There are nearly limitless formats for business models today.
Currently in existence, are innumerable franchises, direct sales, traditional brick-and-mortar stores, and even advertisement-based businesses.
Moreover, hybrid variants of all of these business models and more, exist in concentrated niches of profitability. E-commerce stores that also double their efforts with more traditional means of distribution and physical presence, are a prime example of the varied business landscapes that exist today.
A great example of understanding the variability and viability of a business model, is Ray Kroc. Ray was the founder of McDonald’s franchise as we know it today.
When Ray questioned a group of MBA students as to what business they thought he was in, they expressed openly, “Why, the hamburger business of course.”
To this, Ray replied, “No, my business is real estate.”
The irony of this statement is most likely not lost on many students of history today.
Ray was a visionary who understood business far better than his competitors. It was true that a portion of his business was based on selling fast-food goods, undeniably so in fact. Yet for his own purposes, this was merely so that he could sell franchising rights to the real estate (i.e.: restaurants) that he owned.
In effect, Ray was a landlord for franchisees that wished to be a part of his rapidly expanding McDonald’s corporation. The fast-food merely served to employ those who would operate the franchises on his behalf.
This business model meant that for Ray, the food was secondary to the actual property the restaurants were situated upon.
Ironically enough, everyone was fixated on the foodstuff, without comprehending Ray’s actual motive as a businessman.
By purchasing highly sought-after real estate in the suburbs, Ray was creating value for his company. Employing franchisees to operate the restaurants meant that he had steady income to purchase even more real estate. This cycle continued for decades, even as Ray’s net worth soared.
By the time of his death, the franchise chain “had over 7,500 outlets in 32 countries.”