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. By doing this, it will actually help you to save valuable time and money by finding a partner through social media, in an existing customer, supplier or investor.
As a matter of fact, in social media, you can find companies that follow you, added you as a friend or visited same pages as you do can help in forming fruitful partnership. But in order to establish who owns who, it will be critical to design and draft an agreement that thoroughly discusses these things.
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. Today, you can find numerous companies that publish their financial reports directly on their site which can be acquired through 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.
It is essential that you make offers that will entice your prospective JV partner and be able to talk about every single thing included in the deal from customers, intellectual property rights, finance, legal issues and so on. When you create a draft proposal, make it a point that you clearly state what your objective and aims are. Say for example that the prospective partner is pleased with your offer, you can now proceed to the next step which is creating an agreement that consist of the following details: exit strategy in the future, makeup management team, investment and stake of every party and legal status of the JV. 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 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. There are basically more reasons you can find why numerous people are now considering JV.
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.