A start-up which doesn't have any concrete and realistic plans for how they'll make money is not a business, granted, but there are plenty of ways to create a business that is solid and yet requires a development period before it starts turning a profit or even making any money.
A start-up which cannot make money should not be called a business. A start-up which has a clear plan for how they'll make money (e.g. by charging for an SaaS product) but hasn't finished building it yet can be called a business, and the creation of a formal business affords many protections that are useful to a business... and so a business should definitely be created to represent those kinds of start-ups.
A start-up which doesn't have any concrete and realistic plans for how they'll make money is not a business, granted, but there are plenty of ways to create a business that is solid and yet requires a development period before it starts turning a profit or even making any money.
A start-up which cannot make money should not be called a business. A start-up which has a clear plan for how they'll make money (e.g. by charging for an SaaS product) but hasn't finished building it yet can be called a business, and the creation of a formal business affords many protections that are useful to a business... and so a business should definitely be created to represent those kinds of start-ups.