The Difference between a Small Business & a Start Up

In the world of business, words like small business & start-up create quite a buzz. There is a lot of confusion when it comes to their definitions. Many people are mistaken and hence use them interchangeably. But apparently, these two forms of business differ in their respective nature and functions. Let’s look at their key difference so there is no room for doubt from the next time.

Growth Expectations

  • Start Up- A start-up starts with a vision of exponential growth in a defined period of time. They are designed to grow fast and target large markets. They either soar high or sink down fast.
  • Small Business- Small Business on the other hand have high resilience. They need not focus on high growth measures but function on a constant scale throughout without shutting down.


  • Start-Up- They seek large scale funding and approach venture capitalist & angel investors.
  • Small Business- They are often self-funded or financed from family initially and then later seek funding from bank and other financial institutions.


  • Start-Up- They start with innovative & new ideas and product lines. They aim to provide something unique to their customers which never existed before.
  • Small Business- They stick to traditional products & services with little or no innovation. They are generally the production or manufacturing unit of the economy.

Exit Strategy

  • Start-Up- They have to start with an exit strategy. Pitching for VCs without the planning for an end is useless as they are most likely going to lose it.
  • Small Business- They do not have any exit strategy. They run for years and from generation to generation.

I hope you are able to figure out now whether your business is a small business or a start-up. J

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