5 Advantages of Startups over Large Businesses

Young employees looking at the computer

Traditional big businesses are the figments of Wall Street and the hedge fund lovers. But these days, startups are taking a large share of the pie, too—and for good reason. There are many ways a traditional large business is required in an industry. The oil and finance industries, for example, are still predominantly governed by large corporations. But some hot industries like the tech industry are a shoo-in for startup culture. Here are some ways small startups serve as the David to the large corporation Goliaths in the world and why it’s worth your time to know.

1. Small Overheads

For a traditional business, you will have all the bells and whistles like warehouse staffing, large rent and utilities, and a boatload of taxes and permits. There are still permits for startups, but the requirements are often not as big. A smaller overhead means that you have a lower acquisition cost for your customer. That means more room for actual net profits for your business. Starting small with a lean workforce can help you scale to greater heights faster and in a more efficient way.

2. More Receptive to New Ideas

You are not generally held with a vice-like grip or trapped in the will of a stiff board of directors meeting when you are in a startup. There are ways to secure funding elsewhere by means of angel investors. You can see that it’s much easier to position yourself and your ideas with the head honchos of startups than a highly large and corporate counterpart.

3. Stock IPO and Potential for Growth

Stock gain and loss conceptThis is where most people jump on the startup bandwagon. There is just so much potential for growth. A small startup now can become the next big tech giant in a few years. Investing your time and energy in a startup can generate exponential returns in the future.

4. A Flatter Structure for Collaboration

Want data to access or analysis? You got it. You need to get three different teams on board. Just get a Google Calendar meeting scheduled, and you’ll have it in no time. Most successful startups act fast and are not bogged down by office politics and red tape. That’s not to say that there is no office politics in a startup. However, it’s much easier to scale that political climate than when you have a multinational conglomerate that takes years of approval to get a certain thing done or executed.

5. Flexibility to Change and Experiment

The technology industry is full of startup success stories, and it’s no coincidence. Startups are a hub for innovators, for people who want to drive radical experimentation to achieve success in unorthodox ways.

Like many other things, deciding between joining a startup or a large organization is mainly a matter of fit. One person may find startups too unstructured and may thrive in a large corporate environment. Another person may find corporate structures too restricting and have a better chance of working in a startup. Find where you fit exactly and thrive in it.