What Is The Difference Between A Startup & A Business?
Friday, December 6, 2019 IST
When I hear the word startup the image of some youngsters working in a cool environment for 5 days of the week and hanging with venture capitalists in restaurants and clubs for meetings comes to my mind. And when the same mind hears the word business, it converts the image to someone working hard to earn profits right from the very first day of starting an entity. While this imagination can be entirely wrong, we have tried to put some light on the difference between these two frequently used words.
1. Business Models
The business model of a startup is mainly based on solving a problem and while opening a business maximum consideration is given to profit. Take for an example, someone looking to start a clothing related business, he/she will target the audience by setting a shop or a showroom on the main road where the gathering is maximum. The main purpose of this business will be to sell products which fulfill customer’s satisfaction giving maximum profit to the owner.
In a startup, the person will look to provide some solution for people who like to buy clothes of their choice by setting up an online website where users can customize clothes according to their need. After making a good name this startup will look to generate profits by adding further innovations.
2. Funding
Startups look for fundings very differently than most small businesses. Startups mostly rely on money that comes from angel investors or venture capital firms. Small businesses, on the other hand, may rely on loans and grants. A venture capital tends to play a more active role in whatever company is doing but in businesses, investors are not that active.
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