Define a clear business model

How you make money should be clear in 30 seconds. If a stranger doesn't grasp your model after one sentence, your file has a problem — here's how to make it crystal clear.

The business model answers a simple question: who pays, for what, and how much? Many founders confuse "what I do" with "how I make money." They're two different things. A restaurant does cooking; it makes money on the margin between the cost of dishes and their selling price, multiplied by the number of covers.

1. Identify your revenue streams

List precisely where the money comes from. A single stream at the start is perfectly fine — it's even clearer. If you have several (sales, subscription, services), rank them by weight: which one makes up the bulk of revenue?

2. Understand your cost structure

Distinguish fixed costs (rent, salaries, subscriptions — paid even with no sales) from variable costs (raw materials, commissions — which rise with activity). This distinction is the foundation of everything else: without it, you can't compute your break-even point or your margin.

The link to profitability

The heavier your fixed costs, the more volume you need to be profitable. The lighter they are, the sooner you break even. A funder watches this ratio: it tells them how risky or resilient your model is.

3. Set a price that holds

Your price must cover your costs and produce a margin and stay acceptable to the customer. Don't price "by feel": start from your cost price, add the target margin, then check the result is consistent with what the market charges. A big gap is a signal to dig into.

4. Sum up the model in one sentence

The final test: can you explain your model in one sentence, to someone who knows nothing about your sector? If yes, it's clear. If you need three paragraphs, it isn't yet — and a file that isn't quickly understood is a file that gets put down.