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HomeBusinessStartup Vs. Small Business: What's the Real Difference?

Startup Vs. Small Business: What’s the Real Difference?

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The two terms startup and small business are often confused with one another by most people. There is a world of difference that most people do not understand between these two terms. We look at some of the major differences that separate these two from one another.

Related Post: The Formula For Small Business Success

Startup and small business scope

A startup has a bigger scope on improving and they are generally not limited to a few customers. However, the scope for a small business is not large and is limited to a few customers. In other words, there is a limit on how big the business can grow.

  • Innovation

Essentially a small business does not have to be one with providing a service or product that is unique. They are more likely to provide customers with products or services that are common with other companies. A startup on the other hand is unique and is more inclined towards creating a service or product that is unique with them alone.

  • Profits

A small business would be planning on getting profits right from the start of the time they engage in business. However, a startup on the other hand will create a product that is unique and wait for it to get accepted in the market.

Also Read: how startup incubator makes money?

  • Technology used

A startup firm would have technology as an integral part of its development and growth. A small business on the other hand does not rely so much on a specific technology that is new or created by its staff.

  • Investment

A small business typically uses the money that is invested by one person or a few people. The startup on the other hand has crowdfunding which is associated with family or firms to establish their business.

  • Management and employment


In a small business people are hired as and when it is required by the company. With a startup, there are people hired as required for each of the tasks. In other words, they are hired to play specific roles and responsibilities.

Also Read: How Can the SBA Help Your Struggling Business

  • Exiting Strategies

The exiting strategy for a small business is to give it either down to the family or to sell it. However, for a startup, they are usually sold to another company through a large deal or sold over to an IPO.

Apart from it there is virtually no limit for a startup to grow whereas with small businesses they are limited to a certain extent. These are the significant differences that set these businesses apart from another.

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