# Startup vs Small Business

By [Bayka](https://paragraph.com/@bayka) · 2023-01-17

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What is the difference between a startup and a small business? I believe the main difference is the potential for rapid scaling. When I think of startups, I think of businesses that have the ability to scale quickly and expand beyond a specific local market. Many people assume that startups are focused on creating IT products, but that's not always the case. A startup can be any business that has the potential for fast growth.

But the more interesting question is - to scale what? Revenue? Profits? For me, the most important thing when it comes to startups is the ability to make a significant impact on the world. I measure this impact by the number of users whose lives are improved by the products we create. This is why I'm so passionate about startups and why I decided to [stop doing consulting work](https://mirror.xyz/bayka.eth/WjRYi8JkxdVRVjjqSMCHKpUUuAX6UpQnU0b5EBtI-a8). That's why, by the way, startups are often measured by their growth rates. It's a way to understand how fast a business is scaling.

I wish I had understood this earlier on in my journey as an entrepreneur. Thus,

Advice to my younger self
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1.  Understand the importance of external investment for fast scaling of a business - at least, in 2 of my startups I didn’t realize that and now regret it.
    
2.  Clearly communicate the nature of your business (startup or small business) to co-founders and investors.
    
3.  If it is a startup, design it with fast scaling in mind and choose the appropriate method for achieving this goal.

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*Originally published on [Bayka](https://paragraph.com/@bayka/startup-vs-small-business)*