Defining Turnkey Packages
A turnkey package is a ready-to-start business opportunity offered by an existing business to an entrepreneur. The prospective owner is given a package of materials including signage, marketing documents, job applications, and product samples to start his business. The purchase price of a turnkey package does not include the full inventory or the costs of renting out retail space if this is a traditional storefront business.
The turnkey operator is dependent on the licensing business in several ways after the turnkey package is initiated. An owner has to send back a share of any profits made each month to the licensing body, similar to a franchise fee. The owner must stick to the instructions laid out in turnkey packages as closely as possible. The licensing business relies on turnkey operators to continue their branding efforts including proper pricing, labeling, and marketing at the local level.
Turnkey packages are prevalent in home computing, car care, and home wares. Tech-savvy entrepreneurs can start computer repair and software design businesses from home with the help of turnkey packages. An owner can start a car care business with little more than wax, soap, and a garage. Avon© (http://www.avoncompany.com/about/career.html) and PartyLite© (http://www.partylite.com/en-us/Default.aspx) are quintessential turnkey packages for homeowners who like beauty products, candles, and other accessories.
Another area where turnkey packages are particularly popular is fast food restaurants. Major fast food chains like Quiznos©, Papa John’s©, and Hardee’s© offer franchises to area business owners to increase their market saturation. These businesses require higher initial investments and a review of owner qualifications because of the higher profile of the licensing businesses. While the barriers to entry may be higher for a fast food turnkey operation, the constant demand for burgers, subs, and pizza throughout the United States means high profit potential.
Benefits Of A Turnkey Package
The primary benefit of a turnkey package is the low barrier to entry for anxious entrepreneurs. Once a prospective owner finds an industry rich with turnkey packages, the difference between these packages is the initial cost plus licensing fees. While the upfront costs may range from $500 to upwards of $50,000, these expenses pale in comparison to the considerable costs of starting a business from scratch. The convenience of having a product line, a business plan, and a recognizable marketing scheme from the start is a relief to harried entrepreneurs.
Another benefit of a turnkey package is the guidance provided by the licensing business. Other investors have used the business plan laid out by the supplier in the past, which means that errors and omissions have been cleared up in previous editions. Suppliers provide posters, sample advertisements, and cold-calling scripts that take the guesswork out of the most basic tasks. An entrepreneur who pursues a turnkey package may give up some of his independence, but he also saves time and money on outside consultants.
One of the greatest upfront costs for new businesses is product research and development. The cost of creating the first computer, video game console, or couch is exponentially higher than the cost for producing the thousandth. A turnkey package features samples of company products along with a full catalog of goods that can be ordered at discounted prices. Instead of spending time perfecting the production process, a turnkey operator can simply order as much inventory as needed to meet consumer demand. While the ingenuity involved in traditional business startups is absent with turnkey packages, owners who like sales rather than R&D will find themselves at home with these packages.
Target Demographics For Turnkey Packages
Businesses that offer turnkey packages focus their attention on first-time entrepreneurs and owners. These packages appeal to business novices because they are inexpensive, easy to initiate, and contain all the information needed to get started. Young entrepreneurs have the energy, tech-savvy, and resilience to convert turnkey packages into working businesses. While turnkey packages do not guarantee success, first-time owners can use the lessons learned in turnkey opportunities in future investments and businesses.
Another group targeted for turnkey opportunities is the growing retiree population in the United States. As the baby boom generation of the 1950s and 1960s begins to reach retirement age, supplemental income will be needed to augment pensions and 401ks. Retirees have the time and the life experiences needed to shepherd turnkey opportunities through their early days. A retiree can continue to earn some side income, serve his community, and stay busy in his golden years by pursuing a turnkey opportunity.
A final group that does well in the world of turnkey opportunities is experienced entrepreneurs looking to branch out. Veteran business owners have seen their own ventures succeed and fail in the past, giving them the proper perspective when starting new ventures. These entrepreneurs have the start-up capital to open a new store or start a new product, but choose turnkey packages for their low overhead costs. A successful business owner can afford to purchase a full supply of licensed products and spend time selling these products because they have a secure profit stream.
Online Resources For Turnkey Packages
FranchiseDirect© (http://www.franchisedirect.com/businessopportunities/8) is an online resource for turnkey packages in every industry imaginable. The list of “business opportunities” includes DVD kiosks, hardware sales, Internet consulting services, and food vending machines. FranchiseDirect© helps entrepreneurs by breaking down the initial investments into categories like “Less than $25,000” and “$200,000 to $250,000” for easy access. You can also check out turnkey packages on FranchiseDirect© by industry if you want to narrow your options further.
DotComBuilder© (http://dotcombuilder.com/p/index.php) has adopted the turnkey idea for the ecommerce world with its pre-packaged Internet solutions. Each DotComBuilder© turnkey package contains a website template and simple script editors like WordPress, along with features needed to facilitate ecommerce from the first click. The website claims that DotComBuilder© is the number one provider of turnkey websites with more than 500 templates covering 50 business endeavors. Whether you are developing an auction website or a news magazine, you can find a turnkey package through DotComBuilder©.
|
Business: 
More
