joint venture marketing
Joint ventures are one of the most effective ways to build a small business. Unfortunately, many business owners enter into these strategic alliances without sufficient forethought and preparation, which sabotages the process almost before it even begins. To help ensure your joint venture efforts are a complete success, we have five steps to help you plan your partnership.
Know Your Market
The basic premise for a joint venture is to pinpoint all of your JV marketing efforts to a single target market. Before you can find a partner that shares your target market, you must know who that audience is. Begin by identifying your target market for your own business, so that you can hunt out another business owner with a similar market.
Choose Your Partner Wisely
Joint venture partners should offer a similar, but different, product or service from you, although the two should be somewhat compatible if the joint venture is to work. Do not rush into a joint venture with the first business you encounter that shows the slightest bit of interest in a relationship with you. Instead, hold out for the most complementary partner for your own business and needs.
Bring Your Contributions to the Table
Before you sign on for a joint venture, find out what each partner will be able to contribute to the partnership. Perhaps one has Internet marketing expertise, while the other is particularly adept at print brochures and marketing material. Maybe one has a larger customer list he would be willing to share in exchange for a portion of the profits.
Make a list of what each business will contribute, so everyone knows what the structure of the joint venture will look like.
Agree on Expectations and Responsibilities
It is also important to agree on the expectations each business has for the joint venture. Will you primarily be focusing on building a customer list, or will you be using cross sales to boost your bottom line? Will samples of products or services be provided to customers? What will each JV partner be responsible for to build the partnership to its fullest potential?
Answer these questions together before determining if you have the makings for an effective joint venture.
Make it Official
Once you have thoroughly discussed all the ins and outs of your upcoming joint venture, make it official by putting all the terms into a written contract. You can find joint venture templates online or talk to an attorney who specializes in these types of partnerships. The contract should also include an agreement on how joint venture profits should be allocated and an exit strategy for when the partnership is no longer profitable.
Proper preparation makes all the difference between a joint venture that is wildly successful – and one that falls flat before it even begins. When you follow these steps systematically and meticulously, you are much more likely to enter into a joint venture agreement that benefits all the businesses involved.
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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