The Polarity between Start-up and Lifestyle Business!

By Aparna RoyEvery business is the outcome of an innovative idea. But, every new business cannot be defined as a start-up.

We often land up considering each new venture to be a start-up, without realising the fact that there is a difference between a scalable business and a trade.
The most common business which is often regarded as a start-up is the lifestyle business. This is because most of us do not know the difference between a business and a start-up.
We need not worry much, as this is not rocket science. All we got to do is to probe the factors that differentiate lifestyle business from being a start-up.

First of all, we need to understand what is a lifestyle business?

-A lifestyle business is a small business generally referred to as “mom and pop’ shop, usually a family owned business. Not necessarily it has to be a family oriented; it simply is a business that is not subjected to the determinants a start-up is subjected to. Whereas, start-ups on the other start by individual founders or entrepreneurs with the objective to search for a repeatable and scalable business model.

Perhaps, a definition will only give us a simple understanding of the matter.
Comparing these two concepts can give us a clearer picture.

1. A start-up aims to grow big, as it has to return the profit to the investors. Whereas lifestyle business does aim to grow big but to give its owner a privileged lifestyle.

2. The definition of success is different for a start-up and a lifestyle business. The former targets for a huge outcome in order to achieve the goal set in the market while the latter does not have any set targets of sale to win the market.

3. A lifestyle business can expect to incur profit in the earlier stage but a start-up has to spend several years in the market to gain the expected profit.

4. A start-up is like an enthusiastic horse that runs at the greatest speed to gain the highest growth in business. Lifestyle business does attempts for the same but moves forward gradually.

5. The one common and crucial factor that is troubles in both the ventures is funding. The difference lies in the way of attaining funds. Lifestyle business usually incorporates personal saving or small business and family loans. Start-up focuses on the crowd or angle funding usually from outlanders.

6. Lifestyle businesses owners enjoy entire ownership which means that the responsibilities, changes and control of the company completely lie on the owner or owner’s hands. But a start-up happens to have a complex ownership structure which is divided and restricted among the owners.

Anyhow, there are more such differences between the lifestyle business and start-ups. And it is very important to have a clear idea about these differences. It enables us to comprehend the thin line that separates these ventures.