To say the phrase “I’m looking for something turn-key” is common, would be an understatement. Over 350,000 people type some form of the phrase “turn-key business opportunity” into Google’s search bar each month. This means that close to 1% of our U.S. population is looking for a revenue model that is “turn-key”.
The premise of a “turn-key” business model is that the business they buy into will come with a step-by-step formula for success. A person looking for something turn-key is usually in the hunt for something they can simply add in a little money or elbow grease.
Many people today acknowledge the need to bring in extra income but know they have no time or money to make mistakes on their first business venture. The fear of loss, being what it is, forces many to search out businesses that are truly turn-key. They're hoping these turn-key businesses will allow them to move into another revenue stream without a steep learning curve. And this concept has allowed franchising, the number one business model in America, to flourish.
Ray Kroc of McDonald’s showed the world that a turn-key operation is a “working model”. It's a model that is tried and true. It's a model that can be followed to create a fairly accurate predetermined financial return. Most importantly, it can be done by someone with no industry experience.
There are 4 main elements of a turn-key business:
1. The model can stand up to any forms of due diligence; there's a working, successful model in place.
2. A predetermined return can be forecasted.
3. No industry experience is required. Anybody can do it if they meet the financial qualifications.
4. There is some form of “out” clause or exit strategy in place.
The Pros and Cons:
The Pros: The Pros of a turn-key operation are clearly the four main components: The model has been fine-tuned and is up and running. It is so fine-tuned that based on either physical location or current website traffic - a predetermined financial return can be extrapolated. No experience is necessary. There is some form of “out” clause where the business owner can get all or most of their money back, like a franchises ability to allow a franchise owner to sell their franchise, often for a substantial profit.
The Cons: The only Con I can see is that most good turn-key models are offline (not on the internet). It is also a general rule with a franchise that the less money you have to put in, the higher the risk of failure. The more money you put in, the bigger the budget earmarked for the support system, training module and marketing. Franchises are not perfect. They are still susceptible to some of the landmines of business ownership. Even McDonalds, the most expensive franchise, once in a while, has to close a store.
Best advice I can give:
If you are in a situation where you need an extra revenue stream coming into your household or business, then I’d look hard at a good traditional franchise. Good franchises can be had for as low as $10,000 or high as $1,000,000. These franchises come with true gross and net profit models that provide immediate and sustainable cash flow. Because they are a franchise, they come with an abundance of training and support.
If you don’t have the capital to step into a traditional franchise, there may be another viable optional. If you’ve ever had a great idea for a product launch, a new service offering or a stand-alone business, but didn’t know how to get started, you may want to reach out to a business consultant or attend a business growth conference like CEO Space. Sometimes the only thing a good idea is lacking is a proper sequence.
Unfortunately, too many people graduate from this life with great ideas inside them because they simply didn’t know where to start. Sometimes an initial consultation with a business consultant can lay out a quick step by step formula to launch a product or get your potential business off the ground.