At some point, some businesses look to expand their network and influence in the business arena. There is also a need to enter a new market and extend their reach. Businessmen do what it takes to get their smart goals. Sometimes, this will call for the need of a joint venture.
A joint venture is a process where two or more businesses put their ideas together to achieve a common goal and expand their network. They share the risks and reward of joining this kind of venture. With joint ventures, the business is expanded and new products are developed, especially for overseas use.
Before going all out in joint ventures, you need to have a written proposal that you would give to the other parties. It needs to be put in formal writing to effectively enact every single part of it.
There are some things that you have to follow when writing a joint venture proposal. This takes on a more personal approach since it deals with getting the other businessman’s trust in making a partnership with you. Follow these tips when writing a joint venture proposal:
The moment you present your joint venture proposal, the other businessmen would wonder what made you come up with the proposal in the first place. Explain to them that you wish to have a partnership with them since you are selling almost the same product, or give almost the same service. This is the sole purpose of your partnership and you need to make them feel just that. You may also see joint venture agreement templates.
There are benefits in being in a joint venture, and you need to explain each of it to your prospective partner. Give them what they want to hear. Explain each benefit in detail and in the simplest of words. Give all the context you can give. This is where you convince them to have a partnership with you. You may also see printable joint venture agreements.
Write the proposal in a way that grabs the attention. Sometimes it is not just about the money. Joint ventures extend to understanding each other’s need and the desire to achieve the same goal. Before handing out the proposal, it really helps to research on your potential partner. This increases your chances of getting the approval you need. You may also see partnership agreement templates.
As much as possible, make your proposal personal. Which means you have to sympathize and recognize the need of these businessmen to extend their reach and increase their revenue. Make them feel that you are there to help them. An impersonal proposal has higher chances of getting ignored. You may also see formation agreement templates.
This is the last stretch of the convincing part that you have to do in your proposal. Make an offer that they can’t resist. Make it seem like they have the upper hand in this situation and make them feel like they’re getting the better profit. You may also see general partnership agreement templates.
The joint venture proposal should also cover structure and objectives of the venture, the financial contributions each one has to give, the responsibilities and processes to be followed in the whole partnership. It should also determine on who owns the intellectual property while the venture is effective. The liabilities, profits and losses are to be shared by each member of the venture as well. Lastly, there has to be a process of settling disputes between members and an exit strategy if it does not really work out anymore.
Let’s say you have a plan of making a joint venture with another businessman to extend your reach. The real question here is your readiness to take on the venture. For joint ventures to work, you have to execute every step flawlessly. Partnership is a tried and tested formula in business, and there’s nothing wrong against it. You may also see confirmation agreement templates.
But before jumping into a joint venture, ask yourself if you are ready for it. Joining in one surely brings a wave of changes in your business. The usual operations would be added and there is a need for more manpower. When joining a business venture, you would need to review your business strategy and revise some of them. It helps you aim better for your business.
Another thing to do before joining a venture is to look at how others perform in their businesses. You get to examine your own business and make a breakdown of its strengths and weaknesses. Look at the options for growth when you jump into a joint venture. You may also see sample agreement templates.
Choose your partner wisely in making joint ventures. Do a research on them and assess how their businesses perform in the market. You also need to know the reputation they have and if you can trust them with this venture. A breach of trust leads to a series of unfortunate events that will hurt the business badly. You have to know their work attitude when sharing the same goal with you. Are they with you every step of the way? You have to meet halfway with your potential partner in the business venture for you to carry out the tasks and achieve the goals in one go. Lastly, take their credit reputation into consideration. If they mishandle money in their businesses, chances are your venture will surely end up a big failure.
Make the venture work by communicating constantly. Coordinate well with each other when needed. Hold regular meetings to talk about the changes happening in the market. And if the venture is bound to end, talk about how the confidential information will be protected and who will benefit with the future income of the business. You also talk about how the shared intellectual property will be split. You may also see formation agreement templates.
At the bottom line of this, always prepare yourself for whatever happens when going into a business venture. It only ends up being successful or a major flop. Arm yourself with knowledge and preparedness since this is business. Money, trust, and time are invested to make it work the way it should. You may also see operating agreement templates.
Joining a business venture means risking a part of your business and benefiting from it at the same time. These two go side by side since a part of the business is being sacrificed and a whole new partnership is being made. Below are the benefits and risks commonly experienced in business ventures. You may also see development agreement templates.
Being in a joint venture opens access to new markets that you could possibly break in. you just need to improvise your product and see where it goes from there. With every new market, you can think of another product to make. It just takes rigorous brainstorming and hard work. You may also see business partnership agreement templates.
Business ventures increase the capacity of the business to produce more and the manpower it currently has goes up as well. As a result, work is more efficient, quick and easy to do. More people are working and more time is saved. You may also see partnership agreement templates.
More resources are added to your hands when you get into a business venture. You can use these resources in improving your current product. In addition to that, you can make new products with it. You may also see commission agreement templates.
Sometimes the members of the business venture have different objectives once they join forces. You have to know who to trust and settle your differences first. Agree on the set of goals that you set within yourselves and always adhere to that. The business is bound to fail if you don’t unite for one objective. You may also see investment contract templates.
Every person has different levels of expertise. Same goes for business. The members of the business venture have different levels of expertise and ways of running their business. Talk to them and come up with a uniform style of running the business. In this way, all of you have a say in how the business operates. You may also see development agreement templates.
Sometimes the leaders don’t meet on a certain day due to conflict of schedules. As a result, coordination is hard to find in times of crisis. Some leaders also don’t give their all-out support for the business venture since day one. You may also see construction agreement templates.
Business ventures exist for businessmen to reach a wider market. It is something that should be considered important and valuable since it benefits you and your partners. Whenever you decide to expand your simple business, always think of the good things you would get and how it would affect the future of your company.