Joint ventures can be very advantageous for business growth if you know how to leverage them properly.
Joint ventures can help your small business drive sales. These partnerships are becoming more and more common today, as they provide a number of benefits to both parties involved. In choosing the right business partner, you should be able to generate a boost in publicity and reputation for your business, resulting in greater sales numbers.
What is a Joint Venture?
When two or more individuals and/or companies work together without merging, or engaging in business under the same name, you have a joint venture. The term of the joint venture is usually dependent on day-to-day circumstances. For example, two companies may come together under a joint venture to plan and mutually promote a specific event. After the event, both companies might go their separate ways. Alternatively, both companies may decide to collaborate on longer-term projects or strategy.
Why is a Joint Venture Beneficial?
With a joint venture partner, there are myriad advantages for your business. First, promotional cost and expertise can be shared among joint venture partners, increasing your business exposure and improving your brand image. Alternatively, you may enter into a joint venture with a marketing company, one who is willing to do the promotion for a portion of your profits. Regardless, having a partner share the burden of advertising, marketing and general promotions provides more bang for your small business buck.
Further, if you are new to the industry, it can be a very good idea to enter into a joint venture with a well-known business for guidance and mentoring, in addition to established brand exposure and expertise. In some cases, such an arrangement is worth far more an even split of the profits. Keep in mind that the larger business already has the reputation and brand awareness with your target audience. An established business will also have a loyal customer base, which may help your business establish a list of customers much faster than independent efforts.
Finding a Joint Venture Partner
When searching for a suitable joint venture partner, take a close look at your competitors, in addition to those businesses that offer products that complement yours. If you sell notebooks and another company sells pens, it makes sense to team up and sell them together to your mutual clientele.
In every joint venture, it’s very important to protect yourself legally, as you could end up giving away valuable products, services and/or profits otherwise. Have a lawyer check the contract before you sign, particularly if your partner drafted the contract.
A good joint venture partnership is an excellent way to boost your company’s sales and help all parties involved. Remember that there can be more than two parties in a joint venture; you can include as many partners as you like!