There has been a widespread debate about what exactly the difference is between a startup and a scale up. We decided to do a little research – read on to see what we found!

Startup business definition

The definition of a startup is very broad, encompassing any young or newly established business. This could be just you as a single entrepreneur, or a small team, with or without funding.

In 2016, the UK saw 650,000 new startups registered – that means a new business started every 49 seconds!

Startups will be in the early stages of their journey, finding their feet and growing their business into a strong and scalable company.

 

Scaling up a business

As a startup begins to gain traction, they start to scale into a larger enterprise. The Scale Up Institute defines a true scale up business as:

“All enterprises with average annualised growth greater than 20% per annum, over a three year period, with at least 10 employees at the start of the observation”.

This definition is not rigidly stuck to by entrepreneurs, who generally agree that a scaleup company is one that is showing strong, consistent growth – whether in terms of revenue or customer base.

 

Scale up vs startup

We polled entrepreneurs across the UK to see if they think their businesses are start-ups or scale-ups. We found that:

 

  • 83% of entrepreneurs say their business is a startup
  • 17% of entrepreneurs would define their business as a scale up

 

This just goes to show that lots of businesses across the UK are experiencing strong growth, and are confident about their future. However, according to data from Barclays only around 0.3% of UK businesses meet the Scale Up Institute’s definition for a scale-up company. More is needed to be done to create a definition of a scale up that both entrepreneurs and official bodies agree on, so we can gain better insight into just how many businesses are scaling up as opposed to starting up.

 

Transitioning from startup to a scale up

The scale-up process can be tough. From hiring new staff to raising funds and growing your product, it can be daunting to tackle everything alone. At Accelerate Places, we know the challenges of growing a business and provide business advice and support to help your business scale up. Take a look at our locations, including our new co-working Manchester space, and membership options for your team, to give your business a head start.