Business in a box, no strings attached; buying a turnkey company can be an inexpensive way to go out on your own

Business in a box, no strings attached; buying a turnkey company can be an inexpensive way to go out on your own

Lynie Arden

How would you like to buy a business-in-a-box? Unpack it, add a phone line, and you’re in business. If so, consider a turnkey business system, which provides you with everything you need to get started–from a computer to a business plan.

Most franchises are turnkey businesses, but independent turnkey business systems are relatively new. They are generally less expensive than franchises, because they don’t offer ongoing support, use of the company name, or national advertising. And, while franchises often grant territorial exclusivity, independent business opportunities generally offer no such protection against local competition. But–in addition to lower up-front costs–they don’t charge ongoing royalties or advertising fees.

Some outfits selling turnkey business systems are really selling computers, along with some generic business information. They call the combination a turnkey business system, but the basic idea is to sell a computer system at a premium price. Many such companies won’t even sell you a business unless you buy a computer. But the two independent business systems described below, ideal for home-based operation, offer business plans and assistance. If you already own a computer, you don’t need to buy one.

If starting a business from scratch intimidates you, buying a turnkey business system is a relatively inexpensive way to get started. You won’t get as much hand-holding as you would with a franchise, but you’ll face fewer regulations and costs, too. The way you set up and run your business is completely up to you.

PASSPORT TO PROFIT

Two years ago, Computerized Travel Services Network (CTSN), a 17-year-old family business, became the first company to offer a home-based business opportunity in the travel industry. For $7,995, you can buy a business package including training, marketing, an IBM-compatible computer (Packard Bell Force 4), software, and access to industry discounts through the company’s license. Buyers who already own a computer can subtract $1,000.

Since most travel bookings are sold over the phone, there’s no real reason for a storefront, except to attract traffic. Using the CTSN software, a home-based operator can access all airlines, cruise lines, hotels, tour companies, and car-rental companies for reservations and send the ticket request and credit-card information to CTSN. CTSN prints out the tickets and sends them overnight to the customer. The independent business owner gets a 10 percent commission on all tickets booked.

“I get my commissions, and I’m very happy,” says Dale Podkowa, of Chandler, Arizona, one of 110 operators on the CTSN system. Podkowa has attracted 50 clients in about six months and now makes about $300 a month. “The people at the company bend over backward to help me, making me feel like part of their family.”

Podkowa works full-time for the local phone company, so Dale’s Travel is a sideline business for now. He generates contacts through his job, and most of his customers come through referrals. But when he decides to take the business full-time, he will use CTSN’s aggressive marketing system, which is designed to attract small-business customers who spend between $20,000 and $50,000 on travel a year.

CLEAN SWEEP

“You would think,” says Joyce Pierson, of Montgomery, Alabama, “that running a maid service would be easy. It isn’t. I seriously considered starting one myself, but I’m glad I didn’t.”

Instead Pierson bought an independent maid-service system from The Professionals, Inc., just over a year ago. There are many franchised maid services in this $9.2-billion industry, but The Professionals offers a complete system with no royalty payments and no territorial restrictions.

The Professionals system leaves nothing to chance. Included in the base fee ($5,990) are training manuals, master copies of every form needed to run an efficient maid service, a marketing format package, a customized accounting system, a desk organizer, five video and eight audio training cassettes, and one full year of consultation. Customized software and a computer system are separate options. the price is much lower than that of any franchised maid service.

The add-on business plans–an option unique to the industry–are particularly impressive. For $3,000, you can buy six more business plans designed to bring additional profits. Pierson is especially excited about the Post-Partum Services (for new mothers).

The Professionals maid service has 730 clients. None have failed in the company’s 13-year history. Only five have not grossed $80,000 in the first year and $250,000 in the second, according to the company. The average net profit is 41 percent of revenues. “A tried-and-true business system is the only way to go,” says Pierson, who is likely to gross $250,000 in her second business year. “It took me less than a month to start making money.”

Needless to say, a business that does well for one person won’t necessarily do well for another. Market conditions, and your own marketing and business skills, should be factored into a business plan before you forge ahead.

LYNIE ARDEN, who wrote “Franchises You Can Run from Home,” the cover story in July 1990, is author of Franchises You Can Run from Home (John Wiley & Sons).

COPYRIGHT 1991 Freedom Technology Media Group

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