Dr. Paul Borosky, DBA, MBA
Business Plan Writer & Financial Projections
What Are the Stages of Business Growth?
What Worked With Two Helpers Breaks With Twelve.
You hired more people for a big job, and somehow less got done. Everyone is waiting for you to check, approve, or decide, and you are working nights to keep up. Business consultant Dr. Paul Borosky, DBA, MBA, walks you through the stages businesses grow through and what has to change at each one.
Last Updated: 11/08/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Definition
What Are the Stages of Business Growth?
Short Answer
Organizational growth stages describe how a company’s structure must change as headcount rises. At the start, one owner handles everything. Next comes a small team the owner supervises directly. After that, the owner appoints team leads and manages through them. The way of working that succeeds at one stage usually breaks at the next.
Solo: do the work. Small team: guide each person. Large team: guide the guides.
Doctor Owl, in Plain English
“You hired twelve painters and kept working like you had two. They are not slow. They are waiting for you.”
How This Guide Works
Need the answer fast? Read the Short Answer above and the numbered steps. Want the full picture? Follow Hazel, a squirrel who paints for a living from Dr. Paul’s Fabled Forest Business School Series, as she hires twelve painters for her biggest order and nobody paints. Her story shows up in a few short gold notes along the way. The math sits in one section, clearly marked.
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Meet Hazel Again: Twelve Painters, No Painting
Some lessons stick better as a story. Dr. Paul’s Fabled Forest Business School Series teaches business through a forest full of small business owners. Doctor Owl, a dry-witted consultant who lives in the Lone Oak, helps them fix the same problems real owners face.
Today Mrs. Owl-Willow, Doctor Owl’s wife, arrives at Hazel’s studio to help with her biggest order ever: sixty name boards for a market in the jungle, due in six days. Hazel has hired twelve painters. The studio is full. Not one of them is painting. They are all waiting for Hazel.
Why It Matters
Why Does Adding People Sometimes Slow a Business Down?
When an owner works alone, doing everything personally is a strength. With a couple of helpers, working beside them and correcting every detail still works. But past a certain size, the owner becomes the gate every task has to pass through.
More people means more waiting, not more output. The owner works longer hours, the team sits idle between approvals, and the payroll grows while the work does not. Recognizing your growth stage tells you which habits to drop.
In the Fabled Forest
Every board waited on Hazel. She drew every design, checked every stroke, and took finished boards home at night to repaint them. On the weekend, twelve painters finished twelve boards between them.
The Three Stages
What Changes as a Small Business Grows?
- The owner alone. You do the work, the selling, and the books. Speed comes from your own skill.
- The owner directing helpers. You work beside a few people and direct each one. Quality comes from your attention.
- The owner leading leads. You set the standard, pick a few leads, and check at set times. Quality comes from the system, and an organizational structure starts to matter.
- Beyond that. Leads may become managers, each owning a part of the business.
In the Fabled Forest
At six boards a day, sixty boards would take ten days. Ten days of twelve painters at three coins a day each was 360 coins in wages, for a job that paid 300. A loss, and four days late.
Making the Shift
How Does an Owner Move to the Next Stage?
Stop doing the work the team can do, and start doing the work only the owner can do: setting the standard up front, choosing leads, and checking at fixed times instead of all day.
Expect it to feel wrong at first. Owners who have succeeded by touching everything will want to step back in constantly. The fixed check times protect the team’s working time from the owner’s good intentions.
In the Fabled Forest
The next morning, Hazel drew all the day’s designs in the first hour and pinned them on the wall. She named two leads. On the door she wrote two check times, noon and five. Mrs. Owl-Willow counted eleven times she nearly broke the rule that first day.
The Numbers
What Did the Stage Change Do to the Job?
Here is Hazel’s sixty-board order before and after she changed how she ran the studio.
| Owner checks everything | Owner leads leads | |
|---|---|---|
| Boards finished per day | About 6 | 15 |
| Days to finish 60 boards | About 10 | 6 |
| Wages, 12 painters at 3 coins a day | About 360 | 216 |
| Paint | 30 | |
| Paid for the job | 300 | 300 |
| Result | A loss, 4 days late | 54 kept, on time |
Step 1: The old pace. 60 boards ÷ 6 a day = 10 days. 10 days × 36 coins a day in wages = 360, more than the 300 job paid.
Step 2: The new pace. 15 boards a day once designs were set in the morning and checks moved to noon and five. 60 boards in 6 days.
Step 3: The result. 300 paid − 216 wages − 30 paint = 54 kept, with the same twelve painters.
Illustrative numbers in forest coins, from the book. Use your own team size and output.
Step by Step
How Do You Restructure a Growing Team?
Four steps when the team grows and output does not.
Name your current stage.
Alone, directing helpers, or leading leads? Be honest about how you actually work today.
Set the standard up front.
Decide the designs, specs, or rules for the day before work starts, so nobody waits for you.
Pick leads.
Choose one lead for every few people. They answer questions and check work in their group.
Check at fixed times only.
Set two or three check times a day and post them. Between them, stay out of the work.
In the Fabled Forest
Doctor Owl’s scroll for Hazel had three lines and a question. Solo: do the work. Small team: guide each person. Large team: guide the guides. Which one are you this week?
Hazel’s Full Story
Did Hazel Finish the Sixty Boards?
This page gives you the short version. The book gives you the whole week in the studio: twelve painters holding brushes in the air, the boards she repainted at night, the evening on the studio floor, two times written on the door, and the young mole who painted the very last border.
Every chapter of Growth for Small Businesses works the same way. One owner, one problem, one real idea you can use on Monday, plus a one-page worksheet to do it.
A Business Consultant’s View
What Does a Consultant Change at Each Growth Stage?
Dr. Paul Borosky, DBA, MBA · Business Consultant
When a business grows and profit does not, Dr. Paul looks at how the owner spends the day. If the owner is still checking every piece of work, approving every decision, and redoing what the team finished, the business is running a small-team playbook on a bigger team. The fix is structural, not motivational. He helps the owner set standards before work starts, name leads, and replace constant checking with fixed review points. The first week is uncomfortable for the owner. By the second week, the team is producing more and the owner is working fewer hours, which is the clearest sign the business has moved to its next stage.
FAQ
Which Questions Come Up as Your Team Gets Bigger?
What are the stages of growth in a small business?
Why does my team get less done when I hire more people?
How do I know my business has outgrown its structure?
Keep Going
What Should You Read Next on Leading a Growing Team?
This is foundation 13 of 20. These pages build on it. New to a term on this page? Every one is in the growth glossary.
Written by Dr. Paul Borosky, DBA, MBA, business consultant and author with 14+ years of experience and 1,000+ clients served. Weighing a growth move and want a second set of eyes? See business consulting and prices.
This page is for general educational purposes only. It is not legal, financial, employment, or other professional advice. Figures are illustrations. The Fabled Forest and its characters are fictional. For decisions about your own business, consult a qualified professional.