The ideal partner in a joint venture is one that has resources, skills and assets that complement your own. The joint venture has to work contractually, but there should also be a good fit between the cultures of the two organizations.
Setting up a joint venture can represent a major change to your business. However beneficial it may be to your potential for growth, it needs to fit with your overall business strategy and goals of the company. It’s important to review your business partners and their strategy & goals before committing to a joint venture.
What to look for in a Joint Venture Partner?
A good starting place is to assess the suitability of existing customers and suppliers with whom you already have a long-term relationship. You could also think about your competitors or other professional associates.
Broadly, you need to consider the following,
- How well do they perform?
- What is their attitude to collaboration and do they share your level of commitment?
- Do you share the same business objectives?
- Can you trust them?
- Do their brand values complement yours?
- What kind of reputation do they have?
If you opt to assess a new potential joint venture partner, you need to carry out some basic checks:
- Are they financially secure?
- Do they have any credit problems?
- Do they already have joint venture partnerships with other businesses?
- What kind of management team do they have in place?
- How are they performing in terms of production, marketing and personnel?
- What do their customers and suppliers say about their trustworthiness and reputation?
Before you consider signing up to a joint venture, it’s important to protect your own interests. This should include drawing up legal documents to protect your own trade secrets and finding out whether your potential partner holds intellectual property rights agreements. Also, it’s worth checking to see whether they have other agreements in place, either with their employees or consultants.
Evaluate Your Joint Venture Partnership
Before starting a joint venture, the parties involved need to understand what they each want from the relationship. Smaller businesses often want to access a larger partner’s resources, such as a strong distribution network, specialist employees and financial resources. The larger business might benefit from working with a more flexible, innovative partner, or simply from access to new products or intellectual property.
Read More : When and Why a Business Can Enter into Joint Ventures?
Similarly, you might decide to build a stronger relationship with a supplier. You might benefit from their knowledge of new technologies and get a better quality of service. The supplier’s aim might be to strengthen their business from a guaranteed volume of sales to you.
The Right Joint Venture Partner
Whatever your aims, the joint venture arrangement needs to be fair to both parties. Any deal should recognize what you each contribute. Also, ensure that you both understand what the agreement is expected to achieve. Always set realistic expectations and allow success to be measured.
Learn More : How to Handle Money Matters with Your Business Partners?
The objectives on which you agree in a joint venture partnership should be turned into a working relationship that encourages teamwork and trust. Every time, remember these point before you choose to choose the right joint venture partner.
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