What do you think of when you hear the words ~ joint
venture? Do you think of large corporations working on
multi-million dollar deals? Or, you may see entrepreneurs
engaging in partnerships that can share some or all of the
following: intellectual property, assets, database,
knowledge, and last but not least, profits.
Managing a joint venture
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.
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Christian Fea is a Collaboration Marketing Strategist. He
empowers business owners to discover how to implement
Integration, Alliance, and Joint Ventures marketing tactics
to solve their specific business challenges. He
demonstrates how you can create your own Collaboration
Marketing Strategy to increase your new sales, conversation
rates, and repeat business. He can be reached at:
http://www.christianfea.com
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