How to Set Up a Joint Venture (Part 2)
In the previous post, I defined the joint venture and defined the kind of joint venture you’d like to enter. This next part will elaborate more on the process.
Assess your readiness for a joint venture. You will not only share profits with your business partner; you will also be sharing risks. Be realistic about your business’ strengths and weaknesses. Reassess your business strategy.
Know what you want from the relationship. It may be that you will want to access the resources of a bigger company, or penetrate bigger markets that you would otherwise have no access to. Recognize what you will both contribute, what you will want to achieve, and your expectations. Success must be open to being measured.
Once you know what you want on your end, it’s time to assess your potential partner. They should complement your own skills, resources, and assets. Do you trust them? Do they perform well and deliver? Are they committed? You will also have to know if they’re financially secure, if they’ve done joint ventures with other people, and what their reputation is.
Draw up a written agreement that includes your structure, objectives, the resources you will contribute, intellectual property that will be created, as well as your respective responsibilities. Within must be profits and losses shared. How disputes will be solved must also be delineated.
Now, define how your business venture will work. Honesty is the best policy and your ability to communicate can dictate the outcome of your enterprise. Arrange meetings with your partner, and share information. You both should be very aware of what your goals are, working towards them
Be flexible. Do not think that your objectives are the be all and end all of your venture. You can improve on how things work and even revise objectives accordingly.
Have an exit strategy available. If you’ve tackled how disputes shall be addressed in advance then ending a joint venture is relatively easy. Allow for termination conditions. Things won’t always be peachy but a well-planned joint venture agreement can save you a world of trouble.
Related Articles:
- How to Set Up a Joint Venture (Part 1)
- All about venture capital camps
- How Your Mindset Affects Your Start Up
- Why selling information products is not such a good idea
- Be An Online Distributor
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Joint Ventures have always interested me, but I have never been able to hook up. Maybe I am too picky, but I do not want to waste time on a dead end street. Thanks for the advice however, I will use it to keep looking!