Michael Henderson worked as a subcontracted electrician for a house building business in the 1980s and 1990s. He always worked alongside another subcontractor, Dave Harrison, a plumber. When the house builders went into liquidation in the middle of a building project, it left both Michael and Dave with no work. Out of this crisis the joint venture of Henderson and Harrison began. Michael explains how they went about it.

What I did

Join forces with someone else so I could tender for larger projects

"Having put all my eggs in one basket, the work suddenly dried up when the builders went into liquidation. Both Dave and I continued to see the job through to the end working with the liquidators, and planning the work between us. A few months later, a large project came up for tender - but only for VAT-registered businesses. Dave and I discussed bidding for the work together under a joint venture of Henderson and Harrison as we couldn't do it under our own individual names because we weren't VAT registered. It was also attractive because the work called for electrics and plumbing together. We shook hands and decided to split the profits 50:50. The joint venture between us has continued from that moment."

Identify complementary skills

"It's a question of mixing and matching our talents to make the most of our skills. Dave is a hands-on person, so he supervises the jobs on site. He works well with the lads and is very knowledgeable about the technical side of plumbing. Dave always said I'm the one with the business brain, so I work in the office and I also go out to quote for new jobs. I like working with new customers, I'm a people person. Identifying and playing to your strengths is the key to working within a joint venture, it means we're both happy in our work."

Consider formalising the arrangement

"Our arrangement at the moment is a verbal one - we split everything 50:50. However, at some stage it's possible that we could put everything on an official footing. We would need to use a solicitor to draw up a proper agreement, which would formalise how we would divide up our profits and the value of assets, such as the stock and our vehicles."

What I'd do differently

Agreed to set up the partnership sooner

"Dave and I should have set up our joint venture sooner. Although we were happy working as individual contractors, once we joined forces, we could bid for bigger jobs and have the chance of making more profits. We did it because circumstances more or less forced us into it, but sometimes it's worth just taking the decision to move your business on and looking at a larger picture."