- THE MAGAZINE
TURNKEY (DEFINITION) – Fully equipped and ready to go into operation.
Quite simply, turnkey means that if someone bought your business, they would be able to open the door on Day One and the business would run without the new owner’s input. In other words, the dream business. You own the company, make the profits and don’t have to work if you choose not to.
The business could still be considered turnkey if your input was minimal and consisted of you examining the books, holding management meetings, etc. Naturally, if you prefer to work in some capacity, that would be fine and the business still considered turnkey. A turnkey business is basically operated and run profitably and efficiently on all levels without the need of the owner’s involvement; major decisions are still generally the main role of the owner.
Take the test and see how close you are to achieving this milestone. Hopefully, this will show you what areas you need to work on to have your own turnkey business.
Answer each question honestly. Some questions are more important than others, so they are worth more points. A score of one means that you are terrible at this situation and a score of the highest number means that you have mastered the question asked.
- Do your employees do what you tell them to do? There is a reason that this question is the first question. First of all, you must have employees to have a turnkey business. If you sell your business and you are the only employee, the purchaser is not buying a business, they are buying a job. Secondly, good employees are the key to a turnkey business. You must have employees dedicated to their work who are middle and high performers. Low performers will be a cancer and require constant supervision; they must be eliminated. A written policy and procedure manual that explains the roles of each employee is essential. There are many other ways to get your employees as high achievers, such as regular employee evaluations, incentive type pay, great work atmosphere, etc. However you do it, you must have your employees as a source of delight in your company, not dread. (score yourself from 1 to 20) ___________
- Is your marketing consistent and effective? No matter how profitable your company is now, it must be looking to the future because things change. A good marketing program makes sure that the company’s No. 1 source of clients – current clients – is well marketed to. Additionally, other markets which exist have a well-thought-out marketing strategy that exists on paper, not in someone’s head. There is a Japanese company that plans 100 years into the future. Now that may be extreme, but does your company have marketing strategies six months into the future, let alone a year or two years or five years? To achieve an excellent score on this question, your company would have its marketing strategy on paper, planned out for at least one year with dates for implementation, cost analysis for each strategy and the personnel lined up to do the marketing. (score yourself from 1 to 20) ____________
- Is the office is a well-oiled machine? Do you have the personnel to answer the phone effectively and keep all the books up to date and current? Are all sources of business tracked so that you know what marketing is working and what is not? Are budgets made and adhered to, and can an accurate financial picture of the business be looked at on a daily or weekly basis? Some turnkey businesses can still have the owner involved in bill paying and bookkeeping because the owner wants a tight control and, of course, that’s OK if the owner so desires. (score yourself from 1 to 20)_____________
- Can you can take long vacations and return to little or no work? This is not really something that you can work at, it is more of a result of having all the other systems in place. This is a good way of judging just how well your business is running without you. (score yourself from 1 to 10) ______________
- Does someone else besides you run the day-to-day operations of the business? Call that person an operations manager, a team leader, a supervisor, whatever; that person runs the show. This position is essential in achieving your turnkey operation. A multi-millionaire business mentor of mine once told me the key to business is to have good people run your business and pay them well. This position’s importance cannot be overstated. A good operations manager can be a huge problem; they must be great. He or she is a large part of making sure that the employees are stepping up to the plate and doing their work well, which has already been mentioned as the number one issue when achieving a turnkey business. Quite simply, you can score yourself on this question by answering the question: do you have a great operations manager? (score yourself from1 to 30) ______________
- How’s your attitude? Do you believe that you can achieve a turnkey business? Do you know yourself well enough to know that deep down inside, you are capable of doing the hard work and making the sacrifices needed to pull this off? Are your people skills good enough that you can assemble the team necessary? If you make some mistakes and fall, are you willing to pick yourself up and get going again, no matter how difficult that may be? Do you like what you are doing and enjoy the idea of putting together the elements needed to achieve this goal? Are you excited about this endeavor, yet realistic about the chances of bringing this about? A positive attitude is absolutely essential in creating your turnkey business. (score yourself from 1 to 80) ________________
- How profitable is your business? This question goes without needing to be said as a highly profitable business is essential to being turnkey. Many businesses are not profitable due to their pricing being too low. A high profit margin cures lots of ills and enables a business to incorporate features such as higher wages for employees, money available for training, better equipment, dollars for marketing, etc. Not having a good profit margin is like being in a straightjacket. (score yourself from 1 to 40) _______________
- Do you have a Policy/ Procedure/ Operations Manual? This is the capstone of your business being systematized. Every job has a written description of what the job entails. The operations manager, office manager, technicians, marketing manager, assistants and any other position have a written manual that they can refer to in order to see what they are supposed to do every day. Additionally, all company policies and procedures are clearly spelled out. If any employee leaves their position, the new employee can refer to a manual to see what they are supposed to do in their job. (score yourself from 1 to 20) _______________
240 – 260: A+ Congratulations – you are living the American dream. This probably means that you are already off and running after your next dream because you are a high achiever. Enjoy the journey, you deserve it.
210 – 239: A Wow, great score, you are just a step away. Work on the one or two issues where you fell short and soon you will be at the pinnacle of business success.
170 – 209:B Don’t beat yourself up, because we all know that a “B” is not a bad score. Make a written plan as to how you are going to work on your weak areas and then go to work. You may need to buy some books or join some groups to learn more about how you can improve your business.
110 – 169: C Now that you are aware of your shortcomings…rejoice! Get some help, make a plan, change you attitude and make a decision that you are going to do this no matter what.
0 – 109: D It’s ok, really, because this is where the majority of businesses are. If it was easy, everyone would be doing it. Just being an entrepreneur puts you ahead of 97% of the rest of the crowd, so don’t feel so bad. Take a deep breath and make a decision: Are you going to be a worker drone the rest of your life, or are you going to be part of the elite group that lives outside their comfort zone in the vision zone, disciplines themselves, works hard and efficient and implements the great ideas that they receive from others? It’s decision time; what will it be?
Just by searching and examining the question of having a turnkey business shows that you are way ahead of the game already. If it is in your heart to achieve this most admirable goal, why not go for it. In the U.S. we have opportunities galore and an infrastructure that enables us to achieve our wildest dreams. Get some help, make a plan, keep a positive attitude, discipline yourself and start to enjoy the wonderful fruits of your labor.