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 will be able to save money and time as well by partnering with existing customer, investor or supplier or with someone whom you have met in social media.
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.
At some point, it can be frustrating and tedious to locate the right partner. Much before approaching your prospective partner, it is critical that you 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. 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 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 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 major reason as to why you have to form a joint venture partnership is often because of the support you will get from a high-profile partner who has the resources you need. 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. At the end of the day, JV is about growth.