Difference Between Startup and Business

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mika baumeister Y LgXwQEx2c unsplash
mika baumeister Y LgXwQEx2c unsplash

When you start a business, you have to deal with things like management, marketing, and financial planning. Starting a startup is nothing like that; it’s all about getting an idea off the ground.

You may be thinking: isn’t one as good as the other? The answer is no. A new company can pivot faster than a business if it encounters problems later on down the line. A business has more overhead and therefore more to lose at any given time — usually because of sunk costs into physical and virtual assets and increased risk for liability (especially if the company deals with customers).

Here’s Jobsrose Difference Between Startup and Business :

1. A business is more predictable

A business is more predictable. Is your startup a big, established business? If it is, you’re in trouble. A failure of a big business will hurt your startup more than just possibly losing money. Customers will flee, employees and vendors may drop off the bandwagon, reputation can be damaged in the eyes of journalists and legal authorities (more risk), and legal institutions may take an interest in the company and end up ruling against it.

 If a big company folds or gets into serious trouble with banking or other institutions, you may be entrapped into debts or bad relationships with banks.

The reason for this is that a startup is not officially a business, so it does not have the same legal protection. If you’re getting investment from individuals who have put up $100,000 each, those people can decide to withdraw the whole thing with no liability. 

Perhaps they all became disillusioned and gave up on your company. What would happen if you suddenly didn’t have any cash? A business has more assets and liabilities to look after.

2. A business is more risky

Starting a business means that you can lose everything. You don’t have liability insurance covering yourself, you can’t back up all the information on your computers or have a safe place to keep paper records. If you lose clients and run out of money, you can call it quits. A business might go bankrupt.

3. A startup is much more rewarding

Starting a company means that you get to manage your own staff, manage marketing and public relations and deal with customers directly. It may seem like hard work at first but looking back, it was all worth it: the initial costs of setting up a business are paid off many times over by the end of the first year or two. Some startup companies have experienced a doubling (or better) in profits in the first few years of operation, and have gone on to be sold for multiple millions or even billions of dollars.

4. A startup may be more collaborative

Having employees can make it harder to get things done or to see what is going on outside your business. It also means that you need to spend money on payroll and taxes which can lead to financial problems if your business fails.

 A startup is more likely to have people that are also doing their own startups as well, sharing ideas and time as they help each other out. This makes it easier for everyone involved when they need advice and support with the business, which will ultimately lead to more money being made.

5. A business is not a charity

Starting a business means that you can make money, enabling you to keep on going with your idea. It’s a more realistic way for you to solve any financial problems that your startup may be facing. You can go into debt and pay yourself back later on as the company grows and becomes profitable. 

A business has many employees and can offer defined benefits, flexible working hours or an appealing work atmosphere in which to do your job. This is why many people decide to start businesses; they get to make more money while managing their own affairs.

6. A startup is better financed

A business may be backed by wealthy investors who give you the money to start up, or they may have significant financial backing from the government (perhaps through a bank loan). If a startup has this sort of support and it goes bust, if there are any creditors left unhappy with their allocation of funds, they can actually sue in court: the first dozen or so people to get paid will win anything up to hundreds of thousands of pounds. In practice, it’s rare for someone in your position as an employee to have similar problems as a business owner; when you lose your job a year or two down the line, you can at least try again.

7. A startup is great for marketing

Setting up a business means finding clients and potential partners and making decisions regarding your product or service. What you do, who you sell to, pricing, all of these are serious issues that directly affect your bottom line. A business has more freedom in this area. You can advertise yourself before you get too deep into the workings of your business, which will ultimately help with making money.

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