A business joint venture allows you to develop a product or service with other business owners that your target customers want to buy. The key to being successful with a joint venture is to have an agreement in place, know who your target customer is and for each partner in the joint venture to have their expectations included in the agreement.
Even though being part of a business joint venture is great for a business, you should also know that there are risks involved. Even so, don't let the risks keep you away from participating in one.
What is a business joint venture?
A joint venture is defined as an association of two or more individuals or companies engaged in a solitary business enterprise for profit without actual partnership or incorporation. Individuals or companies choose to enter into a business joint venture in order to maximize their strengths, minimize the risks and increase competitive advantage.
All joint ventures should be defined by a contract that not only outlines the specific terms of the venture. But also the length of time that the venture should last.
What should I look for in a potential joint venture partner?
When you are considering entering into a joint venture make sure that you outline what it is that you hope to achieve. List the qualities that you need in order to achieve your outlined goals. Here are some additional tips when looking for a joint venture partner:
- Look to partner with someone who compliments the product or service that you are already offering.
- Discuss the alliance from a standpoint of how it would be beneficial to you and your potential partner.
- Consider the geographical area of your potential partner, including time zone and their country of origin.
What resources are available to help form a joint venture?
You should always make sure to do your research whenever you are considering entering into any legal or binding contract. The Small Business Administration (SBA) is an invaluable resource when considering entering into a business joint venture. You can start with their website and this article “Venturing Into A Joint Venture“.
They have many more articles that can help you with procedures, applications and agreements. There are other business-related blogs that can offer you information about forming a joint venture.
There are many reasons for entering into a joint venture. The decision to enter into this type of partnership with another business can potentially be one of the best decisions that you've made for your business. Do your research and really think about what you want to accomplish with a business joint venture. Share your thoughts on this post in the comments.