Understanding Joint Venture
To enjoy success in a joint venture, it is integral to find the right partner as this will promote growth and productivity. It is integral to conduct thorough research to be able to do this and due diligence at the same time. 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.
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. A lot of companies publish key financial data on their site and is available with 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 creating a draft proposal, be sure that you state clearly what your objectives 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. In short, you have to learn everything about the partnership and the agreement to ensure that things will 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 can be about anything like a mailing list that can help catapult your product’s exposure or perhaps your proposed partner runs a forum and can help advertise products by simply putting up a banner. There are basically more reasons you can find why numerous people are now considering JV.
It totally makes sense to locate a JV that is capable of filling in the weak spots of your business. At the end of the day, JV is about growth.