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The hardest thing for small businesses is often to become established within a community. Old businesses already have firm and wide customer bases, and building a good set of regular customers is time-consuming. Many new entrepreneurs also worry about spending too much on advertising, and this can be another great advantage of creating a joint venture.
Here's an example of how a joint venture can work for a typical small business:
Joy Smith is a designer of handbags. Her creations are beautiful and colorful, and she is very proud of what she does. When she decides that designing purses is her true calling, she leaves her career to open her own small boutique.
Joy has a great big grand opening with colorful posters and banners in front of her new store, and over the first few weeks she makes good sales. When the newness wears off and the banners are put away, however, Joy's sales start to slump.
Joy is persistent and refuses to give up on her dream. She knows she should advertise; however, money is short and she can't really afford to do that. So, Joy spends some time thinking about who her business contacts are, how they can help her, and what she can offer them in return.
Joy contacts the woman who runs her supply store. She has a boutique in town that sells fabrics and decorations for projects like Joy's. She knows Joy as a valued customer, so Joy decides to approach her about a possible joint venture.
Joy approaches the woman about putting up a display of her purses next to the front door. She says that way people can see what a final product using her wares could look like, and she offers to give the other woman a portion of the profits from any of those purses that sell.
Both parties benefit. Joy gets some free advertising, increases her customer base, and sells some bags. The supply store also gets some advertising for its products used in making the handbags, offers its customers a product, and receives a percentage of the sales from handbags sold there. In addition, they keep Joy as a loyal customer who continues to buy all her supplies there.
Truth be told, that is a very simple example of a potential joint venture. Still, even the smallest business deals can aid both parties in growing their business and profits. Joy lucked out by choosing to do business with someone she knew fairly well and already had a relationship with.
In real life, it can be difficult to convince an established business to enter into a joint venture, especially if you are new to the area. There is a lot of trust involved, and both parties have to hold up their end of the agreement.
When entering into a new joint venture, be sure to spend a great deal of time talking to your partner about what both of you want out of the agreement. Develop a strong, clear business plan that carefully spells out the responsibilities of all involved and how the JV will work.
Remember also that you don't have to leap for the first joint venture that comes your way. Consider all the ways a joint venture could help your business succeed, then make a list of potential contacts and partners that might be interested and what you would give them in return. Then, before you contact anyone, develop a plan that you can present to potential partners.
When you take the time to think creatively about how JVs can help your business succeed, determine who your best partners could be, and take the time to carefully plan the venture, your business can grow by leaps and bounds.
Category: Joint VentureNeed To Become An Expert With Joint Ventures? was written by:Author:Justin BryceAdded: Sun, 08 Apr 2007 01:44:04 -0400 This Article Has Been Read 460 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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