Who created the five stages of small business growth?

The five stages of small business growth, Existence, Survival, Success, Take-off and Resource Maturity, come from Neil Churchill and Virginia Lewis, in a 1983 Harvard Business Review article titled The Five Stages of Small Business Growth.

Their insight, still true more than forty years on, was that what changes across the stages is not the size of the business but what it asks of the owner. Here is the model, and what we would add to it.

Key takeaways

• The model is Churchill and Lewis's, published by Harvard Business Review in 1983.
• Its lasting idea: the real variable is the owner's changing role, not headcount or revenue.
• It endures because the transitions between stages are transitions in capability.
• What we add is the capability lens: each stage tells you where you are, capability tells you what to build to move.

The model, and who made it

Churchill and Lewis wrote their article to fix a gap. The research of the time explained large companies well and small ones poorly, treating growth as mostly a matter of getting bigger. They argued instead that small businesses pass through five recognisable stages, each with its own problems, and that the owner's role, the systems, and the way work is delegated change at every one.

Why it still holds

The technology has changed beyond recognition since 1983. The transitions have not. A business still stalls at the same points: when it must prove a market, when cash must hold, when the owner must choose whether to grow, when growth must be delegated and funded, and when a mature business must stay agile. The model lasts because it describes the owner's journey, and that has not dated.

What we would add: capability

Every transition Churchill and Lewis describe is, underneath, a capability transition. The thing that must change is what the owner and the business are able to do. That is the lens we bring. Their model tells you which stage you are in. A capability view tells you what to build next to move through it. For the practical version, see our guide to the stages of business growth.

Common questions

Is the model out of date? No. The conditions around businesses have changed. The stages an owner passes through, and the capability each demands, have not.

Where can I read the original? Churchill and Lewis, The Five Stages of Small Business Growth, Harvard Business Review, May 1983, at hbr.org.