The Difference Between Startups and Small Businesses

Over the past year or so, the trend of accelerating startups has really taken off in North America. As of June, there are over 100 accelerators and incubators in Canada alone. 

This sudden wave of organizations dedicated to fostering new companies caused the words "incubator" and "accelerator" to quickly become interchangeable; this is fundamentally incorrect, however. So we looked at the differences between the two types of programs.

Now it seems there is a similar confusion between startups and small businesses. Is a startup not a small business? And are small business owners not entrepreneurs?

If you want to start a company, it's tremendously beneficial to understand whether you're launching a startup or a small business: they are, indeed, fundamentally different.

Neil Thanedar suggests in Forbes that small businesses focus on dollar amounts and emphasize profitability and stable long-term value. Startups, on the other hand, focus on developing great products and building huge customer bases, emphasizing top-end revenue and growth potential. Those are the core differences in a nutshell.

For more insight, Steve Blank, whose history of entrepreneurship is incredibly extensive, packs a staggering amount into this topic in two minutes on YouTube.



So there you have it. Small businesses and startups are both launched by entrepreneurs, but the companies themselves operate on different fundamentals. The founders have different goals, personally and professionally. And there's nothing wrong with either approach.

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