The Hybrid Business Model

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Written by Kelly L Reese, President & CEO of Retire Quickly Corporation.

1. The critical distinguishing characteristics of each of the three basic home based business models.
2. The strengths and weaknesses of the three models.
3. Why combining the three models produces a superior income opportunity.
4. Why the Hybrid home based business model radically improves your chances for success.

There are three basic business models. 1) Traditional, 2) Franchise, 3) Network Marketing, also known as MLM or Multilevel Marketing

The traditional business, such as the local family owned restaurant, is the most familiar and the oldest model. Franchising, such as McDonald's Hamburgers, is the second business model; and Network or Multilevel Marketing is the third. There are numerous variations of network marketing, but they all pay income through multiple levels.

Each of these three business models has it's own strengths and weaknesses. THE HYBRID BUSINESS MODELuses the strengths of one model to offset the weaknesses of another.

The Hybrid has unparalleled power, as you will soon learn. Let's begin by examining each business model. We will learn each one's strong points and also its weak points. Then we will create the HYBRID business model by using what we learn from analyzing all three models.

The traditional business has very few good points for average people, but it does have a few. The traditional business is where we get the concept of the "Entrepreneur". This is where it all began. It was the path every pioneer businessperson chose. It was the path to the proverbial "American Dream". Owning a traditional business was the chance to become the employer, instead of the employee.

In short, it was a chance for a gambler to invest his entire life-savings in a new business for the chance of being his own boss and in control. Most who have tried over the years lost it all; and to this day, most who try their hand at starting a traditional business still lose it all.

The negatives of the traditional business model are many. The cost to start a small business can be frightening. Usually, the owner must do many things very well to even have a chance of survival. Hiring, training and firing of employees are not easy tasks, but they are some of the easier problems.

Learning how to keep books and to deal with payroll taxes and worker's compensation issues are enough to scare off many folks. Probably the single most important negative, even for those who can afford the startup costs, is the high probability of too many months of losing money.

The negative cash flow frequently is crushing. What makes this even more notable is the fact that these folks are amongst the most aggressive folks on the planet; yet even with their risky nature they simply can't borrow enough money to keep the doors open in many cases.

The one thing that is of immense value in the traditional business model is the chance to be in CONTROL of your own financial future. It is your business and, unlike a franchise, you do NOT have to follow a lot of strict rules. You really are the boss.

The second business model is the franchise. It hasn't been all that many years ago that "franchises" were looked down on as less than "real" businesses. Have you seen a McDonald's lately?

Franchising is now clearly seen as a dominant force in the free enterprise system. You can go virtually anywhere in the world and you are very likely to find one or more major franchises.

My wife and I have visited many of the Caribbean Islands. We have found McDonald's, Burger King, Hard Rock Cafe and others on almost every island.

The estimated 95% business failure rate isn't caused by 95% of the businesses being defective. Most of it is caused by unprepared people who are ill equipped to manage a business. They will wake up in the morning without knowing what they should be doing first.

This is not only a tragedy, it is an avoidable tragedy. That can clearly be proven by the fact that many more franchises succeed than all other forms of business. It makes perfect sense. Someone who understands business puts a blueprint for success together, and smart folks who want to learn how to be successful will follow the blueprint.

However, the franchise also has more than its share of problems for the average person. The first one is the huge "purchase price." That alone almost eliminates everyone, but a few.

Even if you can afford the price, you are still faced with employee problems, very long hours and having to constantly worry about protecting your big investment. These franchise businesses can also produce many months of negative cash flow.

Clearly, the single greatest benefit of the franchise is a professionally designed blueprint for success. It is called a Business Plan. And, like all good business plans, it will also include a marketing plan, that spells out what steps the franchise needs to take in order to take a product or service to the marketplace.

This is the single biggest weakness in all businesses that I have had the privilege to evaluate. It just doesn't matter how wonderful your wonder-widget is if you don't know how to "tell the world" about it so people will buy it.

However, there is one more very critical aspect of franchises that make them superior to traditional businesses and to the vast majority of MLM opportunities. Franchises provide all the training. Each new franchise owner is NOT left to flop around and eventually self-destruct from a lack of training.

Now, let's consider our third business model. Network or Multilevel Marketing (MLM). MLM, just like the franchise, is becoming accepted as a very real and powerful form of business.

That becomes crystal clear when you see companies like Coca Cola, General Electric, Ford Motor Company and Sprint, just to name a few, using MLM to distribute their own products and services.

The largest business trend in history is being fueled by countless millions of people from all over the world who passionately desire a business that they can successfully manage from a home environment.

Let's make an important distinction. Home-based is not the same as a home business. Many people operate from a home base, but spend half their life traveling all over the globe or their own surrounding community.

A true home business is one that does NOT require you to leave home, except on the rarest of occasions.

The desire for a home-based business or a true home business virtually eliminates the traditional and franchise forms of business, because there are very few that can be adapted to the home environment.

Yes, there are a few professions, such as attorney, accountant, insurance agent, Realtor, and a few others that can adapt to a home based environment. Some in those professions have made the decision to leave the traditional "Office" environment and they have moved to a home office. But that doesn't solve the problem for the masses that work in situations that do not allow that option.

Upon even the most casual inspection, most traditional and franchise businesses are eliminated for reasons far more critical than the fact that they can't be managed from home.

What percentage of the countless millions who desire to own their own business could possibly afford to purchase a franchise? Certainly a few, but we are left with a mass of humanity that can't possibly solve their problems by purchasing a franchise.

Well, the same thing is true with starting a traditional business. The cost to set up even a fairly small business can be extremely restrictive.

Is it any wonder then that millions of folks are trying network marketing today because of the radically lower startup costs?

OK, so millions of people can afford to try network marketing when they can't afford to buy a franchise or to start a traditional business. And.... so what if network marketing can provide a home-based business opportunity.

Unfortunately, it's also a business model that guarantees failure for about 95% who would try their luck; because the majority of folks can't sell and they don't know how to manage their personal finances, and they certainly don't know how to properly manage their business.

It might surprise you, but one of the biggest problems with network marketing opportunities is that they are too inexpensive. Yes, this does help more people to afford to start their own business, which is a blessing. However, too many will join a new program and because they have invested virtually nothing they will do virtually nothing.

The very low cost also creates another problem. Most folks can't "believe" they can earn any significant income from something that requires such a small sacrifice.

In spite of all the problems, the network marketing business model offers some very valuable benefits.

The ability to run a multi-million dollar international business without having a single employee or even one dime of inventory is more priceless than most can ever imagine.

The most extraordinary benefit is the potential to earn money from the money, talent and efforts of others in your network for many years after you have stopped actively working your business.

The "Hybrid Business Model" is a wonderful concept. I created the name Hybrid business model to describe a small number of network marketing programs that are unique.

I would never suggest that you leave a good program you enjoy, and believe in, to find a company that uses the Hybrid model. However, if you don't already have a good income opportunity or if you are fearful that you are going to fail with your current program, I would strongly suggest that you find a program that does use the Hybrid model.

A company that qualifies as a Hybrid will provide you with many franchise-like benefits. You will have training provided at the company-level so that everyone is trained the same and so you don't have to spend your valuable time trying to train your downline. And, you won't be dependent on a sponsor who may not know much more than you do.

You will also have a business plan laid out for you so that you just have to follow the steps. You will not have to wake up and wonder "where do I begin today".

In short, the Hybrid business model provides you with the "be-your-own-boss" benefits of a traditional business, the "blueprint for success" benefits of a franchise, and the extraordinary host of benefits of the network marketing business model. The Hybrid business model is a great example of designed synergy!

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