It is important to remember that a joint venture is not a merger, so there is no transfer of any kind of ownership. However, it can be a good idea to outline what each party is bringing to the table in the form of a legal agreement. It can also be a good idea to outline what the purpose of the joint venture is to help alleviate unspoken expectations on the part of either party. There are joint venture templates available online should you choose to draw something up yourself. Most business people recommend having a lawyer at least review your document to make sure that you aren't inadvertently signing a portion of your business away.

Creative joint venture relationships

Because a joint venture is not a merger, you can use joint ventures in a variety of ways, particularly as a small to mid-sized business. Joint ventures allow you to share resources, not only with complimentary industries to your own, but also with your competition. That is, of course, if your competition is open to joint venturing. Naturally, when you engage in a joint venture with your competitor, you will want to make sure that you have fully protected and proprietary information, but this type of relationship can be fruitful.

Here is a real-life example of a competitive joint venture: There were two staffing companies who combined resources to woo a large client whom neither of them had the capacity to service. Both owners knew and respected each other, so they decided a joint venture might be in order. After discussing the logistics of such a venture, it was decided that they would each service a specific geographic area for the client in order to prevent doubling up on staffing assignments. Then, if one or the other could not service the client's request in their area, they would pass the business to the other agency. In this way, the client was serviced at all times, and the two smaller companies were able to gain a piece of the action in the big business area. The venture worked so well that both companies increased their profit margin by 30%. Realizing they could do more with additional large clients, they quickly adopted the joint venture philosophy as part of their overall business plan. Guess what? It worked.

Again, it is possible to joint venture with your competition if you're creative. What about a photographer who has too much wedding business at a given time of the year? By joint venturing with a competitor, it could be possible to still make revenue; you do not turn away the business because you can have the other photographer cover the occasion.

Finding the right joint venture fit

Joint venturing with a competitor can be a scary proposition. It's wise to know whom you are joint venturing with, and how they normally conduct business. If you have similar operating procedures, it could be worth an exploratory meeting to see if a joint venture could become a win-win for both businesses. A conversation never hurts. Neither does a trial run. Above all, remember that the key to a great joint venture is to communicate, communicate, and communicate. You must communicate expectations, operating procedures, timelines, and the like. Who knows? If one competitive joint venture works, you may find yourself building streams of revenue you never would have imagined.