What’s the Difference Between a Business, a Startup, and a Company?

The words business, startup, and company are often used interchangeably. Do they all mean the same thing? Let’s find out!

They Aren’t the Same!

Although business, startup, and company are all similar words, they have slightly different meanings. Let’s go over each word separately.

What’s a Business?

The word business ultimately refers to the process of selling products or services to make money. A business can be very small (as in a lemonade stand) or it can be very large (as in a multinational, soul-crushing corporation.)

If the organization doesn’t make money, it’s not a business. For example, a charity that relies on donations to operate is not a business. However, if the charity repeatedly sells a product to raise money, that process of selling something to earn income is a business. Make sense?

Let’s Start a Startup!

In the past 20 years or so, the term startup has come into popular use. It is a shortened form of startup company. Since the Internet and technology are the basis for many new businesses, the term technology startup (or tech startup) is also used. (Thus the name of this website!)

The word doesn’t have a specific, distinct meaning, but is essentially means an early-stage business that is typically technology-oriented and has the potential for fast growth. You can read more about the definition on Wikipedia.

A Startup is Often Different Than a Business.

The important point to learn is that the words business and startup are sometimes not interchangeable. Startup usually refers to newer, more technology-oriented businesses or organizations. You typically wouldn’t call a new grocery store or a new motorcycle repair shop a startup. (You’d call them a new small business.)

This is mostly because a startup is generally assumed to grow as quickly as possible, while small businesses are usually more concerned with increasing profit margins, maintaining product quality, or other metrics unrelated to growth.

Also, it’s important to note that some startups aren’t actually businesses. For example, if a new nonprofit uses technology to achieve its mission, it could be called a startup. However, the nonprofit isn’t a business, as it is primary focused on a social or humanitarian mission, not on making money.

Finally, a Company

Finally, let’s talk about the word company. It originally just referred to a collection of individuals. For example, William Shakespeare’s group of actors was a theater company called the King’s Men.

In everyday English and in the tech startup world, the word company is used to refer to a business organization.

I paid for the dedicated server with the company credit card.

Jack and I started a company selling T-shirts.

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