Startup vs. Starting a New Business
Recently I was speaking with a few people at a networking event and the question was posed to me if there is a difference between a startup business and just starting a new business. I answered the question but as I did some looking around I realized that this person is not alone with his inquiry.
Everyone knows what forming a new business is. This the incorporation or formation of a business entity that does landscaping, runs a grocery store, sells clothes, or any number of things. Often times these businesses are considered small businesses even though some do not start off small or stay small for very long. These types of businesses are sometimes called lifestyle businesses because the individual or individuals that own the business are just running a business while still living a relatively normal life. In baseball terms, starting a small business is just trying to get on base.
Startups on the other hand are started by people that are looking to change the universe. While they are business in nature, in reality they are the development of an idea or the creation of something new and revolutionary. Theses startup ideas are often times not the reinvention of the wheel but making the wheel work better. In baseball terms, people that create startups are looking to hit a grand-slam homerun. They want to take their seed of an idea, develop that idea into a product, get funding, get a buzz going, hire employees, get more funding, and ultimately have their idea spread like wildfire while they make millions. People that form startups find that the startup takes up all of their life. When they are not working on the idea and development side of things, they are working on the business side of things, and then they still need to find time to market the product and work on that all important funding issue. While a lot more goes into the startup the payoff and the lasting impact can be worth it.
As you can see even though there is some cross over, there is a difference between forming a landscaping company and being able to mow lawns more efficiently than the competition and having an idea of a new machine that can mow lawns more efficiently. It is very common for people that have small businesses to venture into the startup area with new ideas. Either path you decide to take, it is important to have a support system around you. Your financial, advisory and legal needs are important and too often people take on the “do-it-yourself” mentality, get into hot water and then it’s too late. Contact someone with experience with these matters and pick their brain. It’s well worth it.