During which business cycle phase are companies likely to experience high startup costs without profitability?

The Launch Phase is characterized by companies investing significant resources to develop their products or services, establish their brand, and create market presence. During this phase, businesses often face high startup costs, which can include expenses for product development, marketing, hiring staff, and setting up operations. Since the product or service is newly introduced to the market, profitability is typically not yet achieved as the sales volume may not cover these initial investments.

In contrast, during the Growth Phase, companies usually start to see an increase in revenues as their products gain traction in the market, leading to potential profitability. The Maturity Phase implies that a company has established its market position, where sales stabilize; thus, startup costs and issues of profitability would not be relevant as they have likely been resolved. The Decline Phase indicates a reduction in sales and may not involve significant startup costs but rather cost-cutting measures to stay viable. Therefore, the Launch Phase is the correct context for high startup costs and lack of profitability as the company seeks to establish itself.