Thinking about jumping into a joint venture, but unsure where to start? The good news is that they don’t have to be as complex as they might appear on the surface. We have five steps to follow to ensure you enter into a JV that benefits both you and your partner.
Finding a Partner
The first step in a joint venture is often the hardest: locating a prospective business for your partnership. While they work with companies big and small, the key is to find a business that offers a related but separate product or service to your own. This way, you target the same market with your advertising without directly competing with each other for new customers.
Signing on the Bottom Line
Successful joint ventures should always begin with a written contract that outlines the full scope of the partnership and the responsibility and liability of every company involved in the agreement. Your contract should include the process by which you will share and report profits, what you will each bring to the table in terms of resources, and an action plan if the components of the contract are not properly maintained. Both partners should sign and date the contract so each is held equally liable if things don’t go as planned.
Devising a Marketing Strategy
You and your JV partner should work together to devise a marketing strategy that provides equal benefit to both of your businesses. It might be as easy as exchanging brochures or as complex as a full online advertising campaign complete with backlinks, autoresponders and email blitzes. The important thing is to sit down together to agree on the marketing strategy you will use, as well as the resources both of you will bring to the table to make your marketing campaign a success.
Preparing for the Influx
Since the primary purpose is to build your business, it’s important to prepare for an increased customer load before those individuals begin visiting your business and making purchases. When you set up your JV, don’t forget to prepare your staff for the potential boom ahead by providing the appropriate training and staff levels to handle the influx of new customers.
Knowing When to Say Goodbye
Most joint ventures do not last forever, so it’s important to know when to cut ties and go your separate ways. In some cases, the length of the agreement may be explicitly spelled out in your contract when you originally formed your partnership. In other situations, an arrangement to assess the effectiveness of your joint venture periodically offers both companies an out once the partnership loses its luster.
Joint ventures may seem somewhat overwhelming at first, but when you break the process down into easy-to-follow steps, the entire undertaking becomes much easier. If you follow each of these steps in the process carefully and thoughtfully, your new JV partnership is much more likely to become the success you are hoping for.
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.
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