The Five Stages of Small Business Growth
- ISSN: 00246301
- ISBN: 0415184703
- DOI: 10.1016/0024-6301(87)90071-9
Abstract
As a small business develops it moves through five growth stages, each with its own distinctive characteristics. Because the transition from one stage to the next requires change, it will be accompanied by some crisis or another. Crises tend to be disruptive and the problems of change can be minimized if managers are proactive rather than reactive. Prior knowledge of what generates crises and what to expect in each stage will smooth the process of change. This article proposes a model of small business growth to enable managers of small businesses to plan for future growth. The model has been successfully tested and used by the authors in analysing and solving the problem of growing small businesses. The model isolates the five growth stages, the sort of things that will precipitate crises and the major strategies that should be considered at each stage. Its main purpose is as a diagnostic tool in analysing the firm's present position and in planning what will be required as it progresses to the next stage of its development.
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