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Want to Skip the Startup Grind? Here’s How Turnkey Businesses Can Help
By Quiet Light
Imagine walking into your new company on day one and everything you need to run the business smoothly and successfully is already in place—with little effort from you. If that idea sounds like your entrepreneurial dream, buying a turnkey business could be a great way to reach your business goals.
While some entrepreneurs love starting businesses from the ground up, there are some key advantages to purchasing a turnkey business. The right turnkey business lets you skip the startup grind that many founders experience. Turnkey businesses come with a proven business model and established operations. That gives you the freedom to focus on high-growth activities on day one.
In this article, you’ll learn:
- Exactly what a turnkey business opportunity is
- The advantages and challenges of investing in a turnkey business opportunity
- Some of the most popular (and profitable!) types of turnkey businesses
- The two ways to find the right turnkey business opportunity for you
What is a turnkey business opportunity?
Before we discuss the pros and cons of investing in a turnkey business opportunity, let’s take a moment to define our terms. So, just what is a turnkey business?
Simply put, a turnkey business is any business that is ready to go immediately after purchase. The new owner simply has to “turn the key” to unlock the door and the business is up and running. For most turnkey businesses, the only step left for the buyer is to hire staff.
Why do entrepreneurs invest in turnkey businesses?
There are a number of reasons why you might decide to pursue the purchase of a turnkey business, including:
- The opportunity to skip the stress normally involved with starting a business from scratch
- An established customer base
- Proven business models
- Minimized financial risk
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There are many different types of turnkey opportunities across business industries. You could purchase a turnkey website and enjoy minimal upfront work as the new site owner. Or, you might purchase any existing business where the previous owner includes the equipment and current customer base.
Another option is to invest in a turnkey property, where apartment buildings or offices already have a management team on the ground to help you with day-to-day operations.
“A turnkey business is any business that is ready to go immediately after purchase.”
Turnkey business versus franchise opportunity
At first glance, franchise opportunities seem nearly identical to turnkey businesses. However, there is a main difference that you should be aware of.
What are the similarities between franchises and turnkey businesses?
If you’re looking to purchase a business that allows you to hit the ground running, turnkey business opportunities and franchises are great options to explore.
When you buy a franchise, everything you need to operate the business is included in your purchase. You’ll have access to branding and marketing tools, and you’ll operate under a recognizable brand name. That proven business model and reputable marketing makes for a low-risk investment for you.
All of those benefits are also part of purchasing a turnkey business. If you purchase a pre-existing business, you assume ownership and jump right into day-to-day operations. An established customer base, recognizable brand name, and proven business model take all of the guesswork out of the typical start-up grind.
What are the differences between a franchise and a turnkey business?
While many people think that the words “turnkey” and “franchise” are synonymous. And while there are many similarities that we’ve identified, franchising and turnkey businesses don’t belong in the same business opportunity category.
The main difference that separates these two business opportunities is the freedom you experience as a business owner of a turnkey business versus the restrictions and commissions that come with owning a franchise.
The official International Franchise Association definition of a franchise is a “method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system.”
In other words, when someone creates a franchise, they create a business model that they sell to franchisees who own and operate the business in different locations. The franchisee pays ongoing franchise fees and commissions for the rights to use the franchise model and operate under that brand.
True turnkey businesses give you freedom and flexibility
When you purchase a franchise, you receive ongoing business support from the franchise. However, in exchange for ongoing business support, franchise owners are also beholden to franchisor’s overall brand vision. This means that you won’t have as much creative room to make a business your own.
For instance, you might be interested in a Chick-fil-A franchise opportunity. If you purchase a Chick-fil-A franchise, everything from branding to the interior design of the store is determined by the franchise. This provides a sense of continuity for customers. The experience of getting a chicken sandwich is the same, whether you’re at a Chick-fil-A in Connecticut or Utah.
Meanwhile, after the purchase of a true turnkey business, that business is yours. The previous owner doesn’t have any say over the way the business is run after you take over. Because you don’t have to pay franchise fees or commissions, there’s also higher profit margin for turnkey businesses.
The pros and cons of investing in a turnkey business
It’s important to understand the advantages and disadvantages of investing in a turnkey business. This knowledge can help you decide whether or not a turnkey business is the route that you want to take as a business owner looking for a profitable and successful business investment.
The advantages of purchasing an turnkey business
While it can be exciting to build a business from scratch, turnkey businesses also offer a great path for entrepreneurs. Some of those advantages to purchasing an established business include:
- Minimized risk
- Drastically reduced startup time
- Owning a business that has a recognizable brand and reliable revenue
- A pre-existing customer base
Reducing upfront risk
When you start a business from the ground up, you take on substantial risk. You invest money, time, and energy into the startup process but there’s no guarantee of success.
But when you buy a turnkey business, your success is much more predictable. Although it isn’t possible to mitigate every risk, taking over an established business allows you to skip over many of the pitfalls that startup businesses can experience.
A turnkey business has a pre-validated business model. You don’t have to spend time developing a product, establishing vendor relationships, or finding inventory. Instead, you can look through established business history to see profits, expense reports, growth trends, and other business details.
The advantage of reduced risk holds true for turnkey businesses across all industries. So whether you’re purchasing an Amazon business, content site, or turnkey property, you can confidently invest in a business with a proven track record.
“Instead of building a business from nothing, you can walk in on day one and concentrate on improving weak spots and making the company your own.”
Cutting your startup time
When you start a new business, there’s a long to-do list of tasks to work through before the business is established. If your dream is to open up a retail space, you have to choose and source your inventory, rent or purchase a storefront, and hire and train employees.
But when you buy a turnkey business, all of that upfront work is already done for you. In most cases, the only thing left to do is hire employees—and if you’re taking over an established pre-existing business, experienced and skilled staff could continue to work for the company when you take over as owner.
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Turnkey businesses most likely have reliable advertising strategies, proven business models, and established industry connections. It may have taken several years to build that kind of business infrastructure. But instead of building from nothing, you can walk in and concentrate on improving weak spots and making the company your own.
Owning a recognized and profitable business
Because there’s minimal to no startup time associated with turnkey businesses, you can quickly start seeing profit as a business owner. Let’s say that the business you purchase already generates $10,000 in profit monthly. When you turn the key to that new business and take over, that’s profit that you get to enjoy from the beginning.
Granted, there are expenses associated with running a business. For instance, if you financed the purchase of the business with a loan, you’ll have regular monthly payments. But your new business will have a cash flow right out of the gate.
Buying a turnkey business means you don’t have to stress about the tight finances and low profits that many entrepreneurs experience when they build a business from nothing.
Tapping into an existing customer base
Established business infrastructure is a fantastic advantage to turnkey business opportunities. But access to an established customer base can make the investment in a turnkey business well worth your money and time.
Building your brand and increasing your brand recognition is something that takes energy, finances, and time. But a pre-existing customer base gives you a competitive advantage.
Businesses usually pour resources into a variety of social media and marketing campaigns just to connect with potential customers. When you buy a turnkey business, the customer base that the previous owner or investor spent time building is yours, too.
That means you can focus on scaling your business at a speed that would be unthinkable if you were just starting to establish a customer base. Instead of trying to find and convert customers, you can jump right into experimenting with new products or services.
The challenges of turnkey businesses
No business venture is without its own challenges, and turnkey business opportunities are no different. When you’re considering investing in a turnkey business, it’s important to be aware of problems you’ll potentially face, including:
- Making a business your own
- Staffing shortages
Making a business your own
Although you can get up and running almost immediately with a turnkey business, it takes a while to establish the business as your own.
It could be that the previous owner’s vision and dreams for their business don’t align with what you have in mind as the new owner. You could have new products or services in mind. Or, you might want to shake up the branding and marketing to give things a fresh look. Perhaps you see the growth that could come from a staffing reorganization.
You could experience push back from established customers who are comfortable with where the brand is and don’t want to see sudden changes. Or, a reorg could cause conflict with staff who have been with the business since the beginning.
While it can be difficult to make a turnkey business your own, with patience and time, you can build a business that helps you reach your goals as an entrepreneur.
Navigating staffing challenges
When you purchase a turnkey business, everything that you need to run a business is included. Often this means that you’re taking over an established business model, you have all the permits you need. The business has a name, a location, equipment, and the inventory is on the shelves.
However, in most cases, the one thing left on your to-do list as the new owner is to hire staff. This means that you’ll have to work through the recruiting, interviewing, hiring, and training process with new employees. Establishing your team will take time and effort.
Meanwhile, you could be buying an established turnkey business. In this case, the employees who worked for the previous owner might be ready and willing to continue working for the company. Or, there could be staffing issues that you’ll need to sort through, like a high turnover rate or employees who aren’t as excited as you are about the new vision you have for the company.
Just like it takes time to make a company your own in terms of vision and branding, it takes time to build trust with any employee, new or old. Honing your listening and communicating skills can help you navigate this turnkey business challenge.
Three common turnkey business opportunities
There are turnkey business opportunities in almost any industry. Three examples of turnkey business opportunities include:
- Investing in turnkey rental properties
- Buying a successful Amazon FBA business
- Purchasing a service industry business
Turnkey rental properties
Turnkey rentals are properties that you can purchase and rent immediately after you close the deal. Often, these properties have undergone full repairs and renovations. Typically they are sold by companies who specialize in rehabbing properties into turnkey rentals opportunities.
These properties could be residential or commercial. In some instances, there could even be renters in the space. Everything you need to manage the property is included in the purchase, from property management services to daily maintenance teams. That means that when someone leaves their sink running through the night, you’re not the one who gets the call in the middle of the night.
Amazon FBA seller accounts with proven success
Buying an online business is another great option for turnkey business investment. Many Amazon sellers are exploring the idea of selling their FBA business. When you purchase their existing business, you can hit the ground running from day one.
Established online businesses already have the processes and systems in place for a successful business. The owner has already determined what products and services sell successfully and where to source their inventory. They’ve also already created business relationships with suppliers and are knowledgeable when it comes to Amazon requirements.
If the previous owner has proven and documented business processes, there is opportunity for a seamless transition. Depending on the daily involvement required from the business owner, this type of turnkey business opportunity could open the door to passive income, which is the entrepreneurial dream.
“Established online businesses already have the processes and systems in place for a successful business.”
Purchasing a service industry business
Many service based businesses make great turnkey business opportunities. Some examples of this type of turnkey business include exterior siding and painting businesses or landscaping companies.
When you start a service industry business from the ground up, there is often quite a bit of equipment you need to research and purchase. But when you buy a turnkey property, all of that equipment is included in your investment.
For instance, if you purchase a turnkey lawn care company, you don’t have to worry about doing research to determine which equipment is the best for the job. Instead, the necessary equipment is already in the garage, ready to go.
Some service-based businesses also offer great opportunities for seasonal income supplementation. You can increase your cash flow in a busy season and focus on other opportunities during the offseason. After all, you only need to actively run a snow removal business for a few months out of the year—unless you live in Alaska, of course.
Where to find turnkey businesses for sale
When you’re ready to invest in a turnkey business, where do you go to find one for sale? And how do you go about contacting the seller and getting into the negotiation process?
While there are many different routes you can take to locating a turnkey business for sale, the opportunities generally fall into one of two categories:
- Purchasing the business directly from the buyer
- Working alongside a business Advisor
Buying a turnkey business directly from the buyer
One way to purchase a turnkey business is to go through the search, valuation, and purchase process on your own. There are a variety of online marketplaces where you can browse business listings. Usually, each listing includes a summary of the business as well as the asking price.
Online marketplaces allow you to browse multiple turnkey business opportunities quickly. With a quick search, you can look through established ecommerce businesses, rental properties, and service based businesses for sale.
These searches also give you a good idea of what is available in the current market. While these searches can be a great place to start, it can be challenging to evaluate the credibility and expertise of the buyer. Unless the seller is from your own personal network, it can be hard to know if they can be trusted. And if you’ve never been through the process of buying a business, it can be hard to navigate the overwhelming amount of details involved when purchasing a turnkey business.
If balancing all of those moving pieces seems intimidating, or you’re worried that you’ll miss a step along the way, a business Advisor can be a great guide through every stage of the purchasing process.
Working with a business Advisor to purchase a turnkey business
There are many reasons why entrepreneurs looking to buy a turnkey business hire an experienced business broker (or Advisor). The first benefit is that business Advisors know what businesses are for sale, and can help you look through businesses that match your search criteria.
Once you’ve found a business you’re interested in, your broker can help you contact the seller, learn more about the business, and enter into a negotiation process that involves terms and pricing that’s favorable to you as the buyer.
While turnkey businesses have everything you need to get going, it’s important to know that the business is actually what the seller says it is. You’ll want to look through their sales history, the costs associated with running the business, and other metrics. When you work with an Advisor, you can be confident that you’re navigating all of those numbers well.
Business brokers also help prepare the financial documentation for the purchase and make sure the deal closes smoothly.
“While turnkey businesses have everything you need to get going, it’s important to know that the business is actually what the seller says it is.”
Turnkey businesses are full of new opportunities. After the deal is done, there shouldn’t be much stress involved with the transition into your new owner position and the day-to-day business operations. But the purchase of a turnkey business takes diligence, persistence, and attention to detail.
Hiring a business broker is a great way to ensure that the entire process, from locating a business for sale to signing on the dotted line, is as stress-free as possible.
Drastically reduced start times and a pre-existing customer base are all advantages that make purchasing a turnkey business a great business move for entrepreneurs. And while there’s never a full guarantee of success with any type of business purchase, turnkey business opportunities offer a significantly low risk option.
If you’re interested in purchasing a turnkey business, the next step is to determine your budget, put together your search criteria, and define your business strategy. Once you know the type of turnkey business you’re interested in and your initial offer price, you are ready to start browsing business listings.
Here at Quiet Light, we love helping entrepreneurs meet their goals and purchase successful and profitable businesses that are ready to go from day one. If you see a business for sale on our listing pages, you can always request a no-obligation summary.
Buy a Profitable Online Business
Outsmart the startup game and check out our listings. You can request a summary on any business without any further obligation.