What is the difference between a startup and a business

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Ever wondered about people who are quite eccentric and wayward? The kind of people who endeavor on finding the solution to the problems they face by themselves? They are usually not inclined towards following the run-of-the-mill schedule and lead a mundane life. Instead, they try to do things in an unprecedented way, something unique is always on their mind to create and make a significant change.

Well, you have got a start-up enthusiast right here. Let’s say, the qualities that I just mentioned of such a person is Sam. Now, Sam has envisaged a bigger idea to manifest through his actions.

He has got an idea that he wants to put life into and make it tangible. He is super nerdy, unkempt, and unsure at times, and is constantly figuring out ways to find peace through his ideas and innovation. He may or may not find success but that’s not a new thing. Failure only opens up new pathways to walk on and do things differently with a better experience.

A businessman, let’s call him John, who is always well-groomed, filled with self-confidence, and nurtures a fervent desire of profit-making and keeping books of accounts to conduct his business seamlessly.

Now Sam and John both want to sell Mobile Phones. Now, their objective is identical but their respective approach will be significantly different. John will ideally go on to set up his showroom in a customer-centric location on the main road which will attract customers from all places. His business will exclusively rely on trust, word-of-mouth, etc.

Whereas, Sam will try to figure out different avenues and ways online while incorporating machine learning and artificial intelligence to offer a customized solution that will be based on exclusive demographics, customer preference, etc. This is a highly time-consuming process but is equally profitable if channelized efficiently.

Now, the predominant part is money. How can Sam and John get money to support their respective operations? John, a businessman will need an extensive capital which is usually generated from the family. He might avail a loan too. But what about Sam, a start-up enthusiast?

He might have some of his savings and goes on to pitch his unique ideas to his acquaintances or his boss with the hopes of receiving some significant funds from them.
Start-ups can be called a temporary organization that tries to find and follow a business model that is scalable as well as repeatable.

Basis of Classification



  • Innovation: Businesses might lag a bit in this area since your business can have a lot of competitors who are already deeply entrenched in the market. For instance:
    Business of restaurant, Hardware, etc.
    Whereas, Startups need to have this component as an integral factor to differentiate them from others. To create something unprecedented and augment what already is in existence. Ex. Technology like 3D printing is unique, a new business model altogether.
  • Scope: Businesses can thrive but they still get limited to some extent due to limits that are put in place by the businessman himself. They tend to focus on a specific set of customers and render services to them predominantly.A startup cannot put any limitations because if it does, then the element of uniqueness will fall flat. It will not be as fecund as it could have been, had it not put the limitations. Capturing significant market share in a short time will dictate the prosperity of a startup.
  • Growth Rate: Business should undeniably grow in a short time to fulfill the core objective which is to maximize profits. When businesses thrive, the chances of sustainability are also high.Startups are expected to grow swiftly in as little time as possible. Here, the core objective will be to create a business model that can be reproducible. Reproducing success is the pivotal determinant of success in any startup.
  • Profit: Businesses expect to make profits in their nascent stage. Businessmen will generate profits and making good progress will reflect in the profits generated by the company.Startups cannot expect to make profits at a preliminary stage. They require an incredible amount of patience and perseverance to stay long enough in the market to be able to generate the desired revenue. It might as well take months or years. The top priority is to make a product that customers will buy. If this is achieved, rest is assured for the startup.
  • Finance: To kick start a business, your private savings, investor funds, etc, will serve the purpose. Conducting a business signifies that you want to be self-sufficient and therefore, refrain from being contracted into a debt.Startups are exclusively run by private means with additional assistance availed from your acquaintances. However, one of the latest avenues has been crowdfunding(Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture), which has made its mark on startups. You might also generate capital through venture capital etc.
  • Technology: Technically, a rigid set of technology is not required for any business. They can keep building upon their experience and keep improving with time. Out-of-the-box solutions are mandated in these cases.Startups cannot risk getting their hands on multiple tasks at once. Focusing on the current technology and harnessing it should be the crux. Startups must adopt the newest technology available to register considerable growth.
  • Lifecycle: As much as 32% of the new businesses tend to shut down in the first 3 significant years since their inception.Startups suffer a more volatile and turbulent environment which lands them in quandary. 92% of the startups usually shut down in their first 3 years of operations.
  • Management: There are no specific limitations that businesses should hire only a limited number of workers or associates. It all rests on the scale of the business predominantly.Startups are required to manage quality since their inception to grow significantly faster. As it develops and makes its presence conspicuous in the domain, it can hire an increased number of professionals.
  • Way of life: Businesses usually take fewer risks as compared to startups. It doesn’t mean that businesses don’t take risks at all. But the magnitude of risk is considerably lower when it is placed in the same zone with startups. The life of any businessman is full of repetitive calls. Extensive and strenuous work is mandated in the early phase of businesses.Startups have high chances of making early profits if it has secured investors’ funds. Hence, you cannot procrastinate or be impetuous at any stage. The balance between your personal life and your work will undoubtedly shrink. It is all about hustle every other day.
  • Exit Strategy: Businesses entail two predominant versions. Either it will turn out to be a family business or you will consider selling it along the line.

Startups usually gravitate towards a large deal on selling or they might even turn into an IPO which is Initial Public Offering.

Startup-imageWhat Classifies A Company As A Startup?

Classification-of-a-StartupAs per the recent developments by the central government, startups are heavily favored by the government to promote and stimulate massive idea generation. A company will be called a startup in the following circumstances:

  • A company or any entity will be referred to as a startup up to 10 years from its inception and registration. This period was 7 years previously.
  • If the turnover of the entity in any financial year since its inception does not go beyond or exceed Rs.100 crore. Earlier, this limit or bar was set at Rs.25 crore.

Yes, initially every business goes through an inevitable startup phase. A startup is a new entity that indulges in incessant experimenting. It carries a sole idea to transform into a pertinent business model that can propel its chances of becoming a fast-growing company/business.

It entirely relies on the fact that how you visualize a startup. The basic meaning of startup can encompass the commitment level, rate of growth, or business model validation. Startups have to stick to a predetermined business model and a product to work upon. A sales model which is exclusively repeatable goes a long way for startups.

Startups have a stark difference from businesses in terms of revenue as well as growth. Startups channelize their intrinsic efforts for top-end revenue in tandem with growth potential. A temporary business model is mandatory in the case of startups that are responsible for swift growth.

On the other hand, businesses usually are aesthetically content with conducting their operations in a supposedly small portion of a big market. This is in sheer contrast to startups because they continuously zero in on the much larger market share to the best of their acumen and the services they are capable of providing.

Keeping in mind the launch and significant growth of businesses such as Airbnb, Snapchat, or Uber they have displayed the potential that a startup carries. They made the word ‘’startup’’ a part of the regular vernacular of society.

Citations :

Skillioma Home (March 1, 2024) What is the difference between a startup and a business. Retrieved from https://repo.skillioma.com/what-is-the-difference-between-a-startup-and-a-business/.
"What is the difference between a startup and a business." Skillioma Home - March 1, 2024, https://repo.skillioma.com/what-is-the-difference-between-a-startup-and-a-business/
"What is the difference between a startup and a business." Skillioma Home - Accessed March 1, 2024. https://repo.skillioma.com/what-is-the-difference-between-a-startup-and-a-business/
Skillioma Home July 27, 2023 What is the difference between a startup and a business., viewed March 1, 2024,<https://repo.skillioma.com/what-is-the-difference-between-a-startup-and-a-business/>
Skillioma Home - What is the difference between a startup and a business. [Internet]. [Accessed March 1, 2024]. Available from: https://repo.skillioma.com/what-is-the-difference-between-a-startup-and-a-business/
"What is the difference between a startup and a business." Skillioma Home [Online]. Available: https://repo.skillioma.com/what-is-the-difference-between-a-startup-and-a-business/. [Accessed: March 1, 2024]

Power Words :

  • Eccentric
  • Fervent
  • Pivotal
  • Inception
  • Impetuous
  • Aesthetically
  • Wayward
  • Entrenched
  • Nascent
  • Turbulent
  • Incessant
  • Vernacular
  • Run-of-the-mill
  • Augment
  • Perseverance
  • conspicuous
  • Pertinent
  • Envisage
  • Unkempt
  • Fecund
  • Crux
  • Strenuous
  • Intrinsic


Critical thinking challenge question :

Sam and John embarked on the same objective to sell Mobile Phones. Which one of these two prospective individuals will take longer to establish themselves and why?

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What is the difference between a startup and a business

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