Why do you need to build a Small Business instead of a Startup?

I am sure you must be wondering at this point, how is a startup different from a small business, and are they not one and the same thing? Well, the answer is Yes and No, and here is why.

Everyone wants to have their own business, sell products and services, and do things that would change the world for good. No matter what business ideas we have, we all get stuck on a single question, and that is will it scale? The moment we realize that the brilliant idea circling our thoughts cannot scale up to million users instantly, and our dream to swim in the money just like Uncle Scrooge is hard to realize, we abandon the idea, and by doing that we are doing no good to anyone.

A small business and a startup sure have similarities but they go separate ways depending on how you look at them. The factor of scale is what differentiates a startup from a small business. You might ask, is it wrong to have your own startup? Of course not, but the main objective when you are starting your company should be to focus on building a sustainable and revenue-generating business, rather than chasing the near-impossible dream of billion-dollar valuation. This is the biggest difference between a startup and a small business. While startups are always concentrated on top-end revenue and growth, small businesses are motivated by profitability and stability on a long-term basis.

The reason behind why everyone wants to grow with a startup is mainly because of the Silicon Valley hype, where everyone is trying to come up with or invest into the next big thing, regardless of whether it is a disruptive gaming app like Pokemon Go or an innovative service capturing the market like Uber. Each of these startups started off as an innovative idea that is expected to monetize in future, but their main focus is on exponential growth even if that comes at the cost of selling equity. Startups are definitely great and if you have an innovative idea then you must definitely go ahead with it, but remember, the chances that your company will become the next billion dollar idea will be slim because it is a fact that 9 out of 10 startups fail.

However, having a small business is a complete game changer because here the main goal is to have the foundation for a successful business and serve the customers in the best way. While a startup-unicorn, as it is commonly known, would aim to grow big and fast by getting most of the investments, a small online business would simply grow within the limits, serve its customers and gain profitability.

It is wise to understand early on that not every idea can grow exponentially as to be the next Facebook or Instagram, but can surely build a successful and profitable business by providing a great product or a service to the people. Here are 4 reasons why you must seriously consider starting a small business instead of a startup.

Small  Poor

It is a misconception if you believe that starting a small business won’t make money. Just because you choose to start a small business, does not make you less of an entrepreneur than any of those who build startups. Well, definitely you might not make as much as those guys would, but it definitely doesn’t mean that you will die poor. Having said so, there would certainly arise occasions that would bring in opportunities to build your business into a billion dollar company. In fact, if you would look at some stats you will know that startups are infamous for losing money and that too in millions. A small business means lower overheads, lower cash burn rate, and you will be making timely revenue that will further lead to the growth of your business. As against would be a startup, where you must wait for more users to use your product or service even before you can start making real profits. So don’t equate small business to being poor, but they only mean that you have reasonable intentions on the scale.

People are Important

No matter what kind of business you get into, people matter the most. When you stay small with your business, you have better opportunities to focus on your customers and offer them ideal service that they desire, rather than centering on expansion and aggressive growth of the company. Small businesses also help in spending more time with people that matter to your business. When you have a small team of employees, they will be a bigger priority because small businesses are about people.

It is hard for people to realize that small business truly has greater opportunities than large organizations. They can tailor an experience for each of their customers, just like you would get greeted at your neighborhood coffee shop by your name when you keep visiting them, but that would rarely happen at your local McDonald’s. This is the main reason that people still love to shop and buy stuff at small businesses as they offer a unique experience. There are simply too many startups these days, but when this bubble bursts, you will be glad to have been that person who started up with a small business that is pretty successful.

You won’t stay small forever

No one would say no to grow their businesses in their sane minds, especially if there were any lucrative opportunities. In cases when you do want to grow, you will have better chances when you have a successful and profitable business. Small business will help you have an established product with safe cash-flow that in turn would be an attractive prospect for future investors. But even if you don’t find investors, you can fund the growth from your own pocket as well, as you would have made good profits. And again, you will have knowledge and learning of running a business that will only make your job easier.

Owning your Business better than Working for your Business

Most of the startups give up the majority of control and in some cases almost everything to receive funding. Would you be okay with owning not more than 10-20% of your own company? Just like many startups you might say yes to that especially if that 10% is worth millions. But in reality, if you don’t have the next billion dollar idea then losing control over your own company must be worth it. On the other hand, small businesses would be owned by one or two individuals who would share the profits of ownership once all the debts are cleared.

So to think of it, whether it is a small business or a startup, they don’t have much of a difference except for the fact which involves the scale of the business. Big startups need big bucks to push those ideas. It is no doubt that when these ideas work, you will become billionaire overnight but if you know that your idea cannot make it that big then perhaps you must think over of starting your small business rather than startup.


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I'm a self confessed foodie, king of the kitchen, wannabe anthropologist, technology evangelist , curious, inquisitive & experimental entrepreneur at @DigiLands and an adrenaline junkie. Love spending time with my wife & two young children and faulty KitKats that consist purely of solid chocolate.