Understanding 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.
Whether you believe it or not, you can find companies that have added you as friend, following you or visited the same pages as you do which helps in developing fruitful relationship. Great care needs to be taken into mind when designing an drafting such agreement to be able to clarify who owns who.
At some point, it can be frustrating and tedious to locate the right partner. Just before you approach your prospective partner, it will be necessary to practice due diligence. Today, you can find numerous companies that publish their financial reports directly on their site which can be acquired through Registrar of Companies. You need to download the latest accounts and then review it or watch news to be able to know the status about your prospective joint venture partner.
You must make enticing offers w/ the JV partner in question and discuss the everything that is part of the deal from 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. 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. Long story short, you must learn everything about your partnership and agreement to make sure that things go according to plan.
The major reason as to why you have to form a joint venture partnership is often because of the support you will get from a high-profile partner who has the resources you need. 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. Well quite frankly, you are going to find more reasons why increasing number of entrepreneurs take JV into consideration.
Since all businesses have its weaknesses and strengths, it makes perfect sense to find JV to fill the weak spots. Because at the end of the day, joint venture is all about growth.
Attributed by: official website