How do businesses develop?

by | Mar 29, 2019 | Blog, For Franchisors

Are you considering starting a business? Want to know what that process can be like? The good news is that you can benefit from the experience of those who have gone before you. According to an article in, there are seven stages of growth for every business. Here’s how they play out:

Stage 1 – the Idea
Before you can start a business, you will, of course, need an idea of what that business will be. But, according to the experts, more than that, you should have a business plan, a blueprint for the creation and operation of your business.

Stage 2 – Launching your Business
You have developed and funded your idea. Now it is time to open your business. This will likely be an exciting but tough time. What looked simple on paper will have many kinks that need to be worked out.
Stage 3 – Survival
According to, Stage 3 can be a difficult phase. It is the make-or-break stage for your business. During this period, initial funds may start to dwindle and revenue may not yet have started flowing regularly. The most important thing at this stage is to remain flexible and to adapt to the changes that may be required. Challenges that you may not have known would arise may start to appear and problem solving will be your main focus.
Stage 4 – Managing the Flow
At this Stage, your business’ operations will begin to flow more steadily and processes will become more stabilized. Revenue levels will become more predictable and consistent and, hopefully at this point, your business’ profitability will increase. According to, it is at this point that many businesses may begin to coast and simply continue to maintain their status quo.
Stage 5 – Growth
This stage will require you to think beyond what you already have accomplished and ramp up your marketing and sales efforts. You also may have to invest in infrastructure and development.  Be careful, the experts caution, to not grow too quickly.
Stage 6 – Evolution. 
As your business grows, it will have to evolve to meet the demands of its bigger market(s). You may consider adding product lines or new services. These developments will require your investment in additional equipment, vendors and processes. This may be a tumultuous time, similar to the early stages of survival.
Stage 7- Exit
At some point, you will thing about retiring or taking a new path. For those in Stage 7, this may mean selling your business or perhaps stepping aside and passing the torch to someone else such as a key employee or family member.
The entrepreneurial experience is personal and no two stories are the same. However, the stages described above suggest a typical pattern of business ownership.  Keeping them in mind can better prepare you for what is to come.

Whether your business idea is the first of its kind in an industry or market or an innovative wrinkle in an established category, you are a member of a group of entrepreneurs – a tribe that has been around for centuries. You need not go it alone. So, if you are planning to launch a new business and still have questions, feel free to email them to me, Julie Lusthaus at [email protected] and let’s talk


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