What is the difference between a Startup and a small business?
Before I did research about what a startup is ? I assume that it’s a small business.
But it’s not correct. Here are reasons why?
1. Innovation
-What is the uniqueness of a kirana store near to your home? Nothing right.
You can easily set up kirana shop following out-of-the-box solutions.
-But, For startups, innovations are of core value. Most successful startups are finding innovative solutions for existing problems.
So, Startups are aimed at creating new things or enhancing existing ones.
2. Scalability
Small business shops develop within the scope determined by a business owner.
They don’t have future goals and plan for increasing their market value or product quality.
Startups are focused on scalability and fast growth. All startups dream of becoming leaders in their business domain.
3.Growth Rates
Let’s take an example of a small coffee shop in your home town.
This shop aimed at collecting the money obtained from the very first day of establishment.
The closing gain of the shop depends on the ambitions of the owners and their plans for the future.
They don’t need a huge market to run a business — they need a free domain and the possibility to effectively target their every day customers.
Let’s take another example who started their business in the same product. It is Cafe Coffee Day. Everybody knows it.
Initially CCD is a startup. It spend plenty of time selling for a COFFEE. Their prime objective is to create a COFFEE that people will love.
Now CCD serves 1.6 billion cups of coffee annually in six countries also in Internationally.
A product that will crack the market. Only if this objective is achieved, a startup will earn millions.
4.Financing
Finance is like a heart for any business
To set up a small business, personal savings are enough. That is completely in your control, How much you want to invest.
But startups are initially financed by relatives or friends.You can pitch your idea. Crowdfunding is becoming popular as well.
Once everything is in track, a series of investors will show interest at your startup.
You should bear in mind that every single startup requires continuous investments whereas investors are waiting for high payoffs.
5.Technology
Small companies have no need for specialised technologies. There are a lot of out-of-the-box solutions to use including marketing, bookkeeping, etc.
Technologies are usually the main products of startups. Even if it is not so, startups can’t do without new technologies to gain fast growth and scalability.
6. Life cycle
Let’s say some crazy numbers about these two
Around 30% of small businesses close in the first three years. Another statistics say that around 50% fail in the first 4 years.
Around 90% of startups close in the first three years.
7.Team and Team Leaders
In a small business, it is quite clear how many employees you need to operate within a company of a given size.
Startup leaders have to obtain strong leadership qualities to motivate their in-house, onsite, or offshore team members -
as this type of business is continuously growing.
8.Lifestyle
As compared to startups, small businesses face fewer responsibilities and risks.
That’s why your work-life balance will be perfect. However, initially, every business requires more efforts and time.
If a startup engages investments of other people, it has to earn the profit as soon as possible.
You will have no time for ramp-up. And there’s no sense to speak of work-life balance at all.
9.Strategy
Speaking about any successful business, you are able to entrust your business to your children or sell it.
Startups are usually shifting to the next stage — a large-scale deal.
As you can see, business is much easier to run than to launch a successful startup as your risks are more obvious and mathematically sound.
However, it’s up to you to decide what works best for your ambitions. In case you are considering startup, learn about useful startup metrics not to fail.
You never know tomorrow will bring.
