Q:

What is a "turnkey contract?"

A:

Quick Answer

A turnkey contract is a business agreement in which a company is given the responsibility of planning and building a product that can generate cash flow for the client upon completion. Cambridge Dictionaries Online uses the example of a stadium being built, while Investopedia describes Subway sandwiches as an example of a turnkey business that requires only capital and labor to begin.

 Know More

Full Answer

RICS explains that the advantages of turnkey contracts include the possibility of more efficient work produced by a developer and increased time for the client to seek financing and investors. Turnkey contracts are also helpful for inexperienced clients who lack the knowledge to oversee progress. However, RICS also points out that turnkey contracts do not allow clients to have input during design and construction, which sometimes results in a less satisfactory end product. "Turnkey" is also used to describe buildings or the sale of goods and services.

In real estate, Wikipedia explains that turnkey refers to a location ready for occupation. For example, a turnkey hospital is a complete medical center that comes with a full range of pre-installed medical equipment. The term is synonymous with "off the shelf," and as a consequence, products are less customizable, such as in the sale and purchase of a turnkey car that includes the drivetrain.

Learn more about Business Resources

Related Questions

  • Q:

    What is needed to start a security company?

    A:

    Setting up a security company requires a bit of research and planning to set the groundwork for a successful business, including setting a budget and assessing market conditions. Turning an idea for a business plan into action requires a bit of work, but is essential for establishing a competitive organization. Business success is accomplished through a series of steps, which are carried out during a period of time.

    Full Answer >
    Filed Under:
  • Q:

    What is fixed capital?

    A:

    The term fixed capital refers to assets a business must acquire in order to operate the company, but which are not purchased over and over to manufacture a product or provide a service, according to Investopedia. Examples of fixed capital include documents, such as legal contracts, and the premises on which a business is run, such as an office building or storefront.

    Full Answer >
    Filed Under:
  • Q:

    What is a business plan?

    A:

    A business plan is a document that outlines a product, service or business concept and helps convince people of the value of the company providing them. A business plan is an essential tool used to communicate the vision of the proposed business.

    Full Answer >
    Filed Under:
  • Q:

    How can one set up a call center?

    A:

    A call center can be set up by outsourcing the business to another call center or by purchasing call center equipment and hiring and training employees to sell or market the company's product. Many small and corporate businesses prefer to outsource because it is expensive to buy call center equipment, it is expensive and time consuming to hire and train employees, managing a call center requires skills that many business owners do not have and many business owners prefer to focus on running their business rather than managing a call center.

    Full Answer >
    Filed Under:

Explore