CANVASStartups don't fail because they lack a product; they fail because they lack customers and a profitable business model.” Steve Blank Is anidea a Startup? Or maybe it becomes one when there is a certain product involved? Of course, it’s not that simple and many entrepreneurs fall into this pit of misunderstanding while talking about their first business. One could say that a businessman "knows his onions’ when he is able to explain at what cost and utilizing which resources, he will provide what service/product to what customers (meaning, what sort of problem is he solving or what demand is he meeting). Itis notall, though, and will vary depending on a type of business ~ but this concludes a concept called "business model” We are presenting you 2 methods that will help you answer (or first, ask) some crucial questions. BUSINESS MODEL CANVAS It isa visual, usually presented on one page, template divided into 9 sections. It was proposed by Alexander Osterwalder and is commonly used in strategic planning or constituting a business model. It consists of: Customer segments - proposed as a starting point while employing this method. Here one should concretize and describe people and/or organizations which will be the beneficiaries of this enterprise. Value proposition - these are the benefits that clients will get if choosing this provider instead of competitors. It states what does the business offer and how is it better than other solutions available on the market.Channels - ways of reaching out to customers, delivering value, and finalizing the transaction. It explains how will one get to his clients and sell his proposition Customer relationship ~ since we already know who are the clients, we want to know what sort of relationship (and by what means) we want to have with them. Key resources - material and immaterial resources that allow the value to be created and delivered. Key activities - what sort of actions does the business have to undertake in order to function in an assumed manner. It takes all so far identified features and puts them in terms of processes. Key partners - entities crucial (or even obligatory) for the enterprise to operate. It usually consists of sellers, suppliers, and subcontractors. Cost structure — often overlooked, yet so important. By knowing how much does it cost to engage in certain activities - one can calculate if the business is profitable or when it will start paying off. Revenue ~ all financial considerations regarding the profit - such as gross margin, what are the things that the business charges for, and so on.CONCLUSION The Business Model Canvass is often criticized for not underlining enough the importance of competition. Yet it is commonly used and praised for putting an emphasis on a value that a certain undertaking is creating and providing a rather exhausting (and based in business literature) overview of components constituting a business model. Download the template here. RECOMMENDED READS Brandenburger, A. M., & Stuart, H. W. (1996). Value-based Business Strategy. Journal of Economics & Management Strategy Magretta, J. (2002). Why business models matter. Harv Bus Rev