If you are considering a joint venture with another company, you’re actually thinking WAY beyond yourself and your own goals. You are thinking BIG. Strength in numbers, as they say. Think about it… this goes beyond the whole “I’ll scratch your back if you’ll scratch mine” mentality. This is mutual collaboration.
There are many strong reasons behind forming a joint venture, even if your business already has great growth potential and innovative ideas. Think about it! Why not if you can expand your business, move into new markets, perhaps even concentrate on overseas ventures?
It is worth undertaking if you are able to grow your business, and the joint venture allows you access to more markets and gives you increased technical knowledge and resources.
Things to Consider Before a Joint Venture
1) Make sure that there is constant communication with all parties involved and that nothing is assumed.
2) Are the objectives the same? This is important… you need to be working towards the same common goals for a successful joint venture. If you’re on different paths, you’ll diverge at crucial points and end up getting frustrated.
3) Different cultures and backgrounds could result in poor outcomes. Be careful with this. Discuss management techniques in-depth, and make sure that similarities outweigh the differences.
4) Do both parties bring the same balance of assets, expertise, and investment to the relationship? If it is too imbalanced, there will likely be problems with your joint venture regardless of how much history you have with the company.
5) Is there an agreement on the type and amount of leadership which will be available to support this venture, especially in the early stages?
6) Has there been continual dialogue and communication of the business plan to everybody involved?
A successful and productive joint venture is like a perfect marriage, and it takes a lot of work and communication but it can be done, and when it works it is a beautiful thing!
