If you want to ensure your joint venture is a successful one, use care when choosing the partner for the job. When you select a company that complements your own in terms of skills and resources, you will be much more likely to profit from the relationship.
We have tips to keep in mind when choosing your JV partner to offer you the best chance at a success.
Identify Your Purpose
A joint venture will only work if both partners are on the same page when it comes to the primary objectives of your agreement. If your purpose is to build a customer list, your approach will be very different than if your main goal is to expand your business to additional locations or re-invest profits into the enterprise.
Know your reason for establishing the partnership and make sure both parties agrees completely before signing on the bottom line.
List Your Assets
An ideal joint venture will combine resources, skills and other assets so that each company is contributing equal but unique benefits to the partnership. Begin by creating a list of the potential assets that you bring to the table and have your partner do the same. If your lists are sufficiently different, you can rest assured that this agreement will compound assets for a truly profitable experience.
Target Your Market
This may be one of the most important factors in choosing a JV partner. Businesses that are in a related industry often work the best. This is because you're both approaching a similar target market base without directly competing with one another.
For small business owners, this means finding a business that deals with the same customers as you, but offers an entirely different product or service. When you combine resources, you attract a larger market base without establishing a direct competition with your partner.
Determine Your Time Commitment
Many joint ventures fail because expectations about what each partner will bring to the agreement are not met. Before you approach a potential JV partner, give careful thought to how much time you can invest. This is also true of your resources. Have a clear idea of what you can realistically dedicate to your new partnership.
Once you have agreed to a particular time and resource commitment, do not fall short on your promise. When both parties are pulling their weight, the joint venture is much more likely to succeed.
JVs are everywhere you look today, but not all will bring successful results for the partners involved. To increase your odds, take the above-mentioned factors into consideration when choosing your potential partners. The right companies in your corner can make all the difference in whether your joint venture efforts boost your sales or fizzle out before any real benefits are seen.