Joint Ventures: Important Things To Consider Before Attempting A Joint Venture

This post was written by Internet Marketing John on December 15, 2009
Posted Under: Joint Ventures

Joint ventures can significantly increase your marketing network, break down barriers for entering into your market, and quickly generate increased revenues for your business; but there some important things to consider before attempting a joint venture that you need to know.

More and more entrepreneurs and work at home Internet business owners, in this highly competitive global environment, have united to increase their odds of survival, by entering into strategic joint venture alliances.

Although joint ventures are one of the most powerful tools for achieving success in today’s highly competitive business arena, some important things to consider before attempting a joint venture are listed below.

  • Before even going to step one; determine exactly why you want to enter into the joint venture.
  • Explain in writing, what your goal for the company is, how long the joint venture is expected to last, why you have chosen your partner or partners, and what involvement is expected of them as well as the parent companies.
  • Before entering into any joint venture, be sure that you conduct an in depth screening of your prospective partners.   It’s extremely important that everyone involved is on the same industrial plane. Do some research and check your prospective partner’s credentials.
  • Interview your prospective partner, and check into their past business dealings.  Confirm their sales figures and any customer feedback that might be available to you regarding their services.
  • Develop a detailed joint business plan, and a short list of prospective partners based on their contribution to the plan’s development.
  • A very important thing to consider before attempting a joint venture is the development of an exit strategy, and dissolution terms should the joint venture go south.
  • Find the most appropriate structure for your joint venture. Most fast growing companies are usually involved in strategic corporate partnerships.
  • Someone who understands significance of the availability and value, of appreciated or depreciated property that is being contributed to the proposed joint venture, should list the assets before entering into any agreement.

Misunderstanding the significance of appreciated property can skew the economics of the business deal for either or both companies.

  • Joint ventures should have the allocation of profits, losses, and other compensations to members that provide services, spelled out before an agreement is ever entered into.

This eliminates any complications that could arise later.

  • You should always take special notice of the role of the business architect.

The business architect is the person responsible for building long term, balanced, sustainable business systems.

They initiate new business ventures, design winning business models, and are generally leaders in all types of business innovations.

Business architects are found in many varied business settings, are managers of different and radical company settings, and often initiate successful joint ventures.

  • Human resources play an important role in joint ventures and help you get into good business partnerships.

There are many important things to consider before attempting a joint venture, but after you have agreed on the sharing of managerial power, capital, human resources, technology, risks, and rewards under the new entity, and see the expansion of your business influence, more powerful market presence, and soaring profits; you’ll know that you made the right decision.

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