Herein you will find a brief outline pertaining to my observations. Simplifying a bit, it seems evident that there are at least three phases of development each entailing two or more stages.

Phase I - Creation

Stage 1 - Identify - Hey!, I've got a great idea...

Stage 2 - Analyze and Formulate - But will it work...

Stage 3 - Establish - Let's give it a try...

The first phase -- Creation -- may come to pass over the course of hours or years, often tending towards the former. There are many stories of people jotting down ideas pertaining to the eventual formation of a company, talking it over with a few others, then heading down to the county clerk's office to fill out official paperwork.

Phase II - Maturation

Stage 4 - Testing the limits - Are we capable of also doing this...

Stage 5 - Staying the course - Why don't we just keep doing this instead

The second phase -- Maturation -- seems to require months, if not years, to be fully realized. Those original ideas jotted down prior to forming a partnership, or incorporating, may not work out as planned then are adapted or discarded. A time of finding their niche comes to pass.

Phase III - Rejuvenation

Stage 6 - Re-Identify - This doesn't seem like such a good idea anymore...

Stage 7 - Re-Formulate - How can we stay in business given our strengths...

Stage 8 - Re-Establish - Let's give it a try...

The third phase -- Rejuvination -- may never come to pass or may be quite unsettling to the company and interested third parties (e.g. stock holders, customers, board of directors...). It may be far more difficult than the first phase but quite like it in effect. It could require undoing and/or rethinking long established habits and expectations, expectations that may no longer align well with prevailing conditions.

Summary

It seems that those companies that make it through the first phase without difficulty may meet their first real challenges in the second phase and, many times, fail. Likewise, it seems that those companies that make it through the second phase without difficulty may meet their first real challenges in the third phase and, many times, fail. Never running into difficulties, though not impossible, seems to be the exception to the rule.

While this may be an over-simplification, it none-the-less establishes a reasonable framework within which to observe small business development.