A turnkey is a type of business or operation that is ready to use at the time of purchase or delivery. This type of venture is sold to a businessperson completely ready to operate. The purchaser doesn't have to get it ready to operate it or get customers, as everything is usually ready to go. Often franchise businesses are sold as turnkeys, but there are other types of businesses that are sold, or even leased, in this manner too.
There may be many types of businesses that include a lot of what a person needs to get started, but they are not all turnkey businesses. Essentially, a business is only truly turnkey if it is ready to operate without requiring the buyer to perform additional work. If a buyer has to do market research to find out whether there's an audience for his service before he opens the doors of his business, it won't fit this definition. Likewise, if a person has to spend his own time and money figuring out the best way to run his new business or finding a location, from which to run it, it's usually not a ready-to-operate business.
One example of a turnkey is a franchise business that is complete with everything a person needs to get started. For example, a turnkey franchise may include instructions for running the business, equipment, product inventory, marketing materials, and even a building that is set up for the franchise. Often, these types of franchise businesses also have an established reputation that helps the new business owner to have a better chance of succeeding. It's important to note, however, that some franchises are not truly ready to operate. Many require new franchisees to find their own locations, for example.
Another example of a turnkey business is a website that is ready to operate. For example, a person may be interested in selling gift baskets online. Instead, of starting his business from the ground up, he may purchase a ready-to-operate gift basket business. Once the website is transferred to him, he should be able to immediately begin selling gift baskets online. Even such things as his shipping arrangements and credit card processing services should be set up and in place at the time of purchase.
Often, people equate the word turnkey with easy, thinking a turnkey business will be easier to operate and profit from than a regular venture would be. This is, however, not always the case. This type of business is usually easier to get started, but still takes a good deal of effort to run. Additionally, there is no guarantee of profitability. Ultimately, this type of business is a tool for an entrepreneur, but its success usually depends on the efforts of its owner.