Entrepreneurs are known for being creative. They have a knack for observing a particular market or niche and developing a product or service that fits that niche. Clever entrepreneurs are also clever marketers. And one great way to expand your market and increase profits is by forming a joint venture.
But should an entrepreneur or small business owner form a JV simply because they can? Not always. A successful joint venture requires careful planning and consideration. It may even require special research or resources for producing and packaging a successful joint product.
A JV should be approached with the same respect as any other business strategy. There are four important strategic points that any entrepreneur or business owner should consider before partnering up.
1. Set Your Own Clear Goals
Though a JV does require joint strategies between two people, your own goals are important for it’s ultimate success. What do you want to accomplish? Do you want more profits? Expanded markets? More credibility and better reputation from an association with a prominent joint venture partner? Make sure you know what you want before you agree sign on with a new partner.
2. Find a Complementary Partner
Knowing what you want from the joint venture will help you find a complementary partner. Keep in mind that a JV doesn’t have to be between two similar sized businesses in the same industry. You may be a small business owner and form a successful partnership with a larger corporation, as long as you have complementary goals. And don’t think because you offer a service, say, financial advisement, that you could not form a creative and successful arrangement with another business owner who manufactures fishing tackle. Having a win-win strategy, regardless of the industry or business size, is the most important thing to keep in mind when looking for a potential JV partner.
3. Carefully Plan The JV
The success of your JV depends upon the careful planning that you and your partner perform in the very beginning. You will need to negotiate your plan together to reach a mutually beneficial agreement. You and your new partner will need to agree upon a legal business type for your venture, as well as the overall JV goals and the tactics you will need to reach those goals.
4. Nurture the JV Relationship
Remember that a JV is not just a business venture; it’s also a relationship. You’ll want to continually nurture the relationship with effective communication and cooperation. And don’t forget to reward yourselves for achieving goals. A good JV relationship will make the road much easier to travel, and keep the venture going for a long and successful run.
Discover your potential joint venture. Get your personal business goals in place and find a good partner with whom you can work well. Keep these strategies in mind before you form your JV, and you’ll have a much easier time getting a successful JV assembled.
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