If you\u2019re looking for a straightforward entry to entrepreneurship with a high chance of making a fast return, you should look into turnkey businesses. These types of businesses are ready to operate the moment you take ownership. Some of the most common turnkey businesses are franchises, direct sales initiatives, and property investments.<\/p>\n\n\n\n
A business that is ready to generate revenue immediately might sound like the perfect investment. However, it\u2019s important to look at the entire picture, including the drawbacks, to make sure it is the right investment choice for you.<\/p>\n\n\n\n
A turnkey business is a business that\u2019s already operational or ready to launch from the moment you take ownership. The seller takes full responsibility for ensuring all business processes are in place, which means all the buyer has to do is put their money where their mouth is. When you purchase a turnkey business, you\u2019ll pay a lump sum and all of the standard startup tasks generally involved in starting a business will be handled for you.<\/p>\n\n\n\n
To be a true turnkey business (i.e., just turn the key and go), it should have a proven business model and an ability to generate revenue immediately. Many (but not all) franchises can be considered turnkey businesses, particularly franchise resales<\/a>, which are existing and operational franchises that are up and running.<\/p>\n\n\n\n Turnkey businesses are attractive to entrepreneurs because they allow you to hit the ground running and essentially skip the startup stages of building a business.<\/p>\n\n\n\n Franchises are among the most common turnkey businesses, largely due to their established brand loyalty and impressively low failure rates. But if you\u2019re looking for other turnkey companies, there are plenty of options on the table. <\/p>\n\n\n\n In most cases, turnkey properties are fully furnished homes you can purchase and make an immediate rental income. It\u2019s even possible to find turnkey properties with existing tenants, though, make sure to check the remaining lease term if this investment type interests you.<\/p>\n\n\n\n In other situations, a turnkey property may be in need of renovation, with property management firms selling it to investors in return for a kind of profit-sharing arrangement. The buyer purchases the home from the property management firm and pays for renovations and a management fee in exchange for ownership of the property and rental income.<\/p>\n\n\n\n Another option is to purchase properties and hire a separate company of your own choosing to manage them.<\/p>\n\n\n\n If you have the capital and want a low-maintenance investment, a turnkey property is an excellent choice.<\/p>\n\n\n\n Most direct sales and multi-level marketing (MLM) operations enable anybody to immediately become consultants within the organization. Based on how little training it takes to get up and running with these types of businesses, they can be considered turnkey. <\/p>\n\n\n\n A famous example of an MLM company is Mary Kay, which has product lines such as skincare, makeup, and fragrances. Participants in the company purchase inventory from Mary Kay at wholesale prices and then profit from selling the products at retail prices. However, you also gain a percentage of the sales of any recruits you bring to the company.<\/p>\n\n\n\n While it\u2019s true that direct sales and MLM schemes can be lucrative for some, I recommend exercising caution. In practice, many of these companies operate pyramid scheme-like structures, where participants end up making most of their income through new recruits. If you are considering investing in an MLM company, do your due diligence<\/a> and look into their history, litigations, business practices, and ethical standards.<\/p>\n\n\n\n Business owners frequently sell their fully operational businesses to sellers willing to buy them out for a fair sum. Many people sell up when they simply want to retire and make the most of their fortunes. In other situations, a business owner may wish to move on to new projects or devote more of their time to other areas of life.<\/p>\n\n\n\n Here are some examples of traditional businesses<\/a> that are commonly sold as turnkey solutions:<\/p>\n\n\n\n All of these businesses are attractive turnkey opportunities because they can be taken over by a buyer and continue generating revenue from day one.<\/p>\n\n\n\n A franchise<\/a> is a business arrangement in which the owner (the franchisee) enters into a profit-sharing arrangement with a parent company (the franchisor<\/a>). As the franchisee, you purchase the rights to sell the services of an established brand using their trademarks and operational guidelines. As franchising agreements<\/a> typically include things like a predetermined business structure, procedures, supply lines, and advertising, they can sometimes be considered turnkey businesses.<\/p>\n\n\n A clear, step-by-step breakdown to help you decide if franchising is right for you\u2014and how to get started.<\/p>\n\n\n\n\t\t\t Whether or not a franchise can be considered a true turnkey business depends on how many aspects of it are up and running when you invest in it or take over. If you buy a fully staffed and operational franchise from a franchisee at the end of their lease term, it\u2019s a turnkey business. On the other hand, if you purchase a franchise and lay the groundwork for the new location, it is not turnkey.<\/p>\n\n\n\n As I\u2019ve discussed, all franchises contain some turnkey elements<\/strong>. You won\u2019t be starting a business from scratch since investing in a franchise comes with an existing business model and brand recognition. Franchising comes with far fewer obstacles and initial tasks to get going than startups<\/a> or independent businesses. However, this doesn\u2019t mean that investing in a franchise is easy. You should still prepare for a lot of hard work.<\/p>\n\n\n\n If you plan to open a franchise, you\u2019ll need to select a location, develop or renovate a property, hire employees, hold a grand opening, stock your unit with inventory, and so on. <\/p>\n\n\n\n While you\u2019ll certainly have your work cut out for you, a reputable franchisor will provide plenty of initial support and training to help you get the business off the ground.<\/p>\n\n\n\n Investing in a turnkey business can be a smart way to make your money work for you if you have plenty of capital to start with. <\/p>\n\n\n\n Franchises and other established independent companies come with a proven business model and a track record of success. When you invest in a business that\u2019s already up and running, you can mitigate your financial risks and ease the complex task of getting a company off the ground. <\/p>\n\n\n\n Building a customer base is one of the biggest challenges for new businesses and a key reason many startups fail. Whether you buy an established business or invest in a franchise, you can generate immediate revenue with an existing customer base. Instead of focusing on building a new audience, you can identify areas for improvement and find ways to further capitalize on your customer base.<\/p>\n\n\n\n Starting a company from scratch often means doing most of the hard work alone, particularly if you don\u2019t have a partner<\/a>. When you purchase a turnkey business, you\u2019ll likely receive support and assistance from the seller. The current owner may agree to remain on as an employee for an interim period to help you learn the ropes. If you buy a franchise, your franchisor will provide ongoing support and help make important business decisions regarding operational procedures and advertising.<\/p>\n\n\n\n All investments come with some level of financial risk. That said, many types of turnkey businesses have much higher success rates than startups. For example, some studies suggest franchises have a failure rate of just 20%, compared to 90% for startups<\/a>.<\/p>\n\n\n Sign up for our free email newsletter. It’s a 5-minute read once a week to help you level up on the franchising industry.<\/p>\n\n\n\nExamples of Turnkey Businesses<\/h2>\n\n\n\n
Turnkey Properties<\/h3>\n\n\n\n
Direct Sales and Multi-Level Marketing<\/h3>\n\n\n\n
Traditional Businesses<\/h3>\n\n\n\n
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Franchises<\/h3>\n\n\n\n
Download the First-Time Franchisee Guide<\/h4>\n\n\n\n
Are All Franchises Turnkey Businesses?<\/h2>\n\n\n\n
Pros of Investing in a Turnkey Business<\/h2>\n\n\n\n
Established Business Model<\/h3>\n\n\n\n
Existing Customer Base<\/h3>\n\n\n\n
Additional Support<\/h3>\n\n\n\n
Lower Failure Rates <\/h3>\n\n\n\n
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