![]() In many ways, startups are designed to operate short-term (three to five years). That lies in sharp contrast to the business model espoused by a startup. Small Business Administration (SBA) describes a typical small business as being independently owned and operated, organized for profit, and not dominant in its field. They’re looking to create steady, long-term revenue. ![]() They’re not looking to change the world or revolutionize the way they do business. Small business owners fill a gap or provide a product within an existing market. Take customers from existing, competitive companiesįor a small business, the model is quite different. What Are The Differences Between A Startup And A Small Business?īusiness model - also known as intent or strategy- describes the goals of the company and how long it will take to reach those goals.įor a startup, the business model is to grow into a large business as quickly as possible - often skipping small-business status completely. In the next section, we’ll dive deep into the differences between a startup and a small business to help you identify where your company exists within the market. These definitions, though, only scratch the surface of what it means to be a startup and what it means to be a small business. But those are reactions to the market, not in-born traits as they are with a startup. The small business may, of course, open its doors and have zero customers, need significant investment to stay solvent, and, eventually, forge its own business model. Small businesses are designed to generate revenue from day one, function without major investment, and work within existing business models (in contrast to a startup which is designed differently). Instead, they adopt a tried-and-true model that works from day one so they can bring in revenue immediately.Īn important caveat here is the word designed. The common definition of a startup - a newly established business - actually describes small business better.Ī small business is a self-sustaining operation designed to:Ī typical small business isn’t designed to create a brand new way to work.
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