Grow your business with joint ventures
In its simplest form, a joint venture partnership is a business agreement with another business. Done well, it can be a mutually beneficial way for both of you to grow your business.
Is it important to you that your business continues to grow consistently and constantly? Are you committed to making sure your business is capable and able to meet the needs of your market and thrive no matter what economic climate you are facing?
If you’re at the point where you’re ready to take your business to the next level, a joint venture partnership could be the ideal business growth strategy to work with, and could make a real difference to your bottom line.
There are some of you who jump at this thought, knowing instinctively that this is a great way to increase profit. Others just don’t like the concept of joint ventures and don’t want to go down this path at all.
That’s understandable as joint ventures can be a sticky creature, but really, if implemented correctly, they add to your business rather than taking anything away.
I personally love joint ventures, and the relationships that I‘ve formed from them have always been supportive, productive, and longstanding. It’s not about what I can get, but more about what we can do together that supports our mutual business growth.
"Don’t reach out to a potential joint venture partner before you have your idea or product ready, as you may damage the relationship before you begin."
In their book Changing the Channel – 12 Easy Ways to Make Millions for Your Business, Michael Masterson and MaryEllen Tribby suggest using the following strategies when selecting your joint-venture partners:
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- Look for strong partners – businesses that have significant skills and/or resources that you lack.
- Make sure that your contribution to the deal is equal to your partner’s. An unbalanced partnership is not good for either party.
- Avoid partners you don’t trust.
- If possible, limit the scope of the venture in the beginning and extend it as trust increases.
- Make agreements simple, but put them in writing.
- To avoid costly misunderstandings after the venture has begun, identify the value of each partner’s contributions at the outset. In determining the value of those contributions, remember that fairness is not an exact number, but a range. Try to be flexible – and favour partners who demonstrate the same flexibility.
- Establish clear protocols at the beginning for amending or unwinding the relationship if it fails to meet expectations.
- Goodwill is essential to success, and in this case means that you want your partner to benefit from the relationship as much as you do.
- Get your timing right. Don’t reach out to a potential joint venture partner before you have your idea or product ready, as you may damage the relationship before you begin.
As I mentioned earlier, the idea is about developing strong, financially rewarding, and long-term relationships. You want these relationships to grow and be as painless as possible.
If you’ve worked with joint ventures and have any tips for making them successful and helping you to grow your business, we’d love to hear from you. Please add your comments below.