Winter Park, FL—The term “startup” and “new business” are often used interchangeably, making it difficult for people to understand whether a difference exists between the two. While both terms can be used interchangeably, they can also carry their own meanings. So, how does a startup differ from a new business exactly?
Startup vs. New Business
A startup is a new business involving one or more individuals coming together to offer a product or service. When creating a startup, an entrepreneur is merely “starting with a blank sheet of paper,” according to the Martin Trust Center for MIT Entrepreneurship. Although what is described above sounds like any new business, a startup brings something new and innovative to the market.
Unlike most new businesses that simply repeat a business that already exists, startups derive from fresh ideas that haven’t been established yet. Facebook was once considered a startup as it brought an entirely new platform to market for individuals to connect and communicate online.
How do startup companies obtain funding?
Startup companies can obtain funding in a number of different ways. Below are a few suggestions the U.S. Small Business Administration (SBA) provides on how this can be done.
- Ask friends and family. Because startups are not franchised nor are they duplicating an already established business model, it may be difficult to obtain funding. Friends and family can serve as a great source of income for individuals with an idea and plan but lack the necessary funding to get it off the ground.
- Crowdfunding. There are many crowdfunding websites that can be used to help startup companies launch their idea or keep it in motion. Crowdfunding sites connect new business ideas with potential investors or people who simply want to help the business grow.
- Vendor credits. There are many businesses that will allow startups to purchase products without having to pay for it up front. Generally, when a business contracts with a vendor, they are afforded a line of credit and can purchase products up to this amount. These accounts are often referred to as net 30 accounts. After the product is purchased, the business owner is then given a certain amount of time, usually 30 days, to satisfy their balance before they can make another purchase.
Creating and managing a startup is challenging as is any new business venture. There are certain rules that need to be complied with and requirements that must be met. Startup owners who want to be sure they are meeting the requirements necessary to legally start a “startup” can contact Legal Counsel P.A. for help.
The Winter Park, FL business law attorneys at Legal Counsel P.A. can help a startup meet all legal requirements to prevent from running into any issues down the road. A business lawyer can also review any contracts with the business owner, whether the agreement is between an investor or vendor, to ensure they understand the terms they are agreeing to.
To connect with a reputable Winter Park, FL business law attorney now, call 407-395-2653.
189 S. Orange Avenue, Ste. 1800
Orlando, FL 32801
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