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 integral to conduct thorough research to be able to do this and due diligence at the same time. 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 needs to be taken into mind when designing an drafting such agreement to be able to clarify who owns who.
The process of locating partners are going to be tedious and frustrating at some point. Just before you approach your prospective partner, it will be necessary to practice due diligence. Many different companies are publishing key financial data onto their site and 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 can be literally about anything that can help expose your products to a bigger market like a mailing list or maybe your expected partner runs an established forum that can put a banner to advertise your products. 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.