Everything You Must Know About Joint Venture
While a joint venture promotes productivity and growth, finding the right partner is what matters most to enjoy success. 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.
Whether you believe it or not, you can find companies that have added you as friend, following you or visited the same pages as you do which helps in developing fruitful relationship. 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 finding partners will be tedious and also frustrating at some point. 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. It is imperative that you download the latest accounts and take time to review it or perhaps, watch news to be able to be up-to-date with stories about your prospect joint venture partner.
You should always make enticing offers with your prospective JV partner and spell out the nitty-gritty of the deal such as customers, intellectual property rights, finance, legal issues and so on. When you create a draft proposal, make it a point that you clearly state what your objective and aims are. 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. Long story short, you must learn everything about your partnership and agreement to make sure that things 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.
Because all businesses have its strengths as well as weaknesses, it makes sense to find a JV that will fill in the weak spots. At the end of the day, JV is about growth.