Who doesn’t like to have their cake and eat it too? Nowadays, many people want to own a successful business, but they also want it to run smoothly – and efficiently - with minimal effort. Building such a company from the ground up requires time and expertise, which some people don’t necessarily have given their hectic lifestyles. Fortunately, a turnkey business offers a solution by providing a setup that’s ready to operate. All you need to do is “turn the key,” and you’re off.
If that sounds confusing, don’t worry. We’ll simplify the concept of a turnkey business for you. Plus, we’ll explain how you can buy a turnkey business that allows you to come in and scale things immediately. Here’s everything you need to know about turnkey businesses.
What Is a Turnkey Business?
A turnkey business is a business that’s ready to run from day one. It already has a business model, name, logo, website, products, equipment, and customer base. What makes it an attractive investment opportunity is that you get to skip many of the traditional set-up steps, as somebody has already defined all of the inputs, processes, etc. The buyer of a turnkey business just requires some labor and capital investment to make it grow. Entrepreneurs often decide to invest in a turnkey business because it allows them to make returns sooner.
One of the most popular examples of a turnkey business is a pre-made website. This is a completely functioning website equipped with all the essentials you need to generate revenue and visitors. In the case of a turnkey website, you don’t have to buy a domain name and web hosting or integrate product reviews and checkout functionality if it’s an ecommerce site. Everything is already pre-purchased and configured for you. So you just need to take over and find ways to monetize the business.
Turnkey businesses exist in a range of industries, including automotive, fashion, pet products, electronics, and more.
What Does Turnkey Mean in Business?
In theory, the term “turnkey” refers to something that is ready for immediate use with no improvements or modifications required. And it’s the same concept in the world of business. Turnkey means no branding, no sourcing, no integrating - you just buy a business and start managing it. In a turnkey acquisition, an established business model is already in place and the products have been defined, so the initial phase is already complete. At one turn of the key, the business will start running. Hence, the phrase turnkey could also imply that little work is needed on the buyer’s part other than finding ways to attract and keep customers.
What Is the Difference Between A True Turnkey and A Partial Turnkey Business?
A true turnkey business is a complete package that allows the individual buying it to start operating immediately. In contrast, a partial turnkey business requires the new owner to perform some tasks to get the business running. For instance, some people might only acquire the rights to sell a particular product, without any of the tools that they might need to do the job. In this case, they would need to establish sales channels separately. This is an example of a partial turnkey business.
Typically, true turnkey business opportunities cost more than partial turnkey businesses because they offer a lot more. Buying into them can eliminate much of the headaches associated with establishing a new business. Plus, having a proven blueprint to follow can give the new business owners confidence to pursue their dreams with great tenacity.
Does A True Turnkey Business Really Include Everything?
Expect the staff that might be needed to run the business – yes, a true turnkey business offers everything. You get access to established processes, inventory, systems, tools, vendors, and marketing materials when you invest in a true turnkey business. That said, a turnkey model only promises to put you in the driver’s seat. Running the business and getting new customers will be your job. As such, you’re paying for the resources it took to set up everything and get the operation ready for you to start.
How Is a Turnkey Business Different from a Franchise?
A turnkey business gives you the freedom to manage the operations how you see fit. It does not have ongoing commissions or royalties after the initial cost of purchase. Also, a turnkey operation doesn’t restrict you to specific tools or processes, although the seller provides you with the resources needed to run the business. When you buy a franchise, you acquire a business whose nature of operations might be highly restrictive. For example, franchisees are often subject to contractual obligations, such as the type of marketing that can or cannot be executed. Plus, you have to pay an ongoing fee to the franchisor for the rights to their brand, intellectual property, and services.
Although some franchises are classified as partial turnkey businesses, a non-franchise turnkey operation is what gives you total control over every facet of the acquired venture. Also, turnkey businesses often cost less than franchises despite the flexibility they offer to aspiring business owners. The important thing is to be mindful that the price you pay for acquiring a turnkey business offers a true turnkey opportunity.
Who Should Invest in a Turnkey Business?
Buying a turnkey business makes sense for everyone, but the investment is particularly suited to busy people interested in owning a business without getting involved in the setup. Turnkey business opportunities don’t typically require you to change your 9-5 routine, or drop any side hustles to run them successfully. Once you learn how to operate the company, you can set your own hours and work on whatever you want. Smart entrepreneurs acquire great businesses that can run without them.
You can finance a turnkey business through your own savings. If you are short of funds, using a credit or bank loan can be an option, so as not to miss out on a lucrative opportunity. Alternatively, you can ask your friends and relatives to contribute in return for a stake in the business. It might also be possible to get backing from the Small Business Administration if you manage to present a solid business plan. Whatever route you take, make sure you have enough in the bank to cover your living expenses so that you’re not completely dependent on your new business venture at the start.
What Are Some Good Turnkey Business Opportunities?
If you’re set on the idea of buying a turnkey business, then it’s crucial to figure out what type of operation is right for you. This requires a careful evaluation of the business’ nature and whether you have the passion and expertise to run it efficiently.
For example, if you’ve worked as a manager for a fast-food chain, maybe you’d like to have your own fast food setup, complete with pre-existing equipment and established contracts with food suppliers and commercial leasing companies. In this case, you could look for a local fast food business that’s already established and waiting for a new owner to come in and generate revenue. You can find such turnkey business opportunities through classified listings or buy/sell groups on social media platforms.
It’s worth mentioning that business transfer in an offline turnkey acquisition takes a while, as the buyer and seller have to meet multiple times to finalize terms and complete the deal. Also, the potential owner might require additional time to vet and determine the value of the business.
If you want to get started quickly, investing in a turnkey website could be an option worth exploring. This type of website is essentially an online business that possesses all the systems and functionality required to establish its footprint. Absolutely no development or configuration is required on your part. Turnkey websites most commonly facilitate ecommerce operations because consumers’ preference to buy goods online has skyrocketed in recent times.
Purchasing a Turnkey Website
Buying a turnkey website is much easier than buying an offline turnkey business. For one, you can evaluate whether the online business is offering a true or a partial turnkey opportunity from the comfort of your couch. Analyzing the website’s listing and what the sale includes will help you identify whether you can start operating it right after the operation or would need to do some additional work to get the site running.
There are many online business brokers out there designed to help you buy a turnkey website – including Exchange Marketplace. (Okay, this is a no-so-humble brag. But it’s for good reason. And we’ll prove it!).
Here at Exchange, we continuously vet and curate a unique selection of turnkey websites. These online businesses are equipped with all the crucial elements to make it easy for you to start operating them. Whether you’re looking to buy a turnkey online fashion store, want to acquire a done-for-you pet supplies ecommerce website, or wish to take over an established reselling business, you’ll find what you need on the platform.
Benefits of Exchange
- Various options: Exchange lists turnkey websites for sale from various industries, including fashion, automotive, home and furniture, gifts, construction, food and drink, general, electronics, and more. You won’t be short of profitable investment opportunities when using this platform.
- Safe transactions: With thousands of people selling business on the internet, it’s challenging to distinguish genuine sellers from fraudsters. Exchange helps you protect your money and yourself by offering various ways to check a seller’s legitimacy. You can analyze the profit and loss of their business, communicate with them directly within a listing, and safely pay via Escrow once you agree to a price.
- Legitimate figures: A common risk in buying a turnkey website is that the seller may have inflated their figures to show higher sales and traffic. Exchange eliminates this risk by automatically calculating monthly visits and revenue for the seller once they list their site on the platform.
How to Buy a Turnkey Business?
Before investing in a turnkey opportunity, you’ll want to evaluate whether it’ll be a good fit for your needs. Although everyone uses their own criteria to assess a turnkey business, a few factors go into every analysis. Below are some things to look at to make sure you’re making a good investment.
- Business model – How is the business going to make money? Is its revenue strategy sustainable?
- Market demand – Is there enough demand for the business’s products or services?
- Skill alignment – Do I have the skills to manage the things involved in running the business?
- Fine print – Are there any outstanding contracts with vendors and other parties? If yes, do they allow the transfer of work to a new owner?
Additionally, you want to find out why the business is for sale. Doing so is important because you don’t want to invest in a turnkey operation that comes loaded with issues. For example, a business valued at a low price might include outdated systems, or the demand for its products might be experiencing a decline. It’s always worth knowing the reason behind the sale so you can analyze if it’s worth acquiring such a business.
Creating a business is time-consuming at best, and often presents several hurdles for the aspiring entrepreneur. Buying a turnkey business can be a faster way to start operations, reduce risks, and make a profit – provided you identify the right opportunity. Hopefully, the tips mentioned above will help you choose the best turkey opportunities and get a solid return on your investment.