As we have metamorphosis in the life cycle of living things so we have in the life cycle of a business. The metamorphosis shown by humans, animals and other living creatures shows a natural progression of growth that translates from birth to an older version of the specie.

Similarly, a business with all its intricacies transit from one phase to anotherfollowing the  natural progression of a growth pattern. Thus, we would see a business growing from its incubation stage to maturity stage. Different management gurus have posited and all agreed that businesseshas a life, with different stages of growth but the differing opinion is on the stages of growth and framework that characterises them. Aside thepopular ones such as annual sales and profitability but on other indices such as organisational structure, leadership, staff strength, level of owner’s involvement and the internal capabilities.

As the business moves through each stage, it encounters different obstacles that require different approaches and resources to address them. Simply put, as the business develops and expands, so will the business aims, objectives and strategies change. Therefore, understanding the different stages, will help prepare business owners for the obstacles and challenges ahead.

In the early stage, called the Incubation or Existence stage, all a business owner is concerned about is to see the business take off from the ground. The owner is the business, it revolves around him/her, he/she provides direction, goals and maintains momentum as well as performing most of the essential tasks. At this stage, delegation of responsibilities is minimalor non-existent with the company generally typified by absence of formalized structure and planning for some businesses.

Among the contending issues are the following: having enough money (cash flow) to cover the business expenses, the ability to increase the clientele base, would the product or services be accepted in the market, can it generate a repeat business?

How many companies can make it through this stage which usually can be from one –three years? Some companies do not have the market acceptance and the cash to stay afloat during this periodcoupled with the fact that the business owners cannot meet the daily demands the business places upon their energy and resources, they subsequentlyfold up.

2^nd Stage or the Survival Stage will be typified by an increase in the number of employees, structures begin to be formalized, minor decision making may be decentralized to other employees but the business owner may still retain the most authority and power even in his absence. 

The business in this category as the name depicts are still trying to survive and maintain market presence in order to generate sufficient cashflow for operations to sustain the increase in operations and remain afloat. Major contending issues are managing sales, balancing revenue and expenses, establishing market presence and the need to keep on changing and inventing new ways of keeping up with market trends. Margins may be thin and here is where most companies that have scaled through to this stage, get stagnated on thinner marginal returns or go intoextinction as the challenges could be limiting enough to affect the owner’s motivation to continue.

3^rd stage or the Growth Phase: Here, the business has faced and overcame many of the besetting issues that are common to most start-up businesses. The business may be generating regular cash flow to keep it afloat and fund other growth initiatives depending on the owner’s goal. There may be possibilities of expanding the business by considering a backward integration model to have all the business chain of the industry type or venture out completely to other industry. Major contending issues are market competition, staffing issues as a result of increased staff strength, managing the increased revenue etc.  Most owners consider this as a successful venture and continue to manage it within this scope.

4^th stage or Rapid Growth Phase is characterized by growth in revenue and cashflow as a resultofentrenched market presence facilitated by proven sales and marketing model. The business is now flourishing and in order to further entrench itself in the market, it will need to find new income stream.  Companies hire more employees to help handle increased scale of operations. The owner will need to decide on whether to increase its financial capacity to manage the increased growth through financing either via bank funding or debt-equity ratio. Too often than not, the company at this stage has a Board or Manager, the implication of this is that those who started the company may no longer be at the helm of affairs and if present, their level of control will have been whittled down. It is worthy of note that some owners may also not be able to sustain the phenomenon growth and hence decide to either sell off the business or reduce shareholding.

5^th stage or Maturity phase is typified by well-defined structure, dominant market presence and stable profits. The business and the owner are quite distinct and separate in spirit and letter. Decision making is decentralized with more managers having responsibilities backed by authority. The business must take advantage of its size, finance and industry strength. The contending issues are whether to introduce new products or services, expanding into a new market or expanding existing business lines etc.

Not all business will naturally transit from one life cycle to another progressively. Some companies will by-pass some stages and move directly to other stages. Examples of such are the growing technology companies. However, there would be some semblance to the stages highlighted above and all business owners need to be prepared and know what obtains in each of the stages.