JOINT VENTURE PARTNERSHIPS
As a business entity or individual that wants to increase your market reach and achieve more with ‘less’, in a relatively shorter time, a joint venture partnership proffers solution.
A joint venture partnership is a temporary enterprise formed by two or more companies for mutual benefits and characterized by shared ownership, shared returns and risks, and shared governance. It makes more resources available for business growth, offers greater capacity and increased expertise, provides access to established market and distribution channels.
It is pertinent for each partner involved to something tangible to offer and here’s a good place to state that it is absolutely important to choose the right venture partner.
The right partner in a joint venture partnership must have skills, resources and assets that complement yours, and also be able to add value and relevance to the business entity. Do not shy away from asking the right questions and doing a due diligence research on your prospective partner before agreeing to a partnership. In order to assess the suitability of your ‘partner’, the following are worth considering:
- Know for sure that your values complement. It is unwise to engage organisations that do not value the same as you.
- Find out if they have an existing partnership involvement with a rival business
- Ensure they financially secure
- Do you trust them enough to go into a partnership?
- What is their reputation, what is perception held about them?
- Do you have similar business objectives?
- Are they as good as they claim?
- Check their attitude and level of commitment to work
The ‘safety guidelines’ employed to attain profitable joint venture partnerships are not limited to the ones identified in this write-up. Knowing what you want to achieve with the partnership will help you to determine what to look out for in your prospective business partner.
Joint Venture Agreement
A written agreement between participants is required to start a joint venture. When you have decided to create a joint venture, make sure you have your terms and conditions clearly spelt out in the form of a written agreement. No matter the level of trust or confidence that you have in your new business partner, a written document that binds both parties is relevant.
Your joint venture agreement ought to cover:
- The objectives of the venture
- The responsibilities of each party, stated without ambiguity
- The ownership of intellectual property
- The financial contributions expected from each party
- The sharing of profits, losses and liabilities
- The duration of the joint venture
- How possible disputes can be resolvedThe pulling together of resources to form a joint venture partnership is of immense value to all involved, especially if terms and conditions are very well adhered to.