Successful businesses around the world understand the power of creating joint ventures to grow their business. Developing relationships with other companies gives you the ability to grow your revenues and has been used by corporate giants and small business owners. The principle works as it is based on strategic alliances.
What Is A Joint Venture?
A joint venture is essentially partnering with other businesses to create a partnership. This partnership should be beneficial to all parties involved. Although somewhat similar to a merger they are not the same. Mergers require businesses to transfer ownership while joint ventures do not.
Christopher D. McDemus, a corporate attorney with MCD Law Partners in Fort Washington, Pennsylvania, defines a joint venture as “a relationship where two or more parties work together to achieve some end where the sum of their efforts becomes greater than its parts.”
How To Set Up A Successful Joint Venture
While the act of setting up a joint venture can be challenging there is usually a system to follow to set up a successful alliance. The execution is important for planning and the overall success of the venture. Without the proper planning your business can lose money on lost profits. A failed joint venture can also create failed relations with other businesses.
To set up a successful joint venture you will want to know what you hope to accomplish. Be clear and concise in what your goals are so you can determine if the alliance has succeeded. Now your goals might not be the same as your partner, but this isn’t a bad thing. You want a partnership where everyone’s goals are somewhat complimentary to each other. Everyone needs to succeed.
After you are aware of your goals you’ll want to find a partner and plan the venture. Not all partnerships are created equal. Sometimes businesses want to work together for ego and profits are not a concern. These larger businesses are often looking for more exposure in the given industry or marketplace and usually don’t benefit smaller businesses. The partnership needs to make sense for your business and goals. Focus on managing the relationship for a win-win outcome. You need to communicate effectively and understand each other. With trust and work you can have a successful joint venture in your business.
For more information on how we can help your business create successful joint ventures and increase your revenues, please contact us.