Getting Started With Joint Ventures
If you have read anything about opening a business or growing the business you already have, it's likely you've seen the term joint venture, or JV. A joint venture is a way for you to partner with another business for a specific reason or reasons. You might find you can bolster each others' strong points or share each others' markets. When two businesses create a joint venture, they are actually creating an entirely new business entity.
The term joint venture does not in fact refer to this new entity but to the reason for the partnership. Also, there are no legal limits on who can enter into a JV -- anyone can, including individuals, corporations, websites and small local businesses.
Joint ventures are quite common in large businesses. They're often necessary for the purpose of entering into certain markets. Some countries require that foreign companies enter into a joint venture with a company from within the country in order to do business there. And, even when a joint venture isn't required, having one partner located in the geographical region offers a local presence and helps keep a better eye on the market there.
Even where it's not required, joint ventures offer fantastic benefits when they're not taken too lightly. One reason many small businesses enter into joint ventures is to take advantage of the products, skill sets or customer base of another company.
Let's say you are a software engineer who knows how to fix many of the bugs that plague computers. You have advertised your services, but you just aren't getting much business. You know that there is a store down the street that sells computers, but doesn't offer repair services, so you approach them about a joint venture. They will benefit by no longer turning people away who need repairs, and you will start making money doing what you love.
Although joint ventures offer a great many benefits to all parties involved, they can be disastrous if they're taken too lightly. Small businesses that are able to successfully enter into joint ventures generally possess five common characteristics: 1) Creativity; 2) Persistence; 3) Visualization skills; 4) Negotiation skills; 5) Client relationship skills.
Creativity is a key skill in successfully seeking out and developing joint ventures. You must be able to see all the ways that your business could fit into various joint ventures. There are joint venture possibilities for virtually anyone and any kind of business if you know where -- and how -- to look. Creativity is also important when you're explaining the benefits of a joint venture to a potential business partner.
Persistence will come in especially handy as you begin to explain your ideas to those you'd like to partner with. This is especially true if you're approaching other small businesses who may not understand how joint ventures work.
You must have good visualization skills because you have to be able to predict how your side of the JV will benefit your partner, and how the two sides will fit together. Think of it as a jigsaw puzzle. If you're forcing the pieces together, you need to find a better fit. No breaking out the saw, now.
When you're putting together your JV agreement and business plan, you'll spend a lot of time negotiating with your partner. You'll want to make sure you're getting exactly what you want out of the deal, and that means sometimes you'll have to be pretty hard-nosed. If you have difficulty entering into professional negotiations, forming a strong joint venture that provides the best benefits for you will be very difficult.
When all that is said and done, you'll need to start thinking about your client relationships. Clients are often put off by the thought of a joint venture, thinking that your business, products or services are going to change or become pricier. To make sure that you continue to gain, not lose, clients, you'll need to nurture them and make sure they understand what the new entity means for them. If you attend to your clients, not only will they remain loyal to you, you will also find out which parts of your new endeavor they respond to best.
If you properly research what it means to enter a joint venture, and look at all the different possibilities before choosing a partner, you are likely to succeed and reap great benefits for your efforts. The main thing is to be assertive, honest with your partner -- and most of all, to make it fun!
To learn more about Joint Ventures and Joint Venture Contracts
visit the writer, Justin Bryce, at his website:
http://www.lazy-internet-marketing.com/bm/joint-ventures.ag.php
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