Everything You Must Know About Joint Venture
While a joint venture promotes productivity and growth, finding the right partner is what matters most to enjoy success. It is integral to conduct thorough research to be able to do this and due diligence at the same time. With this, you can save money and time by working with people who are already your customer, supplier, investor or with someone whom you’ve met socially.
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. 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. You have to download the latest accounts and review it or watch news in order to learn the latest stories regarding your prospective 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. Long story short, you must learn everything about your partnership and agreement to make sure that things go according to plan.
The primary reasons why you want to form joint venture partnership is that, you want support of a high profile partner who has got the resources you need for continuous growth. This might be a huge mailing list that could get significant exposure for your products fast or the proposed partner is running a forum and can help in advertising your product by putting up a banner. Basically, there are more reasons that you can find why many people are considering JV.
It totally makes sense to locate a JV that is capable of filling in the weak spots of your business. Because no matter what you do, entering JV is focused about growth.