With the advent of companies like Daraz, Uber, and Pathao, it’s no surprise that the term “startup” has quickly entered the corporate language. Most people familiar with startup business and startup culture work in the tech industry or live in a tech hub like Silicon Valley or London.
Despite this, many individuals still don’t comprehend the distinction between a startup and a small business. But how do they differ?
What is startup?
We generally think that Startups are typically online or technology-oriented businesses. The basic idea of a Startup is that it can easily reach a large market.
What is small business?
A small business is a privately owned corporation, partnership, or sole proprietorship. It has fewer employees and less annual revenue. It is not a corporation or regular-sized business.
Difference between startup and small business
The future of Startup is to cover a large market. On the other hand, you don’t need a big market to grow into while operating a small business. For a small business you have to cover the market within your reach in an efficient way.
Startups are different from traditional businesses because the aim of startup is to grow fast but the initial funding comes from the founders or their friends and families.
Scopes of business:
How far will your business expand?
Small businesses progress within the parameters defined by the business owner. In other words, you restrict the company’s expansion and concentrate on serving a select group of clients.
A startup, by definition, places no constraints on its growth and is intent on capturing as much market share as possible. You are prepared to expand your impact until you achieve industry leadership.
Growth rate of Business:
How quickly will your business expand?
While a small business should certainly grow quickly, a primary objective should be profitability. When a business establishes advantages, it expands as and when necessary.
A startup should always grow and develop a replicable business model in the shortest amount of time possible. You should be able to replicate the company’s success on a global scale.
How long is a business considered a startup?
Actually, A startup is a young company that is founded by entrepreneurs to develop a unique product or service and bring it to market. It is not more than 3-5 years old.
Can you call every new company a startup?
If it has long vision with large market, you can call the new company as a startup. Initially the company takes some time to boost up. But it has an intention to grow large beyond the solo founder.