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 will be able to save money and time as well by partnering with existing customer, investor or supplier or with someone whom you have met in social media.
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. But in order to establish who owns who, it will be critical to design and draft an agreement that thoroughly discusses these things.
At some point, it can be frustrating and tedious to locate the right partner. Just before you approach your prospective partner, it will be necessary to practice due diligence. Today, you can find numerous companies that publish their financial reports directly on their site which can be acquired through Registrar of Companies. You need to download the latest accounts and then review it or watch news to be able to know the status about your prospective joint venture partner.
It is essential that you make offers that will entice your prospective JV partner and be able to talk about every single thing included in the deal from customers, intellectual property rights, finance, legal issues and so on. See to it that you have outlined clearly your objectives and aims when you are creating a draft proposal. If for example that the prospective partner accepts your offer, then you need to create an agreement that will include details which include stake and investment of both parties, objectives and aims, legal status of the JV, makeup management team and future exit if needed. So to ensure that things will go according to plan, it is essential to learn everything in the agreement and your partnership.
The primary reasons why you want to form joint venture partnership is that, you want support of a high profile partner who has got the resources you need 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.
It totally makes sense to locate a JV that is capable of filling in the weak spots of your business. At the end of the day, JV is about growth.