joint venture marketing
Joint ventures are a highly effective way for small businesses to explode their profits, but only when they are entered into wisely and with some caution. With proper planning, these partnerships can exponentially increase your customer list and your bottom line. Without it, joint ventures can quickly transform into burdens that bring few benefits and are hard to get out of.
To help you avoid the latter scenario, we have listed five common stumbling blocks to joint ventures that you should avoid.
Too Little Research
It’s important to learn everything you can about a potential JV partner, including their performance history, reputation in the industry and financial stability. You will also want to find out what their goals might be for the joint venture to ensure you’re both on the same page in your partnership. Taking the time to do the research up front will usually pay big dividends in the long run.
Not Enough Honesty
Both prospective partners need to be up front about their reasons for entering into the joint venture. They also need to be honest about how much time, money and talent they are able to bring to the joint venture table. If you feel at any time during the negotiation process that your prospective JV partner is not completely forthcoming with you, it may be time to cut your losses and search for a more honest working relationship.
Breaking Client Confidentiality
Many companies enter into a joint venture a little too enthusiastically, and they offer client information before it is really theirs to share. Before you hand over a client list, make sure you are not breaching any confidentiality agreements you have with your customers. It also warrants careful thought before turning over a list that you probably worked very hard to build. Proceed slowly and cautiously when sharing customer information with a JV partner.
Offering Too Much or Too Little
Some companies are so eager to get another business to say yes to a joint venture that they offer much more than they should in terms of customer lists or profits. By the same token, other business owners are too stingy with their joint venture offers, turning many potentially lucrative partners off completely. Your joint venture offer should be large enough to be enticing, but not so large that you end up taking a hit in your bottom line just to secure the JV partnership.
Neglecting an Exit Strategy
Even good things must eventually come to an end, and this is particularly true of joint ventures. The time to think of your exit strategy is before you sign your agreement in the first place, not after you are trapped in an unprofitable agreement indefinitely. Add the exit strategy to your contract, and you will always have an out if your arrangement begins to go south.
Joint ventures have become so popular today because they are a highly effective method for boosting customer lists and profits. With a little thought and preparation, you can enter into a JV partnership that will be lucrative for all partners involved in the arrangement.
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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