The concepts of small business, self-employment, entrepreneurship and startups overlap but also carry important differences. These four concepts are often confused and their main differences can be summarized as follows:
Self-Employment: An organization created primarily to provide income for the founders, i.e. sole proprietor operations.
Entrepreneurship: All new organizations.
Startup: A new organization created for growth (and has employees).
Small Business: An organization that is small (in employees or revenue) and may or may not intend to grow.
Many small businesses are sole proprietorship operations consisting only of the owner, but many also have additional employees. Some small businesses offer a product, process, or service where growth is not their primary goal. In contrast, a company that is built into a large company is known as a startup. Startups aim to grow and often offer an innovative product, process or service. Startup entrepreneurs typically aim to scale the company by adding employees, seeking international sales, etc., a process that is often but not always funded through venture capital and angel investments. Successful entrepreneurs have the ability to lead a business in a positive direction through proper planning, adapting to changing environments, and understanding their strengths and weaknesses. Amazing success stories stem from startups that have scaled growth. Examples of this include Microsoft, Genetic, and Management Clearance, all of which embody the feeling of creating a new venture in small businesses.
Freelancing provides work primarily to founders. Entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to grow significantly or become registered, but startups refer to new businesses that intend to outgrow the founders, have employees, and grow exponentially.
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