The Difference Between Starting and Running a Business

Starting a business and running a business are two distinct phases in the lifecycle of an enterprise, each requiring different mindsets, skills, and approaches. While they are interconnected, the transition from one to the other is significant and marks a major shift in how entrepreneurs must operate and think. Understanding the difference is crucial for aspiring business owners and even seasoned entrepreneurs who may underestimate the importance of adapting their strategies as the business evolves.

At a high level, starting a business focuses on ideation, planning, securing resources, and establishing a presence in the market. In contrast, running a business involves sustaining and growing operations, managing resources effectively, and responding to external and internal challenges to ensure long-term success. Here, we will delve into the key distinctions between the two stages, exploring their unique focuses, challenges, skills required, and the temporal mindset each phase demands.

I. Starting a Business

1. Focus: Ideation, Planning, and Market Entry

The beginning of any business lies in a compelling idea—something that solves a problem, fills a market gap, or introduces a new way of doing things. The focus during this phase is largely conceptual and strategic. Entrepreneurs must evaluate whether their idea is viable, scalable, and financially feasible. This often involves thorough market research, identifying target audiences, studying competitors, and understanding market needs.

Once the idea is validated, the next steps involve business planning, which includes outlining goals, business models, marketing strategies, and financial projections. This plan not only serves as a roadmap for launching the venture but also becomes crucial in securing funding from investors, banks, or other sources.

Branding and establishing a market presence are also part of the startup focus. Entrepreneurs must make key decisions about branding, positioning, and how they will initially reach their audience—often with limited resources.

2. Challenges: From Funding to First Customers

One of the most daunting tasks when starting a business is raising capital. Whether through personal savings, loans, venture capital, or crowdfunding, new entrepreneurs must convince others to invest in a vision that has not yet proven itself.

Other significant challenges include:

• Product development: Ensuring the product or service is ready for the market and meets customer needs.
• Legal and administrative setup: Registering the business, setting up banking, taxes, insurance, and compliance issues.
• Talent acquisition: Attracting the right co-founders, partners, or employees to help bring the idea to life.
• Building a customer base: Often, startups struggle to gain traction, make their first sales, and build initial trust in the market.

These hurdles can be overwhelming and require perseverance, resilience, and creative problem-solving.

3. Required Skills: Creativity, Risk-Taking, and Salesmanship

Entrepreneurs in the startup phase must possess a blend of creativity and courage. The ability to see opportunities where others see obstacles is often what sets successful entrepreneurs apart.

Key skills include:

• Creativity and innovation: Essential for idea generation and problem-solving.
• Risk-taking: Willingness to operate under uncertainty and take bold actions.
• Networking: Building relationships with potential investors, mentors, suppliers, and early adopters.
• Salesmanship: Convincing others—whether customers, partners, or funders—to believe in and support the business.

4. Time Horizon: Short-Term and Opportunity-Driven

The time horizon during this phase tends to be short-term and opportunity-focused. Entrepreneurs often operate in a fast-paced environment, needing to seize fleeting market gaps or technological trends. Flexibility and the ability to pivot quickly are crucial. The emphasis is on speed, learning, and iteration, as entrepreneurs test hypotheses and adapt based on early feedback.

II. Running a Business

1. Focus: Sustaining Operations and Strategic Growth

Once a business moves past the startup phase and achieves some level of stability, the focus shifts to running and scaling the business. This phase involves more structured operations, such as managing supply chains, overseeing customer service, maintaining quality control, and ensuring consistent cash flow.

Whereas startups might be more experimental, established businesses need to implement systems, policies, and performance metrics. There’s also a growing emphasis on strategy, including how to expand market share, improve profitability, and diversify offerings.

Customer satisfaction becomes a major focal point. Retaining existing customers and encouraging repeat business are often more cost-effective than acquiring new ones. Thus, a strong emphasis is placed on customer experience, loyalty programs, and feedback loops.

2. Challenges: Cash Flow, Market Adaptation, and Employee Retention

Running a business brings a different set of challenges—ones that require constant attention and long-term planning:

• Managing cash flow: Ensuring that the business has enough liquidity to meet its obligations, pay staff, and invest in growth.
• Adapting to market changes: Businesses must be agile in responding to shifts in consumer behavior, competitive threats, or regulatory environments.
• Retaining employees: As the team grows, maintaining a positive culture, offering development opportunities, and managing HR effectively becomes critical.
• Operational efficiency: Streamlining processes, reducing waste, and improving productivity are essential for long-term sustainability.

Unlike the chaos of a startup, the operational phase requires consistency and discipline.

3. Required Skills: Leadership, Strategic Thinking, and Team Management

The skill set for running a business is distinct from that needed to start one. Here, strategic leadership and organizational efficiency become paramount.

Key skills include:

• Leadership: Inspiring and guiding a team, making tough decisions, and setting the tone for the company culture.
• Strategic planning: Anticipating future challenges and opportunities and aligning the business to take advantage of them.
• Teamwork and management: Coordinating diverse functions—marketing, finance, operations, HR—to work toward shared goals.
• Financial literacy: Understanding income statements, balance sheets, and cash flow statements is essential for informed decision-making.

4. Time Horizon: Long-Term and Sustainability-Focused

Running a business demands a long-term orientation. Success is not just about immediate wins but about building a sustainable enterprise that can weather economic downturns, outlast competitors, and continually evolve.

This means investing in:

• Employee development
• Customer relationships
• Innovation and R&D
• Scalable infrastructure

Where startups can thrive on chaos, mature businesses succeed through systematic growth and continuous improvement.

III. Bridging the Two: The Transition from Startup to Operational Business

One of the most critical and often underappreciated stages in a company’s life is the transition from starting to running a business. Many entrepreneurs find this shift difficult. The behaviors and tactics that worked in the early days—improvisation, high tolerance for risk, rapid experimentation—can become liabilities if carried too far into the growth phase.

For example, continuing to micromanage or make all decisions alone can stifle a growing team. Failing to document processes or formalize operations can lead to inefficiencies and confusion.

This transition requires founders to redefine their roles, often stepping into leadership and managerial capacities they may not have initially envisioned. It also requires letting go of control, empowering others to take responsibility, and trusting systems over instincts.

IV. Real-World Example: Illustrating the Differences

Consider the example of a tech startup that creates a mobile app for mental wellness. During the startup phase, the founders focus on:

• Developing the app prototype
• Pitching to investors and raising seed funding
• Conducting beta testing and collecting user feedback
• Marketing through social media and influencers to gain early users

They might work 80-hour weeks, juggling product development, customer support, and investor meetings themselves.

After a successful launch, the business begins to grow. Now, the focus shifts to:

• Hiring customer support and product teams
• Setting KPIs and tracking metrics like churn rate, ARPU (average revenue per user), and customer satisfaction
• Expanding into new markets and languages
• Ensuring server uptime, data security, and compliance with health data regulations

The founders must now think like CEOs, not just like builders or creators. They focus on company culture, investor relations, and strategic partnerships, rather than coding or posting on social media.

V. Conclusion: Two Sides of the Entrepreneurial Coin

In summary, starting a business and running a business are fundamentally different undertakings that require distinct focuses, challenges, skill sets, and mindsets. Starting a business is often about dreaming big, taking risks, and moving fast. It is fueled by creativity, passion, and the hustle to get things off the ground. Running a business, in contrast, is about discipline, structure, and endurance. It requires the wisdom to grow sustainably, the resilience to navigate ongoing challenges, and the foresight to lead a company into the future.

While many may romanticize the excitement of starting something new, the long-term success of any venture depends on the often less glamorous—but equally important—work of running the business. Both stages are essential, and understanding their differences is key to thriving in each.

Entrepreneurs who can navigate the shift from starter to steward—who can transition from the adrenaline of creation to the discipline of execution—are the ones most likely to build businesses that not only start strong but endure and flourish over time.