Startup VS Small Business

In recent years, startups have made their presence much more noticeable, as they are more widely known. But when is a company considered a startup and what are the elements that differentiate it from a start-up small business?

A startup is considered to be any business that follows an escalating business model. Startups are created to provide an innovative response to a problem that can scale up (geographically and non-geographically) by harnessing technology and business thinking. These companies are targeting finance and looking for investors to grow rapidly.

According to Steve Blank, an American entrepreneur, academic and startup expert, startups are organizations created to look for a business model that is repetitive and scalable, which is their main difference with small businesses.

On the other hand, small enterprises are considered to have fewer than 50 employees and/or have much less income than 'normal' enterprises.

This is one book that I recommend you to read The Lean Startup. "Most startups fail. But many of those failures are preventable. The Lean Startup is a new approach being adopted across the globe, changing the way companies are built and new products are launched."

But what are their main differences?

• Innovation

Small businesses do not always focus on innovation, but mainly follow a pattern of other companies in the same industry. In startups, by contrast, innovation is the dominant element. Aiming to solve a problem that exists or to develop something existing, they set as their main objective the uniqueness and the new.

• Development

The aim of each business is, of course, to develop. In small businesses growth comes second as profit is the dominant cause. Startups, on the other hand, set their own objective of developing and dominating the world and in as short a time as possible.

• Profit

Small businesses are profit-oriented and are something they want from their very first day of operation. On the contrary, startups have as a priority the creation of their product or service and acceptance by consumers. When that happens, then significant profits will come for the company.

• Financing

In small businesses the initial capital comes from the business owners themselves, from their friends and relatives and through borrowing. Moreover, the aim is to be able to stand autonomously and repay their initial debts. On the other hand, startups, although converging on initial funding with small businesses, rely on crowdfunding and investors.

• Risk

The risk varies depending on the type of business. Small businesses are less likely to risk because they are better known for the ways in which they can reduce it than startups.

If you have your idea ready, you can develop it in simple steps. Just start thinking like an Entrepreneurs. Read our other post here.

Until next time like and subscribe!


NOTE: This post may contain affiliate links. Please read my disclosure for more info. This adds no cost to you but it helps me focus on giving as much value as possible in every single post by being compensated for recommending products that I love using.

32 views0 comments

Recent Posts

See All