When you head into any type of joint venture partnership, a written contract is a must. This document will protect your interests and the interests of your partner for as long as the partnership is in effect.
Some business owners are intimidated by the prospect of designing a joint venture contract, especially if they have never had experience with legal documents before. While you can hire an attorney for this purpose, you can also easily design your own agreement by keeping these key components in mind.
Purpose
The first component to put into your JV contract is the purpose of the joint venture. You and your partners should head into this agreement with similar goals in mind, and these should be clearly spelled out in your contract. The method by which you will achieve these goals should also be carefully outlined, ensuring all parties head into the agreement with full knowledge of what their responsibilities will be.
Benefits
Most JV partnerships are formed because each entity hopes to benefit from the agreement in some way. For newer businesses, this often means obtaining email lists and link traffic from a larger, more established company. Bigger companies usually enter into a JV partnership because they can reap commissions on the sales their partners make. No matter what your benefits will be, list them fully in the contract so no one is disappointed by the outcome of the agreement and no disputes arise after the fact.
Strategy
This is the process that will be utilized by both companies to achieve their goals. It will provide the brass tacks of the marketing concept that will be used to promote all the businesses involved. It may also involve the specific responsibilities each company will have to ensure the final outcome takes place. Since unrealized expectations can be the source of many lawsuits, make sure your expectations of one another are realistic by outlining them precisely in your contract.
Time Frame
Many JV partnerships are set for a specific amount of time and come complete with a due date when the partnership will terminate. Even if you want your partnership to be more open-ended, it is a good idea to agree on a date when you will revisit the agreement to ensure it’s still working for the benefits of all involved.
By providing a specific timeline for your JV partnership, you give all partners the chance to bow out of the agreement if it is not sufficiently beneficial. If the partnership is going well and you want more time, you can renegotiate your time frame when the initial deadline arrives.
JV partnerships are legally binding ventures, and the right contract will make all the difference in protecting your interests and offering an out if the agreement does not work. Whether you choose to hire an attorney to draft an agreement for you or use a template you find on the Internet to draw up your own, the contract is the key ingredient to a successful joint venture.
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.