Home StrategyCritical Business Concepts Small Business Owner or Startup Entrepreneur: Which one are you?

Small Business Owner or Startup Entrepreneur: Which one are you?

An image of a man facing two paths small business owner or startup entrepreneur

Do I become a small business owner or startup entrepreneur? The eternal question on every entrepreneur’s mind.

team of young entrepreneurs working - small business owner or a startup entrepreneur

Does it really matter which one you are?

Does identifying the type of entrepreneur you are have direct bearing on how successful you become down the line?

Moment of truth: I honestly don’t know. But, here’s something I’m sure of –

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– “identifying early on the type of entrepreneur you are will help define the path for your business. It will help you know what to expect, how to source for funding and help manage your expectations. It also helps you define success in your own terms.” – Jared Hecht, CEO Fundera

The best place to start in identifying the type of business you’re running is to understand what each term means.

Does small business mean the same thing as a start up? If no, are there tangible differences between both terms?

We answered these questions in this piece…

…but before we dive in, let’s first take a look at what makes a small business – small business; and a startup – startup.

What is a Startup?

A startup is a young, volatile concern with no reliable business model. Think of it as a bunch of young idealists with an idea they hope would catch-on and make them tons of money.

Often, these founders don’t have money. Hence, they are out pitching and wooing investors to give them the cash they need to grow, improve on their idea, and market their product.

This explanation might seem a bit simplistic when compared to the real world; but it gives you an idea of what a real startup is.

A “startup” is expected to scale very fast or to fail very fast, and this implies that the future of startup is uncertain.

This is because, the business is still trying to learn the needs of its target audience, how much their prospective – and existing – customers are willing to pay for its products or services, and how to earn a  lot of profits by satisfying a specific need of their target audience.

It is not too surprising to learn that even the founders of startups sometimes find it challenging to pinpoint their target market – that is, they are not super-sure who their customers are.

What is a Small Business?

A small business – according to the U.S. Small Business Administration (SBA) – is an independently-owned entity that is organized for profit, is operational, self-sufficient and yet not dominant in its field.

A small business is set up to start making money from day one. It doesn’t rely on investors’ monies to run.

Key takeaways from these definitions: small business and startup

The primary aim of a startup is to disrupt the market. This objective is often achieved by implementing a high impact and scalable business model

A small business owner on the other hand quietly enters a market and works to secure a share of the local market.

Other differences between a startup and small business include:

Rate of growth

Startups focus on growing within a short time while also ensuring it can replicate its success in other markets and or on the global stage.

A small business, on the other hand, is designed to grow fast as well but with one goal in mind: to make a profit. Growth occurs organically in small businesses as a result of becoming profitable and an increasing revenue base.


Innovations are the backbone of a startup since the business model hinges on creating something new and groundbreaking that will disrupt the existing market.

Small businesses, however, are not too concerned about being unique. There are many other businesses out there trying to make money and impact people’s lives with positive experiences via their services and products.


Startups play the long game. It can take years before a startup turns profitable this is because they are being run with investors’ money and not under undue pressure to turn profitable as long as they show signs of growth.

A small business’s focus is on getting the first sales and the next. It is structured to seek profitability right off the bat.


A startup continually develops, improve, and evolve their services or products so that it can efficiently be ready for launch and deployment in the market. This is achieved via prototyping, early tests, experimentation, modeling, frequent fast fail, etc.

Small businesses are usually only concerned about establishing a product or service and launching it immediately. The service or product is rarely improved on, and if there is any at all, it occurs at a snail’s pace.


Startups thrive on the latest advancements in technology; in fact, the product or service itself relies heavily on technology. Without it, startups will not exist. Startups ride on new technologies for scale-up and fast growth.

A small business does not depend so much on technology, though it could be used to facilitate one or two of their products or services. Technology is usually applied in areas such as marketing, accounting solutions, etc.

To wrap up…

Regardless of the type of business you run, whether a startup or small business, you are an entrepreneur.

Your passion, zeal, drive, and energy gave birth to an economic entity that’s solving people’s problems and of course, growing the economy.

However, understanding the type of business you run will help you make critical decisions that will impact how successful you become.


  • Sam Steve

    Sam Steve is a strategic content marketer and founder of Emira Digital Publishing. He helps clients grow their online presence by writing primarily about digital marketing, SME growth hacking strategies, and productivity. Connect with Sam on social media:

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