MARKETING a small , limited team forever . Small businesses face a myriad of challenges , especially financing growth operations . It becomes even tougher if one relies on the proceeds for survival .
Going by previous studies , most small businesses do not proceed to their second year . Thus , the majority are born from the innate desire of the owners to be self-employed or make extra cash on the side with no clear growth strategy , business plans or operating manuals .
Access to Capital
The way startups and small businesses are funded , are completely different . Access to capital is not easy for both . Even so , it is typically easier for startups to meet funding criteria . They are much more likely to turn to and find success with equity financing as compared to small businesses .
With equity financing , startups can look for angel investors or venture capitalists who are willing to offer large amounts of capital in exchange for ownership of the company . Typically , these investors offer minimum amounts of capital in “ rounds ” and then with each series of funding , the startup gives up equity .
On the same breath , equity financing just doesn ’ t make sense for most small businesses . Business operations of most small businesses are not structured , from inventory to management . The toughest part is that most small business owners don ’ t want to give up control of their businesses .
And most angel investors and venture capitalists only want to work with high-growth-potential startups that are disrupting their industries .
Instead , small business owners usually turn to different forms of debt financing loans , lines of credit , asset-based financing , etc . to fund their operations .
Business Goals
Startups have clear business goals on what they need to achieve and by when . On the other hand , for most small businesses , it is always survival , a day at a time kind of approach . Startups are always on the lookout for the most efficient and scalable way to meet business objectives . A startup may change business models multiple times to find the right formula , but once it does , the goal of the organization then shifts to execute that model . At that point , the organization is no longer a startup and , instead , is a company . Small businesses , on the other hand , normally maintain their structure even if their growth becomes promising . Put differently , they remain “ Small Big Business ”
Building Value
The core purpose of all businesses is profits . How soon will the business realize returns on investments ? From the onset , small businesses are focused on getting earnings and , if possible , a profit .
It might take months or even years for a startup to gain its first cents . But their key focus is on building enduring value that will pay forward . Hence , their top target is to create
a product that consumers will like when finally launched in the market . If this aim will be achieved , the profit of the company will be millions . Amazon is a perfect example .
Technology
Technology is at the core of most startups . Technologies are oftentimes the main product of startup whereas for small businesses there are no special technologies required .
Exit Strategy
If the business ’ s objectives are met or not what do you do ? In the case of startups , the businesses mostly move to IPO or are bought off by large corporates as subsidiaries whenever they are successful . Most startups have clearly laid down plans . For small businesses , they normally remain as family businesses to be moved down generations . If objectives are not met , small business would cut their losses and close down .
In conclusion
I would fail as a marketer if I don ’ t arouse your interest in my new venture . I guess only time will tell whether I would move from a small venture to startup . And oh ! By the way , I sell ebikes , reach out . ■
Geoffrey Sirumba , is the Commercial Director Tian Xing Cloud Kenya Supply Chain Limited , a subsidiary of Xing Yun Global , China . Feel free to reach him via email at :
Geoffsirumba @ gmail . com or
@ geoffsirumba on Twitter .
MAL 47 / 22 ISSUE 35