What is the Difference between a Startup and a Small Business?

A startup is the very initial stage of a business while a small business has already gone through the startup phase. Usually, a startup is financed by the founders. On the other hand, small businesses try to collect funds from investors.

Key Takeaways

• Startups are businesses that are in the first stage of operation; on the other hand, small businesses are more established
• A Startup might be able to generate some profit or not but a small business usually make some profit
• It is very difficult for a startup to manage the funds but a small business can easily collect funds from various sources
• The success rates of startups are very low compared to small businesses
• Usually, a startup doesn’t have any business formation while a small business can be a corporation, partnership, or sole proprietorship
• Within the three years of establishment, 92% of startups are shut down compared to 32% of small businesses     

What is a Startup?

According to Wikipedia –

“A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to become registered, startups refer to new businesses that intend to grow large beyond the solo founder. In the beginning, startups face high uncertainty and have high rates of failure, but a minority of them do go on to be successful and influential.”

So, basically, a startup is a type of small business that is in its initial stage. In most cases, a startup is funded by the founder or the founding members. The owner of a startup is known as an entrepreneur. The main idea of a startup is to establish a business therefore initially startup companies have high costs and low revenue. Some startups work with existing products or services while others try to create new products or introduce new services to the market.

What is a Small Business?

According to Wikipedia –

“Small businesses are corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as “small” in terms of being able to apply for government support and qualify for preferential tax policy varies depending on the country and industry. Small businesses range from fifteen employees under the Australian Fair Work Act 2009, fifty employees according to the definition used by the European Union, and fewer than five hundred employees to qualify for many U.S. Small Business Administration programs.”

So, a business can be defined as a small business based on quite a few factors like the number of employees, total revenue, office space, and many more. But in most cases, the size of a business is determined based on the total number of employees. Moreover, a small business collects funds from various sources like loans, self-finance, forming partnerships, angel investors, etc.

Differences between a Startup and Small Business

Startup	Small Business
The growth rate of startups is faster	The growth rate of small businesses is slower compared to startups
The main aim of a startup is to introduce a new product/service in the market	The main aim of a small business is to create a long-term and reliable income stream
Startups are financed by the founders, their family members, friends, etc.	Small businesses are financed by various financial institutes, investors, self-investment from the owner, etc.
The business operation cost of a startup is higher compared to small businesses	Small businesses try to minimize their business cost to increase their profit therefore, the business operation cost of small businesses are lower compared to startups
The risk factors of startups are higher compared to small businesses	Small businesses are somewhat established so they have fewer risk factors
Revenue generated by startups is lower compared to small businesses	Small businesses make more profit than startups
More than 92% of startups are shut down during the first three years	32% of small businesses are shut down during the first three years

Average Salary of Various Job Titles at Startups in the USA

Job Title

Average

Software Engineer Lead Software Engineer Sr. Software Engineer / Developer / Programmer Account Executive Mechanical Engineer Principal Software Engineer Process Engineer Product Manager, Healthcare Research Engineer Senior Data Analyst Senior Software Engineer Laboratory Manager Software Developer Software Engineer / Developer / Programmer Solutions Architect Sr. Product Manager, Software Staff Software Engineer Supply Chain Manager Senior Software Architect Technical Product & Program Manager Implementation Manager Front End Developer / Engineer Associate Partner, Consulting Services Business Analyst (Unspecified Type) Business Development Associate Business Development Representative Chief Communications Officer Chief Information Officer (CIO) Chief of Staff Chief Operating Officer (COO) Chief Technology Officer (CTO) Clinical Research Manager Communications Technician Control Systems Engineer Corporate Controller Design Engineer Director of Operations Director, Business Operations Electrical Engineer Head Brewer UX Designer

$102,803 $99,852 $138,264 $43,371 $157,992 $187,271 $96,359 $83,640 $124,981 $94,031 $114,532 $76,310 $58,603 $110,916 $77,647 $112,319 $142,718 $94,789 $127,123 $73,619 $74,592 $145,616 $212,654 $57,999 $49,400 $45,600 $152,658 $216,907 $104,211 $134,369 $343,660 $80,264 $52,351 $74,272 $152,429 $49,737 $110,655 $94,316 $109,948 $56,074 $97,367

Average Salary of Various Job Titles at Small Business in the USA

Job Title

Average Salary

Full-Time IT Project Coordinator FT Family Law Paralegal Buckhead FT Project Coordinator FT – Family Law Paralegal Marietta FT Administrative Assistant/Research Assistant – Perimeter Area FT Office Manager FT Accountant FT Software Sales Representative FT Corporate Recruiter Part-Time Bookkeeper Part-Time Executive Assistant – Remote Human Resources Director – Virtual Bookkeeper and Administrative Specialist Maintenance Worker Home Health Aide RN Part Time  General Counsel Senior Advisor Team Leader Business Development Consultant SharePoint Developer Chief, Port Director Construction Analyst Attorney District Director Legal Extern Program Analyst Underwriter Public Information Officer Project Manager Business Consultant Paralegal Specialist Law Clerk Supervisor Secretary Document Examiner Discharge Planner Part-Time Weekend Receptionist RN Educator/ Staff Developer Registered Nurse RN RN Supervisor RN FT Evening Shift Food Service Worker Unit Clerk Full-time COTA RN Supervisor Full Time Licensed Practical Nurse RN registered nurse Housekeeping Housekeeper Registered Nurse (RN) Manager Concierge Registered Nurse (RN) Onboarding Specialist Project Analyst Program Analyst MS SharePoint Administrator Consultant – Global Readiness Unit Financial Management Analyst Police Peacekeeping Program Support Specialist Drug Supply Reduction Program Advisor Management Analyst Management Analyst – Level 4 Junior Procurement and Program Support Specialist Office Administrator Anticorruption Visa Advisor Central America Program Assistant Construction Management Specialist Data Base Specialist Management and Program Analyst – Intelligence Section M&E Management Analyst Human Resources Specialist Principal Program Manager IT PMO Program Manager Financial Management Analyst Multilateral Affairs Program Assistant Principal Subject Matter Expert Program Analyst

$74,989 $84,472 $103,883 $79,874 $62,456 $96,084 $80,503 $111,232 $211,451 $42,507 $86,280 $194,135 $51,599 $34,621 $27,266 $83,818 $103,704 $96,016 $91,003 $86,354 $85,691 $82,960 $81,513 $80,479 $79,911 $76,824 $76,327 $73,100 $72,762 $72,743 $71,607 $71,429 $68,913 $57,761 $54,491 $54,096 $83,818 $83,818 $77,744 $76,284 $59,970 $83,818 $25,183 $41,355 $70,647 $93,854 $83,818 $84,286 $69,834 $27,620 $69,705 $34,986 $120,291 $71,396 $82,334 $181,248 $73,204 $98,555 $64,247 $113,269 $83,452 $131,363 $53,559 $67,982 $59,923 $47,853 $160,863 $74,266 $73,204 $123,891 $80,464 $120,557 $198,931 $74,021 $43,738 $106,257 $173,688

State-wise Average Small Business Owner Salary in the USA

Name of the State	Annual Salary	Monthly Pay	Weekly Pay	Hourly Wage
New York New Hampshire Vermont Maine New Jersey Massachusetts Arizona Wyoming Hawaii Washington Nevada Tennessee Montana Connecticut Indiana West Virginia Minnesota Rhode Island Alaska Oregon Pennsylvania North Dakota Maryland Wisconsin California Virginia Ohio Idaho Iowa Utah South Dakota Nebraska Alabama Delaware Colorado New Mexico South Carolina Florida Kansas Arkansas Oklahoma Mississippi Michigan Kentucky Illinois Georgia Missouri Texas Louisiana North Carolina	$71,923 $68,071 $66,519 $65,365 $63,662 $63,529 $62,791 $62,711 $62,515 $62,272 $61,980 $61,681 $61,493 $60,952 $60,879 $60,437 $60,315 $60,275 $59,973 $59,378 $59,326 $58,781 $58,040 $57,385 $57,259 $57,056 $56,953 $56,627 $55,982 $55,920 $55,889 $55,703 $55,574 $55,233 $55,003 $54,748 $54,336 $53,862 $53,600 $53,483 $52,606 $52,251 $51,980 $51,803 $50,503 $50,219 $50,194 $50,121 $48,289 $45,799	$5,993 $5,672 $5,543 $5,447 $5,305 $5,294 $5,232 $5,225 $5,209 $5,189 $5,165 $5,140 $5,124 $5,079 $5,073 $5,036 $5,026 $5,022 $4,997 $4,948 $4,943 $4,898 $4,836 $4,782 $4,771 $4,754 $4,746 $4,718 $4,665 $4,660 $4,657 $4,641 $4,631 $4,602 $4,583 $4,562 $4,528 $4,488 $4,466 $4,456 $4,383 $4,354 $4,331 $4,316 $4,208 $4,184 $4,182 $4,176 $4,024 $3,816	$1,383 $1,309 $1,279 $1,257 $1,224 $1,221 $1,207 $1,205 $1,202 $1,197 $1,191 $1,186 $1,182 $1,172 $1,170 $1,162 $1,159 $1,159 $1,153 $1,141 $1,140 $1,130 $1,116 $1,103 $1,101 $1,097 $1,095 $1,088 $1,076 $1,075 $1,074 $1,071 $1,068 $1,062 $1,057 $1,052 $1,044 $1,035 $1,030 $1,028 $1,011 $1,004 $999 $996 $971 $965 $965 $963 $928 $880	$34.58 $32.73 $31.98 $31.43 $30.61 $30.54 $30.19 $30.15 $30.06 $29.94 $29.80 $29.65 $29.56 $29.30 $29.27 $29.06 $29.00 $28.98 $28.83 $28.55 $28.52 $28.26 $27.90 $27.59 $27.53 $27.43 $27.38 $27.22 $26.91 $26.88 $26.87 $26.78 $26.72 $26.55 $26.44 $26.32 $26.12 $25.90 $25.77 $25.71 $25.29 $25.12 $24.99 $24.91 $24.28 $24.14 $24.13 $24.10 $23.22 $22.02

References:

https://www.payscale.com/research/US/Employer=Startup/Salary

https://www.salary.com/research/company/u-s-small-business-administration-salary

https://www.ziprecruiter.com/Salaries/What-Is-the-Average-Small-Business-Owner-Salary-by-State

Last Updated on December 25, 2023 by Magalie D.