Forbes | Aug 26, 2024
Intense collaboration and customization are often a hallmark behind successful business partnerships. But getting collaboration right can be surprisingly challenging — and in some cases, even the most well-intentioned collaborations can fail.
But for many service providers and suppliers, significant investment in customization can be out of reach. One approach that can still provide great value is turnkey solutions. Here’s how turnkey solutions can deliver meaningful value, without requiring as in-depth of a partnership.
What Is A Turnkey Service?
A turnkey service is a comprehensive solution where the provider takes on the entire responsibility for designing, planning and implementing a project from start to finish. Turnkey services can apply to almost any type of service relationship and are especially relevant in outsourced services and real estate investing.
For example, in residential real estate, a turnkey provider might handle everything from purchasing and renovating a property to finding tenants and managing the property. The investor simply acquires the property and starts receiving rental income, without needing to be involved in day-to-day operations.
In commercial real estate, a turnkey solution could include identifying a suitable commercial property, renovating it to meet specific business needs and even securing tenants. The investor receives a fully operational investment property complete with all the necessary preparations, allowing them to focus on their investment strategy rather than the complexities of property management.
Additional Benefits Of Turnkey Services
For straightforward partnerships that don’t require intensive customization, turnkey solutions can be a highly effective solution. As Investopedia notes, “Turnkey solutions are created to be implemented into a current business process without disruption. Turnkey solutions can save a company time and money when implemented with success.”
These solutions are an affordable way to create an end-to-end product or service that can benefit a variety of users. This allows the solution itself to be implemented quickly and easily to begin achieving desired outcomes, as long as it aligns with the individual’s or company’s strategic goals. Because the solution takes on more of a “one size fits all” approach to the partnership or product, costs tend to be much lower for both sides.
Turnkey solutions also tend to be more predictable in terms of their ability to achieve quality results. The solution has been tried and tested, and is managed entirely in-house to ensure that it meets a set level of quality time and time again. Partners can have confidence that solutions will achieve promised outcomes.
How Turnkey Service Creates Valuable Partnerships
While turnkey products may be more transactional in nature, turnkey services can actually prove to be collaborative partnerships in their own right.
Let’s return to the example of real estate.
As Kent Clothier Sr., owner of REI Nation, explained to me during a recent conversation, “We maintain ongoing relationships with each of our clients, who work with us to continue to build their real estate rental portfolio. We provide a turnkey service in the sense that we do all the heavy lifting to help make this a more passive investment opportunity, but we still maintain ongoing communications so everyone is fully engaged and to ensure that the portfolio’s results are in line with their investment goals for generating passive income. We view this as working as a team, since our clients choose and close on their preferred properties, while we handle acquisition, property management and more.”
As this example illustrates, turnkey services still offer a valuable partnership, in which both sides have a set of responsibilities that they must fulfill to deliver maximum value. In this case, an investor’s choice of property is crucial for achieving their investing goals, even with a partner available to manage the property afterward. While the investor’s role may not be as in-depth as it would be in other types of strategic partnerships, they still have a part to play in ensuring a beneficial outcome.
As with more traditional partnerships, consistent communication is essential to ensure that both parties remain on the same page and that the turnkey solution continues to deliver the desired value. Strong communication is also necessary before entering into this partnership to ensure that the solution addresses the needs of the client, since customization and adaptation is rather limited.
Turning Turnkey Solutions Into Lasting Partnerships
With a true turnkey service, partners are able to take on tasks that others are unable (or unwilling) to manage themselves, or deliver finished products that can be immediately implemented by their partner. The fast turnaround and reliable service and communications offered through these partnerships can be well worth it.
In addition, depending on the nature of the service and the partners themselves, what begins as a turnkey service may evolve into a more customized and collaborative partnership, driving additional value for both sides. By starting with a solid foundation of turnkey solutions, both sides can enjoy cost-effective outcomes that drive progress toward larger goals.
Forbes | Aug 26, 2024
