What Is a Startup Business? (Plus 21 Startup Ideas)

By Indeed Editorial Team

Published November 16, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Helping to establish a business or startup often provides professionals with an opportunity to share their talents and knowledge. While there are many types of businesses, a startup may allow you to develop a meaningful product or service that affects the market positively. Learning about this type of business can help you develop the skills and knowledge you need to help a company grow.

In this article, we define startup businesses, compare them to small businesses, examine the benefits of working for a startup and list startup ideas to help you build a company that's right for you.

Related: How To Start Your Own Business in 9 Steps

What is a startup business?

A startup business is a company in the beginning stages of its operation. Startup founders often build these businesses around a single innovative new product or service that they plan to introduce to the market. Since new products may require development and research, startup businesses typically begin with high operating costs and limited revenue. This may require founders to seek investment from friends, family or outside sources like venture capitalists. Founders may also invest their own money to help a startup company move into the next stages of its business plan.

Read more: What Is a Startup? Everything You Need To Know About Startups

Startup businesses vs. small businesses

Although they share some similarities, there are many distinctions between a startup and a small business. Here are a few key ways they differ:

Business objectives

A startup's business objective is often to change the market with an innovative product or service, such as new technology. While this may require time and resources to gain popularity and attract customers, the company's goal may eventually be to gain a large percentage of the market share with its product or service. In comparison, a small business often enters an established local market. Unlike a startup, small businesses may focus on selling products or services that are already popular rather than striving to impact the market they enter by selling a newly developed product.

Funding

Startup founders often secure monetary investments in exchange for equity, or partial ownership, of the businesses. They may also communicate the business' growth potential to appeal to investors, which can provide them with the necessary resource to grow the startup. In contrast, small businesses may use other methods of acquiring funds rather than giving investors equity. For example, they may seek financial support by taking out loans or lines of credit.

Read more: How Startup Funding Works and the 8 Startup Funding Stages

Risk level

Since startup businesses seek to introduce a new type of product to the market, they may maintain high levels of risk. Even if the product is popular initially, a startup founder may be unable to predict its long-term impact on the market. Additionally, since startups often receive funding from investors, the businesses may risk investment capital to ensure the success of their products. In contrast, small businesses experience risks based on their ability to gain revenue. Since they typically enter established markets, they often encounter fewer costs associated with changing the market.

End goals

Startup businesses often begin with the intention of creating a scalable, repeatable business model for selling a product. As a business transitions from a startup to a larger company, its founders may seek an acquisition or merger. Small business founders may be more interested in maintaining steady levels of success for many years, eventually passing their business on to family members or retiring.

Growth intent

Startup founders often focus on expanding the presence of the business within a market by developing innovative products. This means startup businesses frequently have the goal of growing quickly as their products gain market share. In comparison, an independent professional often owns a small business. While a small business' founders may be interested in making the business successful, they may not focus on gaining national recognition. Instead, the goal of a small business may be to maintain a relatively consistent size and earn revenue in a local market.

Benefits of working for a startup business

Here are some of the advantages of working for a startup business:

  • Opportunities to learn: As a startup introduces a new product into the market, you may get opportunities to further your understanding of best business practices and strategies.

  • Responsibility: By working for a new startup, you may have the responsibility of overseeing business operations. Depending on your position and employer, you may make decisions that prepare the business for success and expansion.

  • Flexibility: When working for a startup business, you may be able to set working conditions that prepare you for success. For example, some startups may allow employees to decide what hours they work, where they work or which tasks they would like to prioritize.

  • Creativity: As a professional at a startup, you may have the opportunity to think creatively about which products or services you'd like to develop. Changing a market the product you develop can be a challenging but rewarding task.

  • Collaboration: At a startup, you may be responsible for collaborating with professionals who help the business grow. Consider establishing a partnership, investment or mentorship to share ideas, strategies and resources with your collaborators.

  • Potential for advancement: Since startup businesses often begin with small teams, there are often many opportunities for advancement. This can help you further your career in your chosen industry while making an impact on the market by developing a product or service for the company.

Related: 20 Tips To Help Your Startup Business Succeed

21 startup business ideas

If you're interested in working for a startup, consider these 21 startup business ideas:

  1. Specialty travel tour company

  2. Local tour guide service

  3. Coworking space

  4. Meal prep business

  5. Subscription box service

  6. Zero waste product seller

  7. Online vintage sales

  8. Niche blogging company

  9. Social media influencing business

  10. App development company

  11. Podcast creation team

  12. Virtual reality service

  13. Food truck business

  14. Smart appliance seller

  15. Web development company

  16. Online coaching service

  17. Custom clothing shop

  18. Phone accessory seller

  19. Specialty pet product vendor

  20. Event planning company

  21. Fitness coaching service

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