The Difference Between A Start-up and a Small Business

I just want to state the original purpose of the term start-up because people on this sub abuse it.A start up is business where the product, service and/or business model aren't clear at first.I saw someone mention they are in a lawn care start-up. If you are taking care of lawns in some new novel way, THAT'S a start-up.If you are simply a landscaping business, that's NOT a start-up. That's just a new small business.Your service and product are clear. Your industry and customers are well defined.Start-ups, at least originally, got that name to highlight the added uncertainty of starting a business while figuring out if that business is even viable. They have much higher rates of failure than typical businesses.On the flip side, because start-ups are in uncharted territory, they also have a much higher chance of monopolizing a market before anyone realizes what they are doing. Meaning far greater returns.This is why VC investors prefer to drop millions into a start-up and not a typical small business because the potential reward is significantly larger.This is why start-ups tend to go public or get acquired, because you need a lot of money to figure out that business model and those investors want a return on what they've given.This is also why banks usually won't touch start-ups at first, because banks have to stick to sure bets with loans and require you to have proven that you definitely can pay them back.Don't get me wrong, there's absolutely nothing wrong with just starting a business that isn't a start-up. No, it's not as sexy, there won't be many articles written about your lawn care business, and it probably won't get acquired millions, but small businesses are just as important, if not more important than start-ups. Small businesses are the true drivers of the economy.Lastly, before anyone wastes their time pointing out one of two examples that don't fit nicely into these categories, I'll just say I know they exist. Exceptions make the rule. I just hope this gives some people insight as they explore entrepreneurship. see hubwealthy.com/wealthy