The Five Stages of Small Business Growth

If running a small business sometimes feels like an elaborate psychological experiment designed to test your patience, endurance, and ability to function on dangerously low amounts of sleep, The Five Stages of Small Business Growth by Neil C. Churchill and Virginia L. Lewis will at least assure you that your suffering is normal. This Harvard Business Review classic is a masterful breakdown of the predictable, and often painful, phases that businesses go through as they grow—assuming they don’t implode along the way.

The book presents five clear stages: Existence, Survival, Success, Take-off, and Resource Maturity. In the beginning, everything is chaos—finding customers, delivering products, and simply keeping the business alive. If you make it past this stage (which many don’t), you enter Survival, where your main concern is keeping revenue ahead of expenses, often by the thinnest of margins. Then comes Success, where you must decide whether to scale or stay the course, followed by Take-off, where rapid growth forces founders to relinquish control—a task some find more terrifying than bankruptcy. Finally, Resource Maturity brings stability, but also the risk of stagnation. The ultimate insult? If you get too comfortable, you might end up in a dreaded unofficial sixth stage: ossification.

What makes this framework so insightful is that it doesn’t just describe financial growth—it also maps the psychological and managerial transformations business owners must undergo. Many entrepreneurs, for example, start out convinced they must personally handle everything, from sales to janitorial duties. This is sustainable for precisely zero successful companies. As Churchill and Lewis point out, failing to delegate and build systems is a fatal flaw that kills many businesses just as they begin to scale.

The book is also refreshingly pragmatic about the reality that not all businesses are destined for endless expansion. Some entrepreneurs may be perfectly happy running a small, profitable operation without the added headaches of rapid growth. Others, consumed by ambition, will charge ahead blindly—often straight into a financial brick wall. Churchill and Lewis don’t moralize; they simply present the options, the risks, and the trade-offs, allowing business owners to choose their own adventure.

For anyone navigating the perilous path of entrepreneurship, The Five Stages of Small Business Growth is both a lifeline and a wake-up call. Read it before you make your next big business decision—or at least before you find yourself wondering why everything is suddenly on fire.

⭐ Rating: 4.5/5 – Practical, well-structured, and eerily accurate in predicting small business struggles. Highly recommended for anyone leading a small business or advising entrepreneurs.

Would I frame it on my wall? No. Would I highlight half of it and nervously scribble notes in the margins? Absolutely.

https://hbr.org/1983/05/the-five-stages-of-small-business-growth