peak (prosperity), recession, trough (depression), and recovery phases. These have been illustrated in the diagram below.

The Peak (prosperity) phase

The standard of living rises when the margin of profits, prices, employment, income, and output expand. Such a period in the business cycle is known as the peak or prosperity phase. Some of the key features of this phase include:

The high volume of output
Increased trade coupled with a high degree of demand
Increase in the rate of employment and income generation activities
Rising rates of interests
Investment and the marginal efficiency of capital improves
Impressive business optimism
Substantial expansion in credit pool offered by banks and other financial institutions.

Recession phase

This phase marks the point at which the peak turns to trough. In other words, the economy begins to shrink. Slow down in economic activities is experienced during this economic phase. Investors tend to give up future investments, and overproduction immediately, the demand level begins to drop.

This phase is also marked by a drop in profits, prices, employment, income, and the overall volume of production. An economy experiences a negative response from the business community, owing to pessimism and low confidence. The level of credit also falls because both individuals and financial institutions rush to secure more liquidity in their investment portfolios.

Tough (Depression) phase

Depression usually sets in when people begin to experience a low standard of living owing to persistent fall in the margin of profits, prices, employment, income, and output of production. This phase is characterized by:

A substantial drop in trade and output of production
The rise in unemployment and a decline in revenue
A drop in interest rates
A decline in the marginal efficiency of capital
Overall business pessimism
Bank credit contracts
A drop in investment

Recovery Phase

This is a phase at which an economy begins to revive itself from depression. Hence, it is the turning point from the trough phase to expansion. This phase is marked by a gradual rise in the number of economic activities. Investment portfolios tend to increase owing to improved production of goods and services coupled with a rise in demand. Also, profits, prices, employment, income, and output begin to experience a steady rise.

There is a positive response from the market owing to the increased confidence level to invest. Once investments have been stimulated, the economy which was once depressed begins to recover. This phase also warms up credit expansion from banks and other financial institutions. Activation of the stock markets is also evident during the recovery phase of the business cycle. The recovery phase eventually transforms into the peak or prosperity phase, and the cycle begins to repeat itself.

During a given business cycle, the economy’s output performance can be traced using trend lines. The latter is used to relate one business cycle phase to another, such as one prosperity to another one depression phase to another depression phase. When economic growth is in the offing, trend lines that slope upwards are used. Hence, as the trend lines get steeper, it signifies a rise or improvement in the growth of an economy. At a time when the growth of an economy is negligible, horizontal trend lines can be seen.

There are several challenges faced by macroeconomics in the modern economy. It is crucial to mention that these challenges are policy-based.

Hence, resolving the challenges demand a critical look at the prevailing economic policies. To begin with, boosting economic growth is a major challenge that most economies struggle with almost every financial year. Whereas there are both market and non-market forces that fuel economic growth at any given time, monitoring and regulation of these forces are sometimes hampered by policies on the ground.

Second, keeping inflation low is a strenuous economic task. When the prices for goods and services rise beyond the sustainable levels, it becomes quite difficult to maintain economic growth. Inflation may sometimes be fuelled by external factors that are beyond the control of a government. Other macroeconomic policy challenges include reducing local and international deficits, reducing the rate of unemployment, and stabilizing business cycles.

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Economics Gr. 10 T1 W7 Lesson: Macroeconomics - Business cycles

Economics Grade 10 Term 1 Wk7 Lesson: Macroeconomics - Business cycles

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What is Business Cycles? Phases, Types, Theory, Nature

Post last modified: 1 August 2021
Reading time: 40 mins read
Post category: Economics

What is the Business Cycle?

Business Cycle , also known as the economic cycle or trade cycle , is the fluctuations in economic activities or rise and fall movement of gross domestic product (GDP) around its long-term growth trend.

No era can stay forever. The economy too does not enjoy same periods all the time. Due to its dynamic nature, it moves through various phases.

Table of Content

1 What is the Business Cycle?
2 Business Cycle Definition
3.1 Expansion
3.3 Contraction
4.1 Cyclical nature
4.2 General nature
5 Types of Business Cycle
6.1 Hawtrey Monetary Theory
6.2 Innovation Theory
6.3 Keynesian Theory
6.4 Hicks Theory
6.5 Samuelson theory
7 Business Economics Tutorial

The change in business activities due to fluctuations in economic activities over a period of time is known as a business cycle . Business cycle are also called trade cycle or economic cycle. Business Cycle can also help you make better financial decisions.

The economic activities of a country include total output, income level, prices of products and services, employment, and rate of consumption. All these activities are interrelated; if one activity changes, the rest of them also change.

Business Cycle Definition

Arthur F. Burns and Wesley C. Mitchel defined business cycle definition as

Business cycle are a type of fluctuation found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions, and revivals which merge into the expansion phase of the next cycle; in duration, business cycle vary from more than one year to ten or twelve years; they are not divisible into shorter cycle of similar characteristics with amplitudes approximating their own. Arthur F. Burns & Wesley C. Mitchel

Phases of Business Cycle

4 Phases of Business Cycle are:

Contraction

Let us discuss 4 phases of business cycle in detail:

Expansion is the first phase of a business cycle . It is often referred to as the growth phase .

In the expansion phase, there is an increase in various economic factors, such as production, employment, output, wages, profits, demand and supply of products, and sales. During this phase, the focus of organisations remains on increasing the demand for their products/services in the market.

The expansion phase is characterised by:

Increase in demand
Growth in income
Rise in competition
Rise in advertising
Creation of new policies
Development of brand loyalty

In this phase, debtors are generally in a good financial condition to repay their debts; therefore, creditors lend money at higher interest rates. This leads to an increase in the flow of money.

In the expansion phase, due to increase in investment opportunities, idle funds of organisations or individuals are utilised for various investment purposes. The expansion phase continues till economic conditions are favourable.

Peak is the next phase after expansion. In this phase, a business reaches at the highest level and the profits are stable. Moreover, organisations make plans for further expansion.

Peak phase is marked by the following features:

High demand and supply
High revenue and market share
Reduced advertising
Strong brand image

In the peak phase, the economic factors, such as production, profit, sales, and employment, are higher but do not increase further.

An organisation after being at the peak for a period of time begins to decline and enters the phase of contraction. This phase is also known as a recession .

An organisation can be in this phase due to various reasons, such as a change in government policies, rise in the level of competition, unfavourable economic conditions, and labour problems. Due to these problems, the organisation begins to experience a loss of market share.

The important features of the contraction phase are:

Reduced demand
Loss in sales and revenue
Reduced market share
Increased competition

In Trough phase, an organisation suffers heavy losses and falls at the lowest point. At this stage, both profits and demand reduce. The organisation also loses its competitive position.

The main features of this phase are:

Lowest income
Loss of customers
Adoption of measures for cost-cutting and reduction
Heavy fall in market share

In this phase, the growth rate of an economy becomes negative. In addition, in trough phase, there is a rapid decline in national income and expenditure.

After studying the business cycle , it is important to study the nature of business cycle .

Read: Difference Between Micro and Macro Economics

Nature of Business Cycle

The nature of business cycle helps the organisation to be prepared for facing uncertainties of the business environment.

Cyclical nature

General nature.

Let us discuss the nature of business cycle in detail.

This is the periodic nature of a business cycle. Periodicity signifies the occurrence of business cycle at regular intervals of time. However, periods of intervals are different for different business cycle . There is a general consensus that a normal business cycle can take 7 to 10 years to complete.

The general nature of a business cycle states that any change in an organisation affects all other organisations too in the industry. Thus, general nature regards the business world as a single economic unit.

For example, depression moves from one organisation to the other and spread throughout the industry. The general nature is also known as synchronism.

Read: What is Business Economics?

Types of Business Cycle

Following the writings of Prof .James Arthur and Schumpeter, we can classify business cycle into three types based on the underlying time period of existence of the cycle as follows:

Short Kitchin Cycle
Longer Juglar cycle
Very long Kondratieff Wave

Short Kitchin Cycle (very short or minor period of the cycle, approximately 40 months duration)

Longer Juglar cycle (major cycles, composed of three minor cycles and of the duration of 10 years or so)

Very long Kondratieff Wave (very long waves of cycle, made up of six major cycles and takes more than 60 years to run its course of duration)

Business Cycle Theory

A business cycle is a complex phenomenon which is common to every economic system. Several theories of business cycle have been propounded from time to time to explain the causes of business cycle.

Business Cycle Theory are:

Hawtrey Monetary Theory

Innovation theory.

Keynesian theory

Hicks Theory

Samuelson theory.

Hawtray was of opinion that in depression monetary factors play a critical role. The main factor affecting the flow of money and money supply is the credit position by the bank. He made the classical quantity theory of money as the basis of his trade cycle theory .

According to him, both monetary and non-monetary factors also affect trade. His theory is basically the product of the supply of money and expansion of credit. This expansion of credit and other money supply instrument create a cumulative process of expansion which in return increase aggregate demand.

According to this theory the only cause of fluctuations in business is due to instability of bank credit. So it can be concluded that Hawtray’s theory of business cycle is basically depend upon the money supply, bank credits and rate of interests.

Criticism of this Business Cycle theory

Hawtray neglected the role of non-monetary factors like prosperous agriculture, inventions, rate of profit and stock of capital.
It only concentrates on the supply of money.
Increase in interest rates is not only due to economic prosperity but also due to other factors.
Over-emphasis on the role of wholesalers.
Too much confidence in monetary policy. vi. Neglect the role of expectations. vii. Incomplete theory of trade cycles.

The innovation theory of business cycle is invented by an American Economist Joseph Schumpeter. According to this theory, the main causes of business cycle are over-innovations.

He takes the meaning of innovation as the introduction and application of such techniques which can help in increasing production by exploiting the existing resources, not by discoveries or inventions. Innovations are always inspired by profits. Whenever innovations are introduced it results into profitability then shared by other producers and result in a decline in profitability.

Innovation fails to explain the period of boom and depression.
Innovation may be major factor of investment and economic activities but not the complete process of trade cycle.
This theory is based on the assumption that every new innovation is financed by the banks and other credit institutions but this cannot be taken as granted because banks finance only short term loans and investments.

Keynesian Theory

The theory suggests that fluctuations in business cycle can be explained by the perceptions on expected rate of profit of the investors. In other words, the downswing in business cycle is caused by the collapse in the marginal efficiency of capital, while revival of the economy is attributed to the optimistic perceptions on the expected rate of profit.

Moreover, Keynesian multiplier theory establishes linkages between change in investment and change in income and employment. However, the theory fails to explain the cumulative character both in the upswing and downswing phases of business cycle and cyclical fluctuations in economic activity with the passage of time.

Hicks extended the earlier multiplier-accelerator interaction theory by considering real world situation. In reality, income and output do not tend to explode; rather they are located at a range specified by the upper ceiling and lower floor determined by the autonomous investment.

In the theory, it is assumed that autonomous investment tends to grow at a constant percentage rate over the long run, the acceleration co-efficient and multiplier co-efficient remain constant throughout the different phases of the trade cycle, saving and investment co-efficient are such that upward movements take away from equilibrium.

The actual output fails to adjust with the equilibrium growth path overtime. In fact it has a tendency to run above it and then below it, and thereby, constitute cyclical fluctuations overtime. This basic intuition can be shown with the help of the following figure.

Wrong assumption of constant multiplier and acceleration co-efficient.
Highly mechanical and mathematical device.
Wrong assumption of no-excess capacity.
Full-employment ceiling is not independent

According to this theory process of multiplier starts working when autonomous investment takes place in the economy. With the autonomous investment income of the people rises and there is increase in the demand of consumer goods. It directly affected the marginal propensity to consume.

If there is no excess production capacity in the existing industry then existing stock of capital would not be adequate to produce consumer goods to meet the rising demand. Now in order to meet the consumer’s requirements, producers will make new investment which is derived investment and the process of acceleration principle comes into operation.

Then there is rise in income again which in the same manner continue the process of income propagation. So in this way multiplier and acceleration interact and make the income grow at faster rate than expected. After reaching its peak, income comes down to bottom and again start rising.

Autonomous investment is incurred by the government with the objective of social welfare. It is also called public investment. The autonomous investment is the investment which is done for the sake of new inventions in techniques of production.

Derived investment is the investment undertaken in capital equipment which is induced by increase in consumption.

This model only concentrates on the impact of the multiplier and acceleration and it ignored the role of producer’s expectations, changing business requirements and consumers preferences etc.
It is not practically possible to compute the fact of multiplier and acceleration principle.
It has wrong assumption of constant capital output ratio.

Business Economics Tutorial

( Click on Topic to Read )

What is Economics?
Scope of Economics
Nature of Economics
What is Business Economics?
Micro vs Macro Economics
Laws of Economics
Economic Statics and Dynamics
Gross National Product (GNP)
What is Business Cycle?
W hat is Inflation?
What is Demand?
Types of Demand
Determinants of Demand
Law of Demand
What is Demand Schedule?
What is Demand Curve?
What is Demand Function?
Demand Curve Shifts
What is Supply?
Determinants of Supply
Law of Supply
What is Supply Schedule?
What is Supply Curve?
Supply Curve Shifts
What is Market Equilibrium?

Consumer Demand Analysis

Consumer Demand
Utility in Economics
Law of Diminishing Marginal Utility
Cardinal and Ordinal Utility
Indifference Curve
Marginal Rate of Substitution
Budget Line
Consumer Equilibrium
Revealed Preference Theory

Elasticity of Demand & Supply

Elasticity of Demand
Price Elasticity of Demand
Types of Price Elasticity of Demand
Factors Affecting Price Elasticity of Demand
Importance of Price Elasticity of Demand
Income Elasticity of Demand
Cross Elasticity of Demand
Advertisement Elasticity of Demand
Elasticity of Supply

Cost & Production Analysis

Production in Economics
Production Possibility Curve
Production Function
Types of Production Functions
Production in the Short Run
Law of Diminishing Returns
Isoquant Curve
Producer Equilibrium
Returns to Scale

Cost and Revenue Analysis

Types of Cost
Short Run Cost
Long Run Cost
Economies and Diseconomies of Scale
What is Revenue?

Market Structure

Types of Market Structures
Profit Maximization
What is Market Power?
Demand Forecasting
Methods of Demand Forecasting
Criteria for Good Demand Forecasting

Market Failure

What Market Failure?
Price Ceiling and Price Floor

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Did we miss something in Business Economics Tutorial? Come on! Tell us what you think about our article on Business Cycle | Business Economics in the comments section.

What is Inflation?
Determinants of Demand

What is market structures types of market structures.

What is Market Failure? Definition, Examples, Causes

What is Market Power? Definition, Determinants, Measurement

What is Business Economics? Definition, Scope, Importance

What is Supply? Definition, Concept, Determinants, Types, Function

Techniques & Methods of Demand Forecasting

What is the Elasticity of Demand? Definition, Formula, Example, Types

Law of diminishing returns: definition, example, importance.

What is Cross Elasticity of Demand? Formula, Types, Example

What is long run cost type: total, average, marginal, profit maximization: definition, formula, short run & long run, what is returns to scale definition, assumption, types, leave a reply cancel reply.

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How to Write a Business Plan Conclusion?

Business Plan Template

Vinay Kevadia
June 20, 2024

Completed writing your business plan?

Let’s wrap it up with a conclusion that ends your business plan on an exciting and positive note. Not to forget—a conclusion that convinces the readers about your business’s potential to succeed.

In this blog post, you will learn exactly how to write a conclusion of a business plan and get an example to guide you.

Let’s get started.

What is a business plan conclusion?

A business plan conclusion is the final section concluding very concisely the points discussed in your business plan.

It reinforces the business’s strengths and feasibility and reassures the readers of potential business success. It clarifies the reader’s benefit of associating with your business and convinces them of a profitable investment opportunity.

A conclusion is about 3-4 paragraphs long and is designed to drive action and leave a lasting impression on reader’s minds.

Business plan conclusion vs. executive summary

Many people confuse a conclusion and an executive summary to be the same. However, they are not. Let’s see how.

An executive summary is a broad overview of your entire business plan. The conclusion, on the other hand, is a concise summary reinforcing the key takeaways of your plan.
While an executive summary introduces the readers to your business idea, a conclusion convinces them to take the desired action.
An executive summary is a preview of what the plan will be about. The conclusion, on the contrary, is a review of what the plan has discussed.
An executive summary is concise. However, conclusions are more concise covering only the aspects that can drive decisions and actions.

Clear enough, right? Let’s move ahead.

Why is a business plan conclusion important?

Although a conclusion is not mandatory, it is an important aspect of a business plan. It communicates your passion and commitment to a business idea and convinces the readers of your ability to succeed.

A conclusion synthesizes the key insights of your business plan focusing on aspects such as market analysis , business strategy, competitive advantage, and milestones. It reinforces your plan’s vision and establishes your strategic position amongst readers.

A well-crafted conclusion will drive desired actions from the readers. It can seal the deal and fulfill your objective of writing a business plan.

How to write a conclusion for your business plan?

From what information to include to where to place the conclusion—this section will guide you to write an impactful conclusion for your business plan.

1. Choose the right placement

There are two places for you to place your conclusion. It can either be after your executive summary or at the end of the document.

The location changes depending on who you plan to present your business plan with.

If you prepare a business plan for investors , placing your conclusion after the executive summary will increase the likelihood of it getting read.

However, the conclusion should be placed at the end for business plans that are prepared for internal use and business partners. Conclusion in this case reviews and emphasizes the company’s strengths.

2. Place the right information

The information in your conclusion changes depending on your audience and the intent of the business plan.

For instance, if you’re a new business trying to secure funds, your conclusion can synthesize the key details about the following:

Funding demands
Benefit to the investors
Target market and target customers
Solution for the problem
Marketing strategy
Team members and their expertise
Financial projections
Competitive advantage
Launch plan

However, if you’re a small business trying to grow or use this plan for internal use, consider covering key insights from the following aspects:

Mission statement
History and the milestones
Data supporting growth
Industry trends
Financial summary
Long-term goals and objectives

These are the details you can cover while writing your conclusion. However, including every bit of these in your conclusion is unnecessary.

Think from your reader’s perspective. Determine the information that would excite them about your business and form your conclusion accordingly.

3. Include stats and visuals

Now that you’ve decided on the placement and information to be included in your conclusion, it’s time to make your conclusion zesty.

How? Get the facts and stats that would support the claims you make in your conclusion.

For instance, if you’re promising growth, show market research that supports your claim. Again, if you’re promising a certain return on investment, include the statistics that can make investors believe you.

Sway away from vague statements and assumptions. And, if you feel that the statistic would be best absorbed through visual charts or graphics, don’t be afraid to add one.

4. Add a CTA

If you want the readers to take action, guide them. Add a crisp clear call to action(CTA) and explain how the readers would benefit from taking that action.

For instance,

Join us as a silent partner by investing in Beanco.
Invest $2 M and secure a 20% stake in equity.
Support our growth by sharing references.

Don’t beat around the bush. If you are making a funding request, be unapologetic. And even if not, your CTA should suggest how a reader can support your growth.

5. Review and proofread

Once your conclusion is ready, re-read and proofread it for any grammatical or spelling errors. Fix the flow and remove fluff to make your conclusion crisp and persuasive.

Get your friends and business partners to read the conclusion and check if the message you are trying to send is crisp and clear. If not, make the necessary adjustments.

Business plan conclusion example

Use this business plan conclusion as a reference and tailor yours keeping in mind the needs, objectives, and audience for your business plan.

Launching EcoRide Electric Scooters will revolutionize urban transportation by providing an eco-friendly, efficient, and affordable solution for city commuters. Our innovative design and advanced technology will set us apart in the rapidly growing market for sustainable transport options.

We are poised to make a significant impact on urban mobility, and we want [Investor’s Name] to be a foundational part of our journey. By investing in EcoRide Electric Scooters, [Investor’s Name] will benefit in the following ways:

Joining a groundbreaking startup with a vision to reduce urban pollution and traffic congestion, led by a passionate team with over 20 years of combined experience in the automotive and tech industries.
Supporting the development and deployment of cutting-edge electric scooters, contributing to a cleaner, greener urban environment.
Gaining equity in a high-potential startup with a scalable business model and the potential for significant returns as we expand to new markets.

Together, we can transform urban transportation, reduce carbon footprints, and create a sustainable future for city dwellers. If you share our vision for a cleaner, more efficient urban commute, partner with us.

Let’s conclude your business plan

Now that you have understood the process and referred to an example, let’s conclude your business plan.

Identify the information you must highlight, encapsulate it into a powerful conclusion, and pair it with an even more powerful CTA.

However, remember that the conclusion just seals the deal. It’s the business plan that will hook your readers till the end. With Upmetrics’s AI business plan generator , you can create truly engaging business plans in just about 10 minutes.

So, improvise your business plan, sum it up with a convincing conclusion, and send over your business plan to your potential investors to secure funding.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

Frequently Asked Questions

How long should a business plan conclusion be.

A conclusion of your business plan can be anywhere between 2-3 paragraphs long. In this ideal length, you must outline the key takeaways of your plan, clarify the next step to the readers, and explain to them the benefit of supporting your business.

What is the most important part of a business plan conclusion?

A CTA is the most important part of the conclusion, especially if you are trying to raise funds. However, if you are writing a plan for internal purposes, focus more on synthesizing the key essentials of a plan.

Can I include new information in the conclusion?

A conclusion does not introduce any new information. It simply reinforces the business’s position and convinces the readers to take the desired action for one last time. For instance, offer funding for your business.

Is it necessary to include a call to action in the conclusion?

It is very important to add a crisp clear CTA while concluding your plan. You can’t expect the readers to invest in your business or help you grow if you don’t clarify the steps to take action.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

Reach Your Goals with Accurate Planning

How to Conclude an Assignment to Make It the Cherry on Top

Table of Contents

What Is a Conclusion?

Why are conclusions written, how to write a conclusion for an assignment, useful strategies for conclusion writing, typical words to start a conclusion, a conclusion example for assignment, now, it’s time for this article’s conclusion….

A conclusion is a summary of the whole assignment. It should restate the thesis, summarize key ideas presented in the assignment, and leave the reader with a final idea about the topic in general to ponder further! It is the most logical way to end an assignment. Conclusion writing is not so difficult!

The purpose of a conclusion is to link the thesis statement (written in the introduction) with main ideas or points (made in the main body) and provide an overall message. A conclusion provides closure and is expected in most academic related writing, including assignments, research papers, and essays .

To write an assignment conclusion, follow the 7 simple steps below!

Start a conclusion paragraph by indenting the first line or leaving a blank line in between the last main body paragraph and the conclusion.
Use a suitable starting word or phrase to indicate the assignment is drawing to a close, such as, ‘In summary’ or ‘With all this in mind’ (read on for further example starter words and phrases).
Revisit your introduction to remind yourself of the thesis e.g., ‘The biggest contributor to global warming is animal agriculture’ . Then, either paraphrase or answer the thesis e.g., ‘In summary, animal agriculture is the main cause of global warming’ .
Summarize the main point made by each paragraph in the assignment. So, if you have written 3 main body paragraphs, there should be 3 main points stated in the conclusion e.g., ‘ The animal agricultural sector causes extensive GHG emissions. As the world population grows, increasingly colossal areas of rainforest are being cleared for farmed animals, to keep up the demand for meat. Furthermore, seemingly unmeasurable amounts of animal wastes are polluting vast areas of land and water, thus ruining the biodiversity that helps to keep our planet’s GHG’s balanced’.
Ensure you do not give the reader any new information. The conclusion is not the place for this.
To end a paragraph, give your readers a closing sentence about the overall topic and try to encourage them to think further e.g., ‘If the world’s population continues to grow at its current rate and we do not make the shift towards a plant-based diet fast enough, we may reach a point whereby the damage to the ozone layer is beyond repair’ .
Finally, end a conclusion, proof-read it! Do not skip this part! There is no point writing an amazing conclusion in assignment if readers cannot understand it or spot several spelling, punctuation, or grammatical errors!

How to Write a Conclusion for an Assignment

Bear in mind that a conclusion paragraph is written in reverse order to the introduction. The introduction will begin with a general topic, focus on specific aspects of it, and then state a thesis. A conclusion for an assignment will be the other way around (thesis, main points, topic in general).
Remember, you are aiming to bring the reader’s mind back to the introduction and the key information given to them.
Encourage the reader to consider the future implications of the information you have provided them. This could be a general, wide statement about the topic or a question relating to the general topic to give the reader an alternative perspective or encourage their on-going thinking, after they have finished reading! The final sentence could be a ‘call to action’, a warning, or a future prediction.

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It’s important for the reader to sense the assignment is ending. Here are some useful words and phrases that can help you achieve this, and transition well into the concluding paragraph of your assignment:

Given the circumstances
Now that one knows
The logical conclusion appears to be
To summarize
Upon consideration of the facts discussed
After the exploration of multiple professional viewpoints
In view of this information
Nevertheless
When faced with the dilemma of
Bearing all this in mind
It seems clear that
Given the evidence presented
With all aspects considered

When writing a conclusion for an assignment, it can be easier to see an example:

Overall, owning a pet is a huge commitment that can span many years of one’s life. A pet will require regular feeding and day-to-day care. Many pets need large amounts of human interaction, attention, and affection which can be time-consuming. Furthermore, a pet may incur great costs by means of food, medical care and pet sitting (whenever the owner wants to go on vacation without the pet). The decision of whether to welcome a pet into your home must be considered in great depth, and at length, to prevent another potentially unwanted animal ending its life in an animal shelter.

Ultimately, writing a concluding paragraph is simple when you refer to the introduction for the assignment , and the key points made in the main body. All the information you need is already there, but it just needs re-working to provide the reader with closure, and perhaps also get them thinking further about the points you have made!

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Business Cycle

What is a Business Cycle?

Stages of the Business Cycle

1. Expansion

3. Recession

4. Depression

6. Recovery

Explanations by Economists

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Business Plan Conclusion: Summary & Recap

What is a Business Plan Conclusion?

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How To Write a Conclusion for Your Business Plan

Determine Location

Review & Concisely Recap

Finish Your Business Plan Today!

Established businesses might include information in their conclusions such as:

Support Your Claims with Stats and/or Visuals

Establish a Call-To-Action (CTA)

Proofread & Spell-Check

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What Is a Business Cycle?

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