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Orlando Business Lawyer / Blog / Business Start Ups / Differences Between Startups And Small Businesses

Differences Between Startups And Small Businesses


When starting a business, it’s important to use the right terminology. Is your business a startup or a small business? Aren’t they the same thing?

They may sound similar, but they have some differences. While both are new companies, each has different goals. Here’s a closer look at both of these terms.


A startup runs at warp speed from Day One. This type of business is looking to get profitable quickly. In the beginning stages, they are experimenting with various models to determine what works best to boost revenue. They’re looking for investors to help them raise capital so they can accomplish their goals quickly.

Startups want to move quickly because they believe they have the “next big thing.” They have a product or service that is in high demand and hope to become a rapid success. They are looking to scale up quickly and can easily go on to become a publicly traded company. However startups have a high risk of failure because they can easily crash and burn once the money runs out. On the flip side, they can be highly successful. Apple and Microsoft are examples of companies that were formerly startups.

Small Businesses

Small businesses are just what the name implies. They can be sole proprietorships, partnerships, or privately held companies. Whether or not a company can be considered a small business is determined by the number of employees and the amount of revenue. The government considers a company to be a small business if it has under 1,500 employees. However, most small businesses have much less — under 20 employees.

Unlike startups, small businesses are not looking to grow quickly and become dominant. They are independently owned companies trying to maintain a stable income. The risk of failure with a small business is much less than that of a business startup, making them sustainable for the long run.

Small businesses stay privately held. They are not looking to scale, although some small businesses may have multiple locations, particularly in a small town. Many small businesses stay afloat for many decades, as they are passed down from one generation to the next.

Reaching Your Goal

Whether your company is a small business or startup depends on how you want to reach your goal. Do you want to stay small and local? Then a small business is the way to go. Looking to disrupt the industry and grow very quickly while taking risks? Then a startup may be right up your alley.

Learn More About Business Startups 

Startups and small businesses both have the ability to be successful. The main difference is how you plan to run your business.

Businesses require a lot of time and energy. They also need to ensure they are following all laws and regulations. Orlando business startup lawyer B.F. Godfrey from Godfrey Legal can guide you through the process. We have decades of experience helping entrepreneurs realize their dreams. To schedule a consultation, fill out the online form or call (407) 890-0023.



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