Beginning an entrepreneurial venture is never an easy journey. Having the drive, passion, and determination to start something new can be just as equally rewarding as it is challenging. When starting a new business idea, many wonders exactly what they are when they begin and where they are headed – although having your goals focused on maintaining and growing your idea to new lengths should be an entrepreneurs main focus – establishing your team as a start-up or small business is a huge accomplishment to a new entrepreneur or team. There exist fine lines between what we consider a small business and a start-up and you may see these words being used interchangeably – however, here are Mako Design, we’ve worked with hundreds of startups, small businesses owners, inventors, and innovators and have a clear idea about what the difference between a start-up and small business is. To help bring more clarity to new entrepreneurs, we’ve used our experience as a Toronto invention help services to help define our idea of a start-up vs. small business below!
What is A Start-Up?
To our Toronto invention help services, a start-up can be defined quite literally by its name itself – the start to a new idea. Startups are typically defined as a team, group, or partnership that exists to begin and establish a strong business plan in order to start, create, or fulfill a service to people. Startups are known for using grants and meetings with stakeholders who may invest in their idea to produce a product or service that the start-up projects will become successful and grow. A startups main goal is less focused on building or maintaining a successfully running business, but more about doing the right market research to build a successful product or service that will sell. Those who create start-ups focus more on the product they create and put their start-up idea in the eyes of investors – rather than a consumer audience – in order to either receiving funding or completely sell their idea. In a sense, a start up can solely exist as an investment for bigger businesses or corporations. Some start-up creators may move on to their next big idea after successfully starting and selling their idea to a bigger business – nonetheless, a start-up differentiates from a small business due to the nature that startups don’t necessarily on starting a long-standing business, but to solely create and bring a vision to life – whether that be a product or service.
What Is A Small Business?
More often than not, you’ll be surprised by how many small businesses exist in comparison to larger businesses. However, based on our Toronto invention help services, the lines between what defines a “small business” vary. Although the definition of a small business can be based on a number of different variables, most commonly, a small business can be defined by the number of employees and average annual receipts. The number of employees a small business can have typically varied from less than 250 to 200 employees or from having a maximum of 1500 employees. The reason why these numbers are drastically different is that the definition of what is considered a small business depends on which industry the small business is in.
Additionally, a small business is run by either privately owned corporations, partnerships, or sole proprietorships. Another way to separate a small business from larger businesses is by their average annual receipts which range from 750k to 38.5 million. What may surprise people is how much small businesses dominate the economy as 99.7% of U.S firms are made up of small businesses, in which 89.6% of these small businesses have fewer than 20 employees. These numbers can be attested to the fact that there are a lot of benefits to small businesses!
Which is Better for my Business?
Determining whether you’re going for starting a startup vs. a small business is entirely up to the entrepreneur. One must always consider what your immediate and future goals are in relation to your idea. Some questions our Toronto invention help services ask our clients include: Do you want to bring your idea to investors? Do you want your idea to grow? What does your idea have to offer? These some questions that an entrepreneur must ask themselves before stepping into the start-up and small business world. Knowing your goals and asking yourself these questions is not the only key to having a solid foundation to build ideas and goals off of, but also helps you navigate yourself through the hard competition that exists within the small business and start-up world. If you imagine yourself partnering up or working with investors for shares in your idea, product, or service, consider becoming a start-up first and seeing where that can lead you. However, if you are more interested in ownership and growing your idea, product, or service, under a brand – a small business venture may be more ideal for you. Ultimately, the decision is based on your goal and vision that you see for yourself, your team, and your idea.
If you have a great new invention and you’d like to learn more about this process, get in touch with MAKO here and visit our website to find out more. Feel free to give us a call at +1 (888) 806-6256 (MAKO) and we can set you up on a call with our product analyst!
MAKO Design + Invent is the original firm providing world-class consumer product development services tailored to small businesses, startups, and inventors. Simply put, we are the leading one-stop-shop for developing your physical product from idea to store shelves, all in a high-quality, cost-effective, and timely manner. We operate as one powerhouse 30-person product design team spread across 4 offices to serve you (Austin, Miami, San Francisco, & Toronto). We have full-stack in-house industrial design, mechanical engineering, electrical engineering, patent referral, prototyping, and manufacturing services. To assist our startup and inventor clients, in addition to above, we help with business strategy, product strategy, marketing, and sales/distribution for all consumer product categories. Also, our founder Kevin Mako hosts The Product Startup Podcast, the industry’s leading hardware podcast. Check it out for tips, interviews, and best practices for hardware startups, inventors, and product developers. Feel free to Contact Us anytime for help with your project.