Five key growth stages of small businesses

Though small businesses vary in type, organisational structure, and management style, five common features of all growing small businesses can be identified. Researchers Neil C. Churchill and Virginia L. Lewis first researched these stages, and I’ll be explaining these in this blog.

Existence

The first stage is about obtaining enough clients and selling your services enough to become a viable business. The key aim at this stage is for the business to simply exist, to be alive.

Survival

The aim of the next stage, survival, is to generate enough cash flow to at least break even after paying the expenses, including rent and wages.

Success

When the business has sufficient market penetration to make average or above average profits, it is at the success stage. This is when the business owner is faced with a key issue of whether to expand.

Take-off

This stage is one of rapid growth. It is a time when the business owner cannot handle the complex nature of the business organisation on his or her own and needs to delegate management tasks.

Maturity

Once the business is mature, it is still a small business but is steadily growing at a comfortable rate.

At all these business growth stages, there are challenges. Many start-up businesses fail to go past the survival stage. Competitors will likely try to harm rapidly expanding businesses. Recruiting and poor management harms a business, while investing too much and too soon in rapid expansion threatens cash flow.

At Cheshire Business Coaching, we’re here to guide you through all the stages of your business growth. Arrange a consultation with us today to start your business coaching journey.