We all have dreamed of owning our own business but sometimes feel it will be too much work. Say Hi to Turnkey Businesses! These ready-to-go operations are becoming increasingly popular nowadays. You can jump into becoming a business owner without starting from scratch.
Today, we’ll explore what a turnkey business means and why it might be the perfect fit for you with its pros and cons.
What is a Turnkey Business?
Have you ever heard the phrase “Just turn the key and you’re ready to go”? Well, that’s exactly what a turnkey business is all about.
Turnkey Business is a business that’s ready for immediate operation, allowing you to start running things from day one. The term “turnkey” comes from the idea that you only need to turn the key to unlock the doors and start operating. It’s a business that’s already functioning correctly and at full capacity from the moment you receive it.
Imagine walking into a fully set up shop, with everything in place. It is essentially a pre-packaged business opportunity. It’s all set up and ready for you to take over.
What makes a business truly turnkey? Here are some key features:
- Proven Business Model
- Ready-to-Use Systems
- Standard Operating Procedures
- Established Customer Base
- Marketing Materials
There are several types of turnkey businesses out there. Here are a few common ones:
- Franchises: You can get franchises of popular chains like Tim Horton’s or Subway. These come with a proven business model and an established brand.
- Existing Businesses: You can buy an already established business from someone looking to retire or move on.
- Websites: Yes, there are turnkey websites that are e-commerce stores or service businesses with employees, where you can become the new owner.
- Properties: Turnkey properties, like apartment buildings or offices, often come with management teams already in place.
Before moving on, remember It’s not a guaranteed success, but it does give you a head start on your entrepreneurial journey.
Advantages of Buying a Turnkey Business
Buying a turnkey business might just be the perfect solution if you want an easy entry to becoming a business person. Let’s dive into some of the awesome perks that come with this ready-to-go option:
Proven Business Model
One of the key advantages of a turnkey business is that you’re stepping into a system that’s already been tried and tested.
Someone else has already worked out the kinks and created processes that are proven to generate success in that industry. This means you’re not flying blind – you’ve got a roadmap to follow that’s already shown results. It’s like getting a cheat sheet for your business exam!
Immediate Cash Flow
This is why turnkey businesses are so popular: you can start making money almost right away. You don’t have to wait for months to see a profit because these operations are already running and making money. So, after the initial investment to buy them, you don’t have to burn the cash to get initial returns.
Established Customer Base
Last but not least, one of the relaxing things with such operations is that you do not start with zero customers. You’re inheriting a pre-existing customer base. They’re already there, ready and waiting for you! This can save you a ton of time and money on marketing and customer acquisition.
Potential Drawbacks to Consider
While turnkey businesses offer many advantages, it’s important to be aware of some potential drawbacks. Let’s take a closer look at what you might face:
Higher Initial Costs
With all those perks above, it’s a no-brainer that turnkey business comes with a hefty price tag. They can cost anywhere from $5,000 to many thousands of dollars, depending on what features you’re after. The thing is you’re not just buying equipment or inventory; you’re purchasing an established brand, customer base, and proven business model.
Limited Flexibility
When you buy a turnkey business, you’re stepping into someone else’s vision. This can limit your ability to make changes or put your stamp on things. You might find yourself restricted by existing branding, systems, or processes.
Want to launch new products or services? It could be challenging. Thinking about freshening up the decor? That might not be so simple. These limitations can sometimes make it hard for the business to truly feel like your own.
Inherited Problems
Here’s where things can get tricky for beginners. When you buy a turnkey business, you’re also taking on any existing issues like dealing with employees, maybe the equipment needs repairs, or problems with suppliers. There can be cash flow problems too.
These problems might not be immediately apparent, so even after a thorough review, you might miss something. However, that’s not a deal because the business owner needs to know how to fix things.
But a great advice from us will be to specifically check the business reputation among its customers. If that’s good, then solving these problems will eventually bring more money.
How to Buy a Turnkey Business?
First, start by asking yourself why you want to buy a turnkey business and if it aligns with your goals.
Then, Look into the company’s financial health, cash flow statements, and P&L reports, company assets including sales, permits, any legal liabilities.
Last, you need to analyze if the business is too dependent on the current owner. That’s the final confirmation you need from your side.
We can understand that for first-timers, it’s difficult to evaluate it carefully. That’s where online platforms come to your side that will do all the due diligence and proper transfer of ownership. We, at Ecomswap, are one such platform, known for small and medium-scale online turnkey businesses that you can start from your home.
Conclusion
At last, Buying a turnkey business is an easy option for anyone who wants to become a business owner without building a business from the ground up. Still, it depends on your goals and budget. If you have still not owned a business before, here is an easy guide to buying an online business, so that you understand how others are doing it.