Efficiency and profitability along the lifecycle stages of small enterprises

Abstract

The Adizes lifecycle model is a widely used model for determining the different development stages of enterprises. Lifecycle stages may be differentiated even in the smallest companies, and the model may be used in analyses before making plans and can be a practical tool for managers in the decision-making process. We conducted an overall survey among Hungarian SMEs in 2012, and examined the different attitudes and behaviour of managers in different lifecycle stages of their companies and the most important motivations and driving forces of their decisions in the specific stages. Firstly, we analysed the financial performance of enterprises according to the results of their balance sheet, by which we determined four main categories depending on their business success. Our results proved that the profitability of enterprises is strongly influenced by their lifecycle stage and the growing process is also determined by the age of the enterprise.