Understanding Joint Venture
While joint venture is promoting growth and productivity, being able to find the right partner is what matters a lot. Now to get this thing done, it will be critical to perform due diligence in doing thorough research. 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.
As a matter of fact, in social media, you can find companies that follow you, added you as a friend or visited same pages as you do can help in forming fruitful partnership. Great care has to be taken into consideration in designing as well as drafting of such agreement in order to clarify who exactly owns who.
The process of locating partners are going to be tedious and frustrating at some point. It’ll be imperative that you practice due diligence before you start approaching any of your prospective partner. Many different companies are publishing key financial data onto their site and available with 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.
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 you create a draft proposal, make it a point that you clearly state what your objective and aims are. Say for example that the prospective partner is pleased with your offer, you can now proceed to the next step which is creating an agreement that consist of the following details: exit strategy in the future, makeup management team, investment and stake of every party and legal status of the JV. In short, you have to learn everything about the partnership and the agreement to ensure that things will go according to plan.
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 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. Basically, there are more reasons that you can find why many people are considering JV.
Since all businesses have its weaknesses and strengths, it makes perfect sense to find JV to fill the weak spots. Because no matter what you do, entering JV is focused about growth.