A joint venture is the formation of a single entity, by two or more separate businesses, control of which is shared by the parties involved. The ??parent?? companies get to keep their own interests outside of the venture but within it, everything is shared. A successful joint venture can be a very lucrative business proposition.
An alliance created with an eye on strategy, your joint venture partners should complement your business activities. They should capable of providing a complementary service like distribution, finance, technology or personnel. For example, you could form a venture with a company with distribution capabilities if you need one and offer your finance capabilities in return.
So that everyone in the joint venture gains, and gets what they want from it. But conflicting views among the parties to the venture can spoil the party. So here are some things you should look at before you become party to one:
Check the Credentials
Before entering into any business relationship, it is important to know whom it is you are dealing with. This is especially in joint ventures, as your reputation becomes entwined with that of your partners in the venture. Verify information with third parties, and make sure that there is a strong basis for trust. Also, ensure that the company is capable of holding up its end of the deal.
Build a Business Plan
The business plan for your joint venture should be drawn up by all parties involved. The plan should include clearly defined goals for the venture as well as benchmarks for defining success. An exit strategy that is acceptable to all parties as well as terms for winding up the venture should also be incorporated. There should be a contingency plan in case for some reason the venture is dissolved before the specified date.
Appropriate Structure
You can register your joint venture in a variety of different ways. A Limited Liability Corporation is one option as are other types of new businesses. Many fast growing companies choose to register their joint ventures as strategic corporate partnerships. Investigate all your options before making a decision.
Availability of Property and Resources
Ensure that what each partner brings in terms of land and buildings, revalued or depreciated and other resources are clearly spelt out. Remember to establish whether any conditions attached, like limitations on use of property. Clearing all issues at this stage will help avoid monetary problems down the road.
Special Allocations
In the event that special allocations need to be made, this needs to be decided beforehand. These items include special gain or loss, and also includes income and deductions. If there is a loss, some of that will need to be allocated to each of the partners. Additionally, compensation to the partners that provide specific services should also be determined beforehand.
If your partners and you find it difficult to reach agreement on the above issues, it may be time to say goodbye. You should look for other partners, with whom you can work. Because when you can come to an understanding, joint ventures can yield high profits.
A Joint Venture Between
But why is it that some people are not using this strategy for their online business? Why were they not able to make their joint ventures work?
The reasons is may be because:
1. Not offering your joint ventures. Are you just sitting there and waiting for a potential partner to just come up to you and tell you that they want to get into joint ventures with you?
Unless you give them something they will not be able to resist, most partners are not looking forward to your offer.
You obviously have to put in some time to think up a good offer. But then, all this will be worth the effort once you have your joint ventures up and rolling. As with every business, it take commitment and dedication to be able to get where you want to go. Nothing will be achieved in not trying.
2. Not following up. You are probably discouraged already because you have not heard from all that you have sent proposals to. Did it ever occur to you to follow up on those?
Joint ventures is sometimes considered spam because of the way they are being sent. So chances are, the ones who have received yours may have had that same thought and thrashed your proposals with all the rest.
Following up is the solution. The possibility that your potential customers will notice you is very much high when you follow up regularly. Based on the experience of joint ventures marketer, it takes a second or third email to get a response.
A combination of a follow-up email and a telephone call has also been known to get higher response rates. This is an option worth considering.
3. Not personalizing your joint venture offer. If your proposal does not speak directly to your readers, it probably will not succeed. That is one of the reasons why you should allot some time when creating a joint venture proposal.
It would be best to get to know more about the person and the business he or she is running. Go over to their site and check out what they are all about. This way, you can offer them a proposal that is crafted especially for them.
Mention some of the things you have seen on their site so they will know that you are really putting on time and effort in getting to know them.
4. A joint venture partner is worlds apart from joint ventures affiliate. The commissions you are offering your affiliates should not be the same as the commission will offer your partner. When you offer higher commissions to them, it will increase your chances of them accepting your proposal.
The standard commissions offered to joint venture partners should be more than 50 percent.
5. Targeting your kind. Do not be overconfident and try to large and stable businesses. The probability of them accepting you is very slim. Try out several businesses similar as yours or smaller than you are. By partnering with them, you can build a good track record about you and your success. Once you have done this, you can then go on and approach bigger companies.
Take into account that large businesses are also facing large problems. If they are that successful, they might already have the same products and services that you are offering. And their customers are already happy with what they have.
But if you feel that you have something unique and worthwhile to offer them, why not try? You have got nothing to lose by trying. At least you tried rather than just think of what could have been.
Now that you have a basic knowledge of what and what not to do with your joint venture proposal, you may want to rethink your strategy. It is best to try out different strategies and see which ones will work best for you.
Keep in mind that this is your joint venture and its future that you are giving out. Be sure to always think hard before making a final decision.
Both Vlad Ehrsam & Ravii Kumarr are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Vlad Ehrsam has sinced written about articles on various topics from Joint Venture, Brochures and The Internet. About the author: Vlad Ehrsam writes exclusively for Full Info on Business, visit there today for the latest Business advice, and their free newsletter is well worth signi. Vlad Ehrsam's top article generates over 74000 views. Bookmark Vlad Ehrsam to your Favourites.
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