Quora Answer: Besides the Way They are Funded, How Do Startups & Small Businesses Differ?

The following is my answer to a Quora question: “Besides the way they are funded, how do startups and small businesses differ?”

The primary intent of a start-up is the exit.  It is about building a foundation that can be scaled up, to bring in more funds to generate more revenue.  A start-up, as the name suggests, is the beginning of building a vehicle to carry out a specific business.  At the end of it, the founders have either sold their stake and moved on, or they have taken the company public, which means they are no longer sole owners.

A small business does not have such ambitions.  The intent of the owner is to generate revenue, so that the business owner can take profit out.  It may or may not be a company.  A small business does not have the express intent of seeking funding to scale up the business.  Often, the nature of the business process precludes any such scaling up.