A JV partnership helps boost traffic and sales to any business for much less time and money than other types of marketing. When you form a partnership with another business, you automatically reap the benefits of that company’s experience and customer base. By the same token, your partner also sees rewards from bringing your business onboard in a partnership. To ensure your joint ventures are successful, consider these four features of a successful JV partnership, and then choose your prospects according to these factors.
Related Businesses
A successful JV partnership is between two related, but different, businesses. The first guideline is to ensure you are catering to a similar customer base. For example, a florist who specializes in arrangements for weddings will be looking at the same customer profile as a photographer or caterer who also serves the wedding crowd.
By the same token, if your businesses are too similar, you will find yourselves in a competitive, rather than a symbiotic, relationship. If you are a photographer, you don’t want to approach another photography studio for a JV proposal.
Equal Benefits
Equal benefits do not necessarily translate to equally yoked businesses. In fact, you are better off looking for a JV partner who is larger and more established so you can take advantage of his expanded customer base. So what’s in it for the larger business? Probably a significant portion of your profits, at least at the beginning of the venture.
While the benefits may vary between the two JV partners, it is important that both businesses see similar value in the arrangement. A joint venture is much more likely to be successful over the long haul if both businesses are satisfied with what they are getting from the partnership.
Clear Terms
Like any business agreement, it is important that a JV partnership includes clear terms that both business owners understand. Whether you are managing link exchanges, pay-per-clicks or profit sharing, both businesses need to be solid on their expectations and benefits of the arrangement. This is particularly true if money will be changing hands between businesses. Clear terms keep both partners happy and prevent misunderstandings that could threaten to dissolve the partnership.
Written Contract
While clear terms are good going into a JV partnership, they are not sufficient in protecting the interests of each business owner. The terms must be spelled out in writing, with both partners signing the agreement before the partnership officially takes effect. You can create your own JV contract by using a template you can find on the Internet. If you prefer, an attorney can also draw up a contract that is appropriate for both businesses.
It is important to include the benefits of both companies, particularly if money is involved. If your JV partnership will have a set term, set the date for termination in the contract as well. If not, set a date for review to determine whether the partnership will continue.
A successful joint venture partnership does not happen automatically. If you form your business relationships with these features in mind, you will be more likely to create partnerships that benefit both companies over the long haul.
Christian Fea is CEO of Synertegic, Inc. A Joint Venture Marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability. To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.