Understanding The 5 Common Types of Startups
A startup generally refers to a business in its initial stages of operations. In other terms, a startup company is a newly established company.
Entrepreneurs create and fund a startup company believing there’s a significant demand for the product or services a company offers. If you’re new to the concept of startup businesses, you might want to familiarize yourself with the different types of startups common in the business industry.
Small Business Startups
The first type of startup you can commonly find is the small business startup. This type of startup is a small business that doesn’t intend to become bigger and is satisfied with its small teams.
It doesn’t mean startups don’t want to grow, but they do it at their own pace. This is because these startups are self-funded, so they don’t need to grow their business as soon as possible to keep up with an investor’s timeline.
That said, there’s no pressure on the owner whether the business will grow or not. Frequently, small business startups stay small throughout their lifetime. As long as they profit from it, they’re good.
If you’re planning to launch a small business startup, you must keep in mind that you must fund your business throughout its lifespan. Therefore, you need to look for a way to acquire extra cash to fund your small business startup without seeking the help of investors.
One way to do it is to acquire a personal loan. Personal loans can be acquired to fund small business operations, and the best platform to get it from is through an online lender.
Online lenders like CreditNinja.com offer an online loan that you can use for your small startup company. However, keep in mind that personal loan only offers a limited amount and is only suitable for funding small businesses.
Scalable Startups
Another common startup that you will encounter when you do your research about startups is the scalable startup. This type of startup is a business that starts from an innovative scheme and employs a profitable business model that helps the startup scale up quickly.
The main objective of a scalable startup is to make the business vast and profitable. Many entrepreneurs who establish a scalable startup enter a large market and create a niche for their products or services. However, you need to consider that there are business niches that are much easier to scale up than the others.
Some examples of these scalable startups are consumer and business apps. These types of businesses can easily scale up when they create a buzz and a user base.
Buyable Startups
A buyabzle startup, on the other hand, is a startup business created with the end goal of selling it to a larger company within the same industry. Big companies always look for startups that can add value to their existing company.
That’s when a buyable startup comes to play. If you aim to create a buyable startup, you must ensure that your products or services are unique so that big companies will not think twice about acquiring your startup business.
Most commonly, businesses under technology and software are the main players of buyable startups. You might have read news about big companies like Amazon or Uber that bought small startup companies for a merger.
This means that the small startup companies that these huge brands acquired were buyable startups with only one goal, to be bought and merged with a bigger company within the same industry.
Social Startups
Another startup that you should watch out for is the social startup. This type of startup is usually confused with an NGO due to the startup’s purpose and goals. Social startups are also known as social entrepreneurship, where businesses under this category aim to fulfill a social goal or mission.
Businesses under this type of startup don’t aim to profit from the business and are commonly registered as non-profits. Instead, they aim to help the community by providing products or services.
Examples of social startups are banks that help small businesses by providing financing assistance, making it easy for new entrepreneurs to start their businesses, and, in return, providing jobs to the community.
Offshoot Startups
Last but not least is the offshoot startup. This type of startup isn’t similar to other startups mentioned above. The offshoot startup isn’t established from the ground up. These startups branched off from bigger companies already established in their respective industries.
Big companies do offshoot startups if they want to venture into a new market or want to destroy smaller competitors. It’s more of a strategy than a new business venture.
These startups operate independently from their parent companies, so they still have the freedom to do business or experiment if needed without paying too much attention to their parent company.
Final Thoughts
There are many things you need to know about startups. Now that you understand the five different types of startups you commonly find today, you can move forward with your research about this business equipped with better knowledge.
Use the information you acquired above to decide which type of startup will help you or your business.