# Turnkey Solution: Definition, Example, Pros, and Cons

![An empty warehouse space is ready for a new occupant to use.](https://www.investopedia.com/thmb/xabANxzi3m1CnEVH_av0kunpoXk=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/TurnkeySolutionDefinitionExampleProsConsGettyImages-1395642709-f204a58090f942da8391e37936d1af9f.jpg)

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> **Definition**
>
> A turnkey solution is a product or service that requires a customer to make no modifications; it is ready to use as is.

## What Is a Turnkey Solution?

A turnkey solution is a prebuilt system that can be easily implemented into a current business process. It is immediately ready to use upon implementation.  

### Key Takeaways

*   Turnkey is a word that can be used to describe a solution, a business, or a property.
*   A turnkey solution is the opposite of a custom-built solution. 
*   Turnkey solutions are designed to be implemented into a current business process easily, without disruption. 

## How Turnkey Solutions Work

With a turnkey solution, a corporate buyer just has to turn a proverbial key to use the product or service.

The system is designed to fulfill a certain process, such as manufacturing (in part or in whole), billing, website design, training, or content management.

A turnkey solution system is different from a custom-built system, which is designed specifically for the customer. The turnkey solution, in contrast, is typically the more affordable and simpler option.

## Other Types of Turnkey Terms

Traditionally, turnkey, as a term, is commonly applied to construction projects, such as warehouses, other purpose-built buildings, and houses. With a turnkey structure, the building contractor finishes a product that the buyer can utilize immediately.

A turnkey property is usually a newly renovated and updated apartment, condo, townhouse, or house that is [move-in ready for buyers or renters](https://www.investopedia.com/articles/personal-finance/071315/how-investing-turnkey-property-works.asp). Real estate companies, property sellers and buyers, and real estate investors often describe new buildings or homes as turnkey ready.

A turnkey business is a business that can be purchased without having to make any changes to the business model or products sold. For example, a franchise like Taco Bell is a type of turnkey business.

> **Important**
>
> Turnkey solutions are popular for businesses that desire speed to market.

## Pros and Cons of Turnkey Solutions

A turnkey solution may be the most affordable way to make something [end-to-end](https://www.investopedia.com/terms/e/end-to-end.asp) that is beneficial for multiple users. That's the main advantage for customers: price. A turnkey solution, depending on its complexity, may also be easier to use than a custom-built system.

However, turnkey solutions may not take into account the individual needs of a company. A turnkey solution for content management software offered by a third-party company may be cheaper to purchase, but it may not cover all the needs of the purchaser.

Another possible drawback of this method, as opposed to designing a process in-house or purchasing a custom-built system, is that specifications that are important to a particular company may not be sufficiently integrated into the solution. In-house and custom-built solutions can take the full complexity of a specific company's needs into consideration, while a turnkey solution cannot.

## Example of a Turnkey Solution

A company looking to implement an online billing feature on its website can use third-party providers to process each [transaction](https://www.investopedia.com/terms/t/transaction.asp) and handle all the technical issues surrounding this process. The use of a turnkey solution, in this case, allows the company to avoid the headaches of programming the tool in-house and the approvals associated with developing a billing system from scratch.

## What Is Considered a Turnkey Property?

A turnkey property has been fully renovated and requires no work to be done. The tenants or buyers can simply turn the key to the front door and move in without needing to make any modifications.

Turnkey properties may be attractive to investors or buyers who don't want the hassle of renovating a property.

## Are Turnkey Properties Worth It?

As an [investor](https://www.investopedia.com/terms/i/investor.asp), a [turnkey property](https://www.investopedia.com/terms/t/turnkey-property.asp) can be worth it if you don't want to invest the time or money into changing a property to meet the needs of tenants or homebuyers.

As a homeowner who will live in the property, a turnkey property might be worth it for similar reasons. You might not have the time or money to renovate the property, or you might simply not want to.

## Is Buying a Turnkey Business Worth It?

Buying a [turnkey business](https://www.investopedia.com/terms/t/turnkeybusiness.asp) can be worth it if you want to skip the start-up grind. That said, you'll miss out on the sweat equity that the founders built when they exchanged their time for ownership of the company. You'll pay a premium for coming in at a later stage. But it can be worth it.

## Does Turnkey Mean Fully Furnished?

No, turnkey does not necessarily mean fully furnished.

## The Bottom Line

A turnkey solution is ready to use when the customer interacts with it for the first time. No modifications are required.

While a turnkey solution comes with its advantages—affordability, for one—it also has its drawbacks. A turnkey solution won't necessarily address every single issue that a company may have, as it wasn't designed with that particular company in mind. If price isn't a factor and you don't mind waiting for a system to be built for your company, specifically, you might consider a custom-built solution. For many, though, a turnkey solution will work just fine.