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A JV that is entered into quickly and without much thought can be at best a waste of time and, possibly, money. At worst, it could be disastrous. To avoid unsuccessful JVs, there are several critical factors to keep in mind, such as choice of partner, a common vision, and good organization.
The choice of partner is the most vital part of starting a JV. You should know the person well enough to have confidence in them and to know whether they are trustworthy. There are plenty of fast talkers out there who are eager to separate a fool from his money. As with everything else in life, if it sounds too good to be true, it probably is.
It's best to find out as much as you can about any partner candidates you're considering. Look up information about them online and ask them for references and a detailed resume.
Knowing as much as you can about your partner is important, but it can be detrimental to enter into a business agreement with a close friend or loved one. If the JV were to fail, you could lose a valuable relationship along with your business. It can also be tempting to cut corners if you're working with a friend. It can be awkward to write out a binding legal contract that outlines both of your responsibilities when you would rather just trust the person to uphold his or her end of the deal. If you give in to this temptation, it might turn out that you never had the same long-term vision of the JV at all, and it can turn into a disappointment for all involved.
You'll want to look for a good balance in a partner -- someone you know well enough to trust, but not so well that your personal relationship will get in the way. Your partner should possess a skill set that will compliment your own. For example, perhaps you're really great at marketing products, but you lack organizational skills. Look for a partner whose organizational skills can make up for your shortcomings and who, perhaps, needs assistance with marketing.
Determining that both you and your JV partner share a common vision is another important aspect. To reach a particular goal together, you must both know what the goal is and understand how you're going to get there. If your partner believes the goal of the JV is to grow the business to a very large one, and you believe the goal is to keep the business small so you can run it on the side, you're not very likely to work well together. You can't possibly reach both your and your partner's goals because they conflict!
Keeping yourself organized can help guarantee that everyone is on the same page. The first step is to write a business plan that specifically outlines your goals and when you plan to achieve them. The business plan will also define the specific products, skills or services each partner brings into the JV.
As much as you might want to keep your partnership friendly, you must create a formal, binding contract. This document will keep everyone on safe legal footing if their responsibilities are called into question.
Time management is also a must when going into business with someone else. It's important to know your limits and not to bite off more than you can chew. Starting a joint venture can be stressful, and you won't be able to do everything at once. Take your time and complete one project at a time, and everyone will be much better off. Make sure your life can allow for the additional stress of a joint venture before signing any agreements with a partner.
With the right partner, shared goals, and clear organization, a joint venture can be one of the best means of increasing your company's size, skills, and customer base. Just make sure you spend time learning everything you can about how the joint venture will work for you, who your partner is, and how you can reach your goals together.
Category: Joint VentureJoint Ventures: Profit or Pitfall? was written by:Author:Justin BryceAdded: Sun, 08 Apr 2007 01:44:04 -0400 This Article Has Been Read 433 times View all Justin Bryce's articlesAbout the Author: Justin Bryce has been a contributing author for this website and is an acknowledged expert in the field of Marketing Emails. He can be found on the Internet at this website: http://www.emailsthatsell.com |
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