The Difference Between A Startup And Small Business

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What is the difference between a startup and a small business?

As the English language contains many confusions about its right tenses and uses of verbs, in the business language the biggest confusion is exactly this – Small business or a startup?

Small businesses are very often misunderstood for startups and vice versa.

However, the truth is there are a lot of major differences between these two.

So, let’s jump right into the contrasts:


1. Funding

When it comes to the relationship with funding, startups, in fact, require a different financial investment than most of the small businesses. Therefore, small businesses mostly reply to grants and loans while the startups tend to rely on their investors’ capital.

2. Growth

This is a very important point and these entities think about growth much differently. Keep this in mind: Startups are designed to grow faster. What I mean when I say a design is that the startups always have something they can sell to a large group of people or a specific large market.

Whilst, on the other hand, most of the businesses cannot. Everyone who owns a business knows that you don’t really need a big market to operate a business. You just need to properly serve those who you are targeting. To simplify, startups are meant to scale. Small businesses are not. As the entrepreneur, Paul Graham said ”That’s the difference between Google and a barbershop. A barbershop doesn’t scale.” I hope this makes sense.


3. Duration

The basic organizational function of one startup is to search for a scalable and repeatable business model. That’s why startups are temporary and the small businesses once stabilized and adjusted for its perfect market, can exist forever.

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Author

Imaeruaka Joseph .N

Imaeruaka Joseph .N

I believe in sharing wisdom with others. Utilizing life to its maximum and blogging is a call for me . Who is Imaeruaka Joseph? Imaeruaka Joseph also known as Inbuilt-Wisdom JIN, is an indigen of Amesi town, in Aguata local government area, Anambra state. Skills? 1. Copy writer (specialty; sales copy) Currently works with Sky blazer ventures, Niger standard industry ltd, Azodo fish farm. 2. Content creator (short stories, articles, memes and poems) Currently works with Andora Novella, Tis foundation and Medium. 3. Author at Amazon (kindle direct publish) Imaeruaka Joseph up to date has six books published on Amazon. -Marriage forum -Wisdom from its inbuilt -The Compile -Did i have sex? - a memoir -Maintenance of some basic electrical components -The poem stream. Reach out to me via email, [email protected]
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