Categorizing various growth patterns and problems of small businesses seems a hopeless task in the first instance. In general, small companies may vary significantly in growth capacity and size. They are usually categorized according to action independence, varied management styles, and different organizational structures.

Surveys show that small businesses experience common problems at the growth stage. These points can be easily presented in the form of a framework to enhance understanding of characteristics, nature, and business problems. For managers and owners of small businesses, it has been an important tool to access current challenges in the organization. In addition, it can help managers to implement a reliable strategy for growth by making some relevant changes in the system.

There are mainly five essential growth stages for small businesses. Relevant details about each one are provided below from the perspective of experts at Global Investment Strategies. This information may help you to devise an effective strategy for growth.


The main problem for small businesses is obtaining relevant customers and delivering essential products and services to them. The critical questions they need to answer are whether they will get enough customers, will be able to provide products and services or will be able to maintain enough cash flow to run business operations at the start-up phase. They need to set up an effective strategy at this stage to direct all the energy and efforts toward end goals.


While reaching this stage, the business has obtained a workable business entity. It is expected to have enough customers and the potential to satisfy them. Therefore, the critical problem shifts to the relationship between expenses and revenues at this stage. At this stage, business owners and managers need to develop the company’s economic viability.


The primary decision in the third stage of business is to exploit the company’s accomplishments while expanding it towards a good and stable activity level. At this point, the business owners can spare time for some alternative activities, or they may think of setting up a new enterprise. First, however, they need to ensure that the business stays in a profitable state among all the activities.


The critical problems at this stage are how to grow the organization and the budget for that growth. At this point, they need to answer relevant questions about delegation and cash flow. In addition, it is essential to do adequate strategic and operational planning at this stage to maintain a business reputation in the complex and competitive environment.

Resource maturity

At this particular stage, the company’s primary concerns are consolidating and controlling financial gains while enjoying rapid growth. The owners need to work hard to maintain operational flexibility with an enhanced entrepreneurial spirit. It is essential to eliminate inefficiencies in development while working on crucial tools such as standard cost systems, objective management, and strategic planning.

Adequate management of resources and finances at all these levels can help in the uninterrupted growth of the business.