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Startups v. Small Businesses


Financial Fitness April 2016Not all startups are small, and not all small businesses began as startups, but these two entities are often mistaken for each other. Karen Stern, Partner in Charge of the Entrepreneurial Services Group, provides some insight on the differences between the two, as well as some similarities, in this month’s “Financial Fitness,” as featured in Small Business Monthly.

Now is the time to think…small. Small businesses and startups are thriving throughout the St. Louis area, and since they can be viewed as similar entities, it’s important to understand how they differ. (Since no two startups, nor any two small businesses, are alike, these are generalities for the industries as a whole, rather than specifics.)

  • Main focus. Startups tend to focus more on funding, finalizing the product design and beta testing, while the small business concentration tends to be on increased revenue, target marketing and expanding the product.
  • Entrepreneur’s perspective. Startup owners wear multiple hats; they commit themselves to all facets of the company, especially funding. Small business owners have clearer job responsibilities and provide more supervision and delegation.
  • Stage of growth. Startups are typically in the creation stage of something unique that doesn’t have much competition – either a new product or an innovative service. Small businesses have an established product and generally operate within that focus, although not always.
  • Financial stability. Startups rely on existing investors, new investments and other non-selling sources. Small businesses are self-funded and working capital stabilized, usually due to utilizing financial institutions.

Startups and small businesses differ in many ways, but not when it comes to finances. From QuickBooks and check writing to nexus laws and payroll, your accounting process should grow with your business from startup to small business. If you have questions about where your business is now, or where you’re going, be sure to contact your accounting, tax or business advisor.

Click here to download our Startup Community Survey Report, “Taking the Pulse of the St. Louis Startup Community.”



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