Direct answer
Build a website if your main goal is to explain the business, attract search traffic, and generate inquiries. Build a web app if users need accounts, data, dashboards, forms, approvals, or repeated workflows.
Use the user action as the test
If the visitor mainly reads, compares, and contacts you, the project is a website. If the user logs in and does work inside the product, the project is a web app.
A web app usually needs authentication, database design, permissions, testing, and ongoing support.
- Website: pages, content, SEO, contact forms
- Web app: login, data, roles, workflows
- Both: public site plus private portal
How to phase it
Many businesses start with a website, then build a portal, dashboard, or internal tool once the operational need is clear.