Every new business doesn’t need to be labelled as a start-up

Start-ups are the new it-thing today. It sounds urban, fun and is all about making money.

“A start-up company (start-up or startup) is an entrepreneurial venture which is typically a newly emerged, fast-growing business that aims to meet a marketplace need by developing or offering an innovative product, process or service. A start-up is usually a company such as a small business, a partnership or an organization designed to rapidly develop scalable business model. Often, start-up companies deploy technologies, such as Internet, e-commerce, computers, telecommunications, or robotics. These companies are generally involved in the design and implementation of the innovative processes of the development, validation and research for target markets. While start-ups do not all operate in technology realms, the term became internationally widespread during the dot-com bubble in the late 1990s, when a great number of Internet-based companies were founded.” – Wikipedia

There are many businesses which have come up in today’s market scenario which are primarily small businesses and not start-ups. There are a lot of factors which actually distinguish a small business from a start-up. Not every venture which is recently launched classifies as a start-up because someone calls it one.

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In a few ways start-ups are different from businesses:

Growth parameter

The start-up grows and expands at a much faster rate than a normal business. This means they cater to a bigger market in lesser time. This is not something every business aspires to or can do.

In terms of investment

Small business differ from start-ups greatly in terms of the funding they receive. While small business rely more on savings and loans, start-ups are more likely to get their funding from angel investors and Venture capitalists.

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Risk factor

The start-ups bear a greater risk in terms of funds and the core idea as compared to a normal business. A business could be running a general store for ages and selling the same kind of products. But, for a start-up, the innovation is constant which is why the risk factor is considerably high.

For instance, OYO rooms is now venturing into OYO prime and OYO cafes.

The motive is different

The business exists to feed the family and for sole purposes of livelihood where as a start-up was born because an entrepreneur had a brilliant idea and wants to take a risk to go ahead with the idea. Entrepreneurs want to feed their passion which is a primary reason for start-ups cropping up.

Start-ups have entrepreneurs and a team

Start-ups have an entrepreneur or a group of founders under whom a team of dedicated employees work to make an idea successful. Businesses on the other hand, have an owner/s and have employees working at the owner’s discretion.

At the end of the day, all start-ups are actually businesses which are looking to sell products or services and make money. The expansion plans might be slightly different for start-ups but the entrepreneur needs to work relentlessly just like the owner of the business.

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Image credit: phxstartupweek.com

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Niharika Nandi

Author: Niharika Nandi

Aspiring start-up writer who loves traveling. I'm also a self-confessed potterhead and a professional bathroom singer who likes to bake and devour hazelnut shakes in my free time.

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