Conclusion: A Final Invitation to the Turnkey Sector

The turnkey business sector is one that is full of possibility and opportunity for the entrepreneur who is willing to put in the time and effort to make his or her new business a success.

A turnkey business is one in which the prospective owner simply has to “turn the key” to start a successful venture. This book has outlined a basic overview of what the turnkey business sector encompasses, how to go about researching a possible turnkey business venture, how to avoid the common hazards faced by first-time business buyers, and finally, how to make a wise purchase of a turnkey business.

The turnkey industry is one of the most rewarding opportunities for business-minded individuals. With enough research, time, and energy, anyone can be a successful turnkey business entrepreneur.

Are you ready to turn the key to success?

Read the Manual

Most franchises have a manual that is distributed by the parent company. Reading this book from cover to cover can be more eye-opening than any other research. By looking at what the company has codified and put down on paper, corporate organization, goals, expectations, and policies toward employees can be ascertained.

Manuals are sometimes available for loan upon request from the parent company. Barring this, it may be easiest to borrow a manual from a current franchise owner.

Building on the Knowledge of Former Owners

Current franchise owners can be a wonderful resource for invaluable information and experienced opinions. Because a prospective franchise owner will also be a part of a main business structure and therefore required to uphold the policies and regulations of the parent company, talking to current franchise owners can shed a lot of light onto the inner workings of the company. Asking questions about what the previous owner found helpful, frustrating, or surprising might save a lot of surprise and anxiety in years to come.

Many franchise owners have found out too late that corporate policies are too restrictive or not suited to their individual tastes and needs. Talking to current owners and workers will give a clearer picture of how the parent corporation operates and what it expects of franchise owners. Building on the tried and tested knowledge of former owners will provide the background needed to ensure that a particular company is well-matched to the needs of the potential buyer.

Location, Location, Location

For those who are purchasing a franchise that has already been established, the problem of selecting an appropriate location is less obvious than for those building from the ground up. However, it is still incredibly important to consider where a future business enterprise will be located.

When considering location, a business owner must think about traffic flow, parking, neighboring buildings, and from where customers will come. Companies that are tucked away behind office buildings may have regular customers from those same office buildings, but they are also less likely to get regular foot traffic than companies with visible and convenient locations. Certain locations may have what seems like a fantastic and visible location, but with little or no parking available, no business will be able to flourish. One additional point to consider is how the area will change over the course of the years. What may be an ideal location this year may be next to a deserted shopping mall the next.

Buildings, highways and local roads change constantly, so checking in with local government planning offices is always recommended when looking at a prospective company location. When buying a turnkey business, if the location if the company is poor, it may be a bad idea to go ahead with the purchase.

Choosing a Well-Matched Business

Many people have the desire to own and run their own business because they crave independence and self-determination. What is more, one of the most common reasons to invest in an owner-managed business is the increased profit that comes with being self-employed.

While hefty profit may be a strong temptation for the prospective business owner, an interest in the business itself is one of the most important prerequisites for a successful business. Even with large profits, a small business owner without an interest in the business itself is a problematic business model.

For small business owners who are not interested in the business in which they are engaged, their lack of interest in the industry itself will eventually result in unhappiness, decreased customer service, and poor business performance. In small businesses, there is such a close relationship between the company and the business owner that an interest in the business segment is a necessity.

In purchasing a turnkey business, it is not only important to find a financially stable, healthy company. It is also vital that a perspective owner is interested in the work that the company does, as well. The balance between profit and personal interest is vital in creating an effective small enterprise.

Selecting a Business: Avoiding Common Pitfalls, Hazards, and Risks

Up until this point, this book has dealt primarily with how to select a business, how to ensure that it is the right one for you, and how to correctly go about doing due diligence. However, finding the right business is more than knowing what to do. It is also knowing what not to do.

In this chapter, we will talk about how to avoid certain hazards when purchasing a turnkey business.

Liability Status

Liabilities can be unpaid loans, unsafe working conditions, or even significant benefits packages promised to former employees. When purchasing a new business, knowing to whom the company owes money, and knowing whether or not a new owner will also take over the responsibility for these debts is one of the most basic and most often overlooked points in buying a business.

Items like these are often detailed in the prospective owner’s letter of intent and in the contracts that are signed at the closing deal. Know what liabilities will stay with the current owner and what liabilities will transfer to the new owner.

The area of liability status can be rather complicated. Seeking professional advice on how to determine liability status and how to minimize future liabilities effectively may save quite a bit of money in the long run.

The next section will concentrate on avoiding the most common hazards of selecting a business.