FROM MIKE'S DESK
Here's a word I've learned to distrust after 35 years: turnkey.
You see it in almost every listing. "Turnkey operation." "Fully turnkey." "Truly turnkey, owner not needed on site." It sounds great. It's supposed to sound great. That's the whole point.
But a word that appears in 80 percent of listings and means something different in every one of them is not a description. It's a marketing term. And in the broker's vocabulary, turnkey almost never means what the average buyer hears.
Here's what the average buyer hears. I can show up on day one, keep doing what the seller was doing, and the business will keep running the way it always has. The owner's job was simple, the team handles most of it, and my involvement is mostly strategic.
Here's what the broker often means. The business has an operations manual somewhere. The seller is open to a short training period. The staff is used to showing up even when the owner is traveling. That's it. Everything else about the business, including the customer relationships, the vendor terms, the pricing decisions, the hiring, the sales calls, the problem-solving, and the twenty little things the owner does without thinking, is still being held together by the owner's presence, pattern recognition, or reputation.
The gap between those two interpretations is where acquisitions go to die.
I once looked at a landscaping business described as turnkey. Thirty accounts. Two crews. Eight years in operation. Owner willing to train for two weeks. The buyer I was helping was ready to sign. Before he did, I asked a single question. Who handles the inbound calls when a customer wants to upgrade their contract?
The owner. Every time. For eight years.
That's not turnkey. That's a business with an operations manual sitting on a shelf and an owner who personally underwrites every customer relationship. Take the owner out, and within six months the customer base is going to test the new owner to see if they get the same service. Half of them are going to be disappointed. A quarter are going to leave.
Here's the question that cuts through the marketing. When you talk to a seller who claims turnkey, ask them this. If you left for ninety days right now, what would break? If the answer is anything other than "nothing meaningful," you have your answer. Turnkey means the business runs without the owner. If the owner can't leave for three months without the business degrading, it isn't turnkey. It's dependent. And that changes everything about how you price it, how you structure it, and how you transition it.
There's a second question that goes with the first. Ask the seller what they do in a normal week that isn't written down anywhere. The honest ones will list five to ten things, and you'll learn more about the business in that conversation than from the entire CIM. The dishonest ones will tell you nothing is undocumented, which is its own kind of answer.
Smart buyers don't get fooled by turnkey. They assume the opposite until proven otherwise, and they negotiate the transition period, the seller note, and the retention clauses accordingly.
The word is doing work on you. Make it work for you instead.
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