joint venture marketing
A joint venture is a business enterprise by two or more persons or organizations that share resources, expenses and profits for a particular business project. As we have previously mentioned, a joint venture can be formal or informal. In the case of most small businesses, informal agreements are the most common.
How to Incorporate Joint Ventures into Your Business Plan
What are some practical ways to use the concept of joint venture marketing to benefit your business and that of the company you are partnering with? Begin by examining any area of your business that you would like to keep costs to a minimum, yet receive maximum return on investment.
One of the major areas I hear complaints about is the cost and return ratios with advertising. My suggestion to remedy this problem is to consider a joint venture agreement with another company to share the cost of advertising. You can accomplish this in many creative ways.
- Split the cost of advertising with your joint venture partner. For instance, a coffee shop and a hair salon located in the same building might decide to do a customer appreciation day to help drive additional traffic to both locations. In this instance, you and your marketing partner save money by splitting the cost of advertising while both companies receive the benefit of increased traffic and a lower cost for the ad, even though they have businesses that are not in the same industry.
- Co-op ad dollars with your suppliers. For example, a small heating and air conditioning company runs an ad that lists a particular brand of equipment. The supplier of that brand will pay for 80% of the advertising because they know the small company is promoting and servicing their product. The small business operator kicks in the other 20% and gains the exposure he needs in his community without all the out of pocket expense. It’s a winning combination because both companies benefit. Understand that it may take a while for you to build a relationship with your suppliers before they are willing to look at joint venturing with you, but taking the time to prove yourself is well worth the effort.
- Share available free advertising resources. Example, a small gas station joint ventured with a small car dealer. The car dealer placed vehicles for sale on the gas stations high traffic lot, and the gas station owner got exposure to the dealer’s customers for the mechanical services he had just begun offering through his station. The arrangement had no out of pocket expense for either business, but both of the owners report benefiting from the agreement.
There are many ways to creatively leverage the concept of joint venturing in business. Think win-win and create a scenario that works for you!
christian fea is CEO of Synertegic, Inc. A joint venture marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.
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