Understanding Joint Venture
While joint venture is promoting growth and productivity, being able to find the right partner is what matters a lot. It is imperative to perform in-depth research in order to get this done and due diligence as well. With this, you can save money and time by working with people who are already your customer, supplier, investor or with someone whom you’ve met socially.
The truth is, in social media you can find several companies that follow you, added you as a friend or has visited same pages as you do which helps in forming a fruitful partnership. Great care has to be taken into consideration in designing as well as drafting of such agreement in order to clarify who exactly owns who.
The process of finding partners will be tedious and also frustrating at some point. Much before approaching your prospective partner, it is critical that you practice due diligence. A lot of companies publish key financial data on their site and is available with Registrar of Companies. You have to download the latest accounts and review it or watch news in order to learn the latest stories regarding your prospective joint venture partner.
You must make enticing offers w/ the JV partner in question and discuss the everything that is part of the deal from customers, intellectual property rights, finance, legal issues and so on. When creating a draft proposal, be sure that you state clearly what your objectives and aims are. If for instance that the prospective partner has accepted your offer, you have to create an agreement that includes the details including the key aims as well as objectives, the stake and investment of every party, legal status of the JV and also, the makeup management team and even future exit if required. In short, you have to learn everything about the partnership and the agreement to ensure that things will go according to plan.
The main reason to why you should form joint venture partnership is that, you are seeking support of a high profile partner who has the resources needed for continuous growth. This might be a huge mailing list that could get significant exposure for your products fast or the proposed partner is running a forum and can help in advertising your product by putting up a banner. Well quite frankly, you are going to find more reasons why increasing number of entrepreneurs take JV into consideration.
Since all businesses have its weaknesses and strengths, it makes perfect sense to find JV to fill the weak spots. Because at the end of the day, joint venture is all about growth.