Turnkey Business with Examples | How does it work?
Commencing a business from scratch can be daunting, especially for those lacking the experience, resources, or time to do so. Fortunately, there is another option available: turnkey businesses. The idea behind this model is to offer a fast and convenient way for entrepreneurs to run ready-to-operate businesses. Research shows that 20% of independent businesses close after two years, but 92% of franchising businesses continue working after two years.
In this blog, we’ll explore such businesses in more detail, including how they work with some related examples.
What is Turnkey Business?
A turnkey business is a business model in which an established company or individual provides a fully functional business to a buyer, ready for immediate operation. Essentially, the buyer needs to “turn the key,” and the business will be up and running.
The key advantage of such operations is that it provides a low-risk way for entrepreneurs to operate a business. The business is already established, so the buyer doesn’t need to worry about building the infrastructure or developing a customer base from scratch. Instead, they can focus on running the business and generating profits.
How Turnkey Business Works
These businesses typically involve a seller or company providing a buyer with everything they need to start operating a business. Once the buyer has purchased it, they can start operating it immediately. This can include;
Products or Services
The seller will often provide the products or services the business offers. This could include physical products, digital products, or services such as consulting or coaching.
Marketing Materials
The seller may also provide marketing materials like a website, social media accounts, and advertising campaigns.
Training and Support
To ensure that the buyer can operate the business successfully, the seller may provide training and ongoing support.
Turnkey Business Examples
Franchises
Franchises are a popular type of turnkey business. NBC News shows that franchises have a success rate of 90% compared to other businesses that start from the ground up. In a franchise, the buyer purchases the right to use an established brand name, a proven business model, and a marketing plan. The franchise company provides the buyer with training, ongoing support, and marketing materials. The buyer then opens a franchise location, using the established brand name and business model to attract customers.
Examples of popular franchises include McDonald’s, Subway, and Dunkin’ Donuts.
Real Estate
Turnkey real estate investments also offer ready-made solutions for operations. In this case, the buyer purchases a property already revamped and ready for tenants. The buyer then finds tenants and starts collecting rent.
E-commerce Websites
E-commerce websites are a popular type of online turnkey business. The seller provides the buyer with a pre-built website, complete with products, a payment gateway, and a marketing plan. The buyer then takes over the website, promotes the products, and collects revenue from sales. For example, Shopify, dropshipping websites, and eBay stores provide options for such business operations.
Affiliate Marketing Websites
An affiliate marketing website is another turnkey operation example. In this activity, the seller provides the buyer with a pre-built website with affiliate links to products. The buyer then promotes the website, generates traffic, and earns a commission on sales made through the affiliate links. ShareASale, Clickbank, and Amazon Associates are the platforms that offer turnkey solutions.
How to Start Turnkey Business
Research
First, you need to research different options that best fit your needs and interests. This can involve researching different industries, franchises, or online businesses.
Budgeting
Determine your budget for the business and assess your financial situation. You may need to obtain financing to purchase the ready-to-operate business.
Contact Business Owner
Contact the provider of the business you are interested in purchasing. They will provide you with more information about the business and answer any questions.
Purchase and Start Operations
Once you have decided on a franchise or online website, purchase it from the provider. Take over the business and begin operating it immediately. This can involve hiring staff, implementing marketing strategies, and managing day-to-day operations.
Follow any guidelines provided by the provider of the company.
Measure and Refine
Monitor the performance of the business and make adjustments as needed. This may involve tweaking marketing strategies, adjusting prices, or changing the products or services offered.
Conclusion
In conclusion, a turnkey business is a pre-packaged and fully operational business that a buyer can quickly and easily set up. However, it is essential for buyers to thoroughly research the business they are interested in and ensure that it is a good fit for their needs and goals before making a purchase.
