Early Growth States of Small Businesses in China: the Business Model Perspective

Document Type

Peer-Reviewed Article

Publication Date



In this study, we drew on the business model research and the stage theory of business growth to develop a five states model of how small businesses in China grow in their early existence. The model suggests that a Chinese small business may progress through five states of early growth, depending on the extent to which the business addresses the four fundamental issues in business value (for whom to create value, what value to create, how to create value, and how to capture value). To evaluate the validity of our model, we developed a survey instrument for assessing the five different growth states and collected the survey data from 100 small and micro businesses operating in the City of Changsha in China. A factor analysis of the survey data provided some initial evidence for the model structure.