Legal Tips to Keep in Mind for Joint Venture Partners

Joint venture marketing is just as it sounds, the involvement of two or more businesses or entities partnering up in order to build up a solid base of customers and to profit. It then becomes a legal organization. However, instead of a partnership being formed for the purpose of individual profits or gains, the joint venture may be formed for the intention of developing a product, marketing strategy or intellectual property (the mind’s creations such as inventions, symbols, works of art and/or name and images used in commerce).  The two categories that it breaks down into are: Industrial Property (industrial designs, trademarks, geographical indications and patents for inventions) and Copyright (all literary works, musical works, films and all artistic works. Copyright also includes all involved in the artistic such as performing artists, broadcasters and producers).

A contract protects the partners of a JV marketing agreement

As with any agreement, a contract is drawn up to protect all parties involved and to lay out certain stipulations. This is effective in that each business understands their responsibility, their rights and their expected participation in the agreement. There are many points to consider when entering into a contractual agreement because whether the partnership is short or long term, there are key elements that should be enforced or included in the agreement.

Key components of a joint venture marketing contract

To protect all parties involved, key considerations often included in a Joint Venture contract are: assignment, amendments, confidentiality, dispute resolution, dissolution, governing law, indemnification and intellectual property. The contract could also include the bookkeeping and records, mission statement, bank accounts, capital contributions, division of profits and losses, place of business, management duties, expenses, term and termination and other business interests.

Each of the topics mentioned above could be a subsection in the contractual agreement between the participating joint venture partners. When the agreement is broken down into sections, you can see the legal implications and obligations that would fall into each separate category. Detailing each section legally, with mutual consent, this signed document will become a binding contract that can be upheld in a court of law if necessary. Contracts, state partnership and commercial transaction laws govern joint ventures in the United States. The partnership is also responsible for federal income tax. If foreign countries are involved in the joint venture agreement, the parties are also subject to the laws that are in place within those countries, as well as the international trade laws.

The key details of the joint venture marketing agreement

Compensation, partner shares, and income should also be determined on the agreement, so that no discrepancies will occur. When these clauses are included (whichever ones you choose from the list above) and rules or guidelines are written in each section, the joint venture marketing agreement becomes legally binding once all parties involved sign it. Business must always be separated from personal feelings and attachments. Meetings should be held between the involved parties to discuss what the expectations of each are. All parties should be involved in discussing and contributing to the terms set in the agreement.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

Talking Points You Need to Know Before Forming a Joint Venture

There are many situations in the diverse world of business today that justify the need to enter into a joint venture marketing partnership. After hearing about joint venture marketing, someone might be excited about having their business transformed by creating an alliance with another successful and related business. However, the business world is full of rough-and-tumble personalities which will require you to tread cautiously in order to function efficiently and avoid getting the short end of the stick so to speak when it comes to a JV agreement. Here are several key points you cannot afford to ignore before entering a joint venture partnership.

Do the companies complement each other?

First of all, the potential partners should deliver a product and/or service that complements or at the very least is related to both companies. Obviously you’ll want to avoid partnering with a business that competes directly with your company’s products or services. Offering complimentary products or services in your new joint venture will go a long way to make the partnership a successful one. For example, home décor products would go well with a company that provides consumer electronics.

Does your potential JV partner have a compatible strategy?

The scope of the other partner’s strategy should not clash with yours. If you have a long-term plan in mind, it wouldn’t make sense to partner with a company that’s only in the market for the summer. Keep in mind the scope of your combined strategy will also influence things such as marketing plans, employee recruitment and training, and other short-term goals you may have for your business. Additionally, the combined strategy, whether it’s capital intensive or labor intensive will depend on the size of the businesses involved.

Another factor to take into consideration when reviewing whether or not you and your potential partner’s strategies are compatible is each company’s timeline. Know how soon the other partner plans to do some crucial tasks. Know how often they borrow or pay off loans. Without time lines, a business is just drifting with the current, lunging at any piece of business that drifts downstream. This is clearly not how a profitable business should operate. It’s also wise to crosscheck what customer base the other business already boasts. What quality is there and what room for improvement exists?

Is your potential JV partner financially sound?

Finally, the capital base that exists should be given top priority at the outset. Can you picture entering into a joint venture marketing agreement with a company that is going to declare bankruptcy tomorrow? Often, the integrity of both partners to the businesses will take a beating if one of the two declares that he cannot meet financial obligations. It’s highly recommended to have an attorney draft up an agreement to clearly outline which obligations, whether financial or otherwise, will be handled by which partner. That way, it’s not one person holding the reins of the agreement. The golden rule is being willing to treat the other partner’s business as if it were your own.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

Joint Ventures: Pros and Cons for a Small Company Working with a Large Company

When deciding whether it’s the right move for your company to enter into a joint venture project there are many things to consider. When two companies of about the same size enter into a JV marketing project, it is much safer for both parties. However, when a very small company is approached by a large company to team up, there are different risks and benefits they’ll need to consider that two companies of the same size do not have to think about.

The opportunity for a small company to join with a large company on a joint venture marketing project presents the small company with many benefits that it might not be able to acquire otherwise. The larger company’s revenue is going to naturally be more than the smaller company’s intake, making it possible for the smaller company to make a great deal of money on the venture. The large company would not be interested in the project if it was not going to make enough money to be worth their wild, meaning that a successful venture will result in a large amount of revenue for both companies. While the larger company would be able to make that amount of money in other fashions, the smaller company would not, making profit the number one advantage for a smaller company to work together with a larger one.

A joint venture marketing project also presents the smaller company with the opportunity to expand its business. There is a good chance that by completing the project, the smaller company will learn skills that will aid in the expansion of the business. The small business may also be put in contact with other businesses through the venture that it would not have otherwise had contact with. This could also aid in the expansion of a small business.

However, there are also risks involved when a small company decides to work with a larger company. While a larger company would be able to go weeks, or even months, without seeing any profit from the venture, a small company would not be able to easily survive that long without getting paid. Also, unless the larger company agrees to pay for more of the project than the smaller company, it will be a very expensive venture for the smaller company. Even if the revenue at the end of the venture is great, the smaller company might not be able to survive until the end. Because of this, detailed time lines are essential when companies of two different sizes team up together. The project usually needs to be completed in a short stretch of time so that the smaller company is not injured.

It is also possible that the larger company will completely absorb the smaller company. This could be an advantage or a disadvantage. Some small businesses do not want to join larger ones, but instead prefer to remain small. However, if a small company is looking to become part of a larger business permanently, then it is possible a joint venture marketing project with a larger company will ultimately result in this.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

The Players in a Joint Venture Marketing Team

The amount of people who will participate in a joint venture project depends on both the size of the companies and the size of the project that is being attempted. For two very small businesses it might be as simple as two company owners meeting together to discuss their plans. Usually, however, the team structure is more complex.

The governing body

It is common practice for both companies to have an equal number of representatives participating on the project. This way neither company feels as though it’s at a disadvantage. This governing body will protect the interests of all involved in the project. While they will have loyalties to their own company, their primary goal is to see that the project is completed fairly and successfully. The greater the size of the company, the larger the team can be. It is important that there are enough people who are part of the governing body to get the project done according to the projected time line, but it’s also important that the companies do not pull too many people away from their regular responsibilities. While the joint venture marketing project is important, it’s also important that the rest of the business continues to function effectively. It is not uncommon for companies to hire new people just to make sure that the business does not suffer.

The management team

It is also customary for there to be a management team. These people will be given the task of overseeing individual aspects of the project. Dividing the work load up allows for more personal attention to be paid to every aspect. These people are often supervisors or managers from their respective companies. They work hand-in-hand with the governing body; overseeing tasks that have been divided up and assigned for completion. It’s important that the company be able to keep the people in their group on task at all times while being able to add creative insight to the project. Oftentimes their jobs are more difficult because in addition to being part of the management team for the project, they are also still required to effectively do their job as supervisor or manager for the rest of the business.

The financial team

There is usually a financial team as well. As the investment of most joint venture marketing projects can be quite high, the job of the financial team is to keep all of the finances in order and try to keep the cost of the project within the projected budget. They research the best deals on anything that needs to be purchased and calculate the projected revenue for each aspect of the project. The more ways they can find to make and save money, the more successful the project will be. They also have the task of making sure the cost of the project is divided up between the two companies in the way initially agreed upon. Because of this it is very important that there are an equal number of people from both companies represented on the financial team. Neither company wants to feel that it is at a financial disadvantage for any reason.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

Joint Venture Agreement: A Separate Company or Contract

Sometimes the goal of a joint venture marketing project is to create an entirely new brand or type of technology. Since this is an expensive venture that requires many different types of resources, JV marketing agreements are usually a great way to accomplish this goal. However, there are many aspects that need to be considered when doing this. The main decision that needs to be agreed upon by both companies is whether they are going to remain two separate entities marketing a shared product, or if they’re going to come together and create an entirely new company and market it under a different name.

To Merge or Not

If the two businesses joining together already have established reputations, the best option might be to remain as two separate companies. The company names already have brand awareness and will sell the product more successfully than a new name. Including both well-known and established names on the product could increase its credibility even more.

However, it is possible that the companies will feel that the product will sell more successfully under a different name. This is the case when the product being created is not one that’s usually sold by either business. Giving the new joint venture its own name will allow it to build its own reputation. In this case, it makes sense for the companies to join together and create a new company under a third name.

When two businesses considering a joint venture don’t have well-established reputations in the market, creating a new company may prove more beneficial. If one or both of the companies have gained negative reputations for any reason, omitting their respective names on the new product or service will probably serve as a better choice. If the company names are simply not well-known, having a new name will not hurt the marketing campaign. This way the new joint venture name will have an opportunity to build its own reputation.

Nevertheless, if it’s believed that the product or service will enjoy great success, it might also be decided that using the individual company names instead of a new name might be better. This way both of the companies will receive publicity for the new product, increasing their individual reputations.

Consider the risks of the forming a new company

There are risks regardless of whether the companies involved in the project decide to join together as a new company or remain individual companies. As a brand new company, the name will not be known on the market, which has the potential to hurt the marketing of the product. However, keeping the original company names has risks as well. If one of the companies is more well-known than the other, they might receive all the credit for the product’s creation by the public. But if one of the companies has a negative reputation then the other company’s reputation could be hurt by it. Before making any decisions on the matter, there are a lot of factors that need to be considered.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

Legal Advice for Joint Venture Marketing

Like almost any business venture, legal advice is generally used when forming a joint venture marketing agreement. This is the wisest way to go to protect the company’s assets in the event the business venture is not successful. While a well-planned out venture generally has no reason that it should fail, it is always important to protect the company. On the rare occasion that two businesses are only going to interact for a very short period of time and there are not any high risks involved with the project, then legal council is probably not necessary. For the vast majority of joint business marketing ventures, however, it is wise to include legal advice.

Choosing an attorney

Selecting an attorney for the joint business marketing project can be a difficult process. The company that initially comes up with the plan will probably want legal advice to help them draw up the outline for the project. However, it is not a good idea to approach the other company under the assumption that the project only needs one attorney. The offer for the other company to have its own legal council should always be extended. This way the second company doesn’t need to fear they’re going to somehow be tricked. The second option would be for neither company to use their own company’s legal counsel, but instead hire outside, impartial legal advice. This way the cost of the attorney could be split without one party being unfairly represented. However, hiring an outside attorney will increase the cost of the project. If both companies already have their own attorney, then that is usually the best option to choose.

The most important stage of any joint venture is to have legal counsel present when both parties sit down to draw up the plans for their project. When making agreements such as which company is going to pay for what and how much revenue each company will earn, it’s very important to have binding legal contracts that cannot result in an unfair advantage to one party or the other. If both parties are sharing the cost of legal counsel, then it is obviously only necessary for the one attorney to look the plan over. If each party decides to have its own attorney, however, it is important that both companies’ legal counsel look over the plan and that they both agree that it will work.

After the initial plan has been approved by both companies and the legal counsel, it is up to the individual businesses to decide whether they wish to keep the legal advice on board for the rest of the project. Obviously if both parties are using company attorneys, then it only makes sense to keep them on hand. However, if both parties are comfortable with dismissing the legal counsel after the plans for the business venture have been agreed upon, then doing so will save both companies money. In the end, the most important thing with legal advice is that both parties feel comfortable with the situations they are agreeing upon and that both companies’ assets are protected.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

Joint Venture Marketing – What is the Goal?

When considering joint venture marketing the first question you should ask is what is the goal? Working with the competition does not seem as if it would be a wise business decision, but there are many situations where two different businesses teaming up together can result in good outcomes for both parties. A joint venture is when two businesses do just this – team up together for a decided amount of time, possibly creating a new entity with its own assets and share the revenue that results from the project. The goal of a joint venture marketing project is for two businesses to accomplish something that they ordinarily could not do by themselves.

Kicking off the joint venture marketing plan

The first step to this process can often be very difficult. The company that comes up with the idea has to be able to explain to the other company why it would be a good idea for the two of them to team up together. A plan created where only one company benefits won’t work because the other business will not see the benefit. Both sides have to see how the joint venture would be beneficial to them. The benefits that each party will be receiving do not necessarily have to be the same, but they do have to be important enough to convince the other business that it would be more beneficial for them to team up than not to.

After both parties are in agreement to work together, have clear plans drawn up of what they are going to do. It needs to be decided which employees from each business will be working on the project. Situations such as whose office the participating workers are going to meet at need to be addressed. If one company has better technology for one aspect of the venture, but the other company has something else that will benefit the project, then it is probably a wise choice to use both locations depending on what is being worked upon on a given day.

The finances of the joint venture marketing plan

One of the most important things to decide is how the expenses will be split. Since the cost of starting a new business venture is usually quite high, teaming up with another business is a great way to make it more affordable for everyone. Also, the partners need to decide how the profits are going to be divided up in the end. If one party is doing more work than the other, it might be decided that they will receive a greater percentage of the profit. In most situations, however, the best thing to do it split the profit evenly.

Wrapping up the joint venture marketing game plan

Depending on the goals of the joint venture marketing project, the amount of time that the parties will work together will vary. Some objectives can be reached in less than a week, while some companies remain partners for years to reach their goals. If the venture goes well, it is a wise idea to stay on good terms with the other party even after the project is over. This way, if another situation arises in the future that both parties could benefit from, the other party is more likely to agree.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

Effectively Negotiating a Joint Venture Marketing Agreement

After you’ve decided to enter into a joint venture and found a potential partner, the next step is the negotiation. “Give and take” is important to understand in the negotiation process; without it a successful agreement cannot be made. The power of a joint venture is only as strong as the negotiation behind it.

Tips for Effective Negotiations

Face-to-face interaction and tactics are key factors in a successful negotiation. Equally important is the proper layout and preparation of goals, benefits and risks of the venture. Keep in mind that in any successful negotiation, both parties walk away feeling they will benefit from the arrangement.

Perform extensive research on the type of business you’re preparing to negotiate with. If possible find out what problems they have and what their profit margins and resources are. Use the Internet as a research tool, read industry publications and talk to the company’s customers or employees. This research will help you be more effective in the negotiation process.

Learning everything you can about your potential partner is important, but being prepared to offer important information about your business is also important. Outlining the benefits of entering into a venture with your company for your potential partner as well as discussing what you hope to gain from the venture is a good strategy for negotiations.

Speaking of “give and take,” you should go into the negotiation process prepared to compromise. You should have the best- and worst-case scenarios along with the benefits of each case. As you begin the process, start off with the best outcome you hope for first. As the negotiation process matures, prepare to compromise, but do not lower your standards.

By leveraging existing resources instead of creating new ones, this will help both parties keep costs down as much as possible. If the venture does not work out as planned, both partners will not lose if they use their combined resources. Also pooling your resources can be an effective way to deal with each other’s shortcomings; what one company lacks the other company excels in.

Some other helpful tips are honesty and transparency between partners. Starting your venture on the right foot will ensure the longevity of the partnership. Regular contact with your partner is essential in making sure your current arrangement is going as planned and making adjustments as needed. Effective ventures are essential in business growth, profit increase and growing the customer base.

Put it in Writing

All successful negotiations end in writing a contract. The contract needs to include the overall goal for the joint venture, a timeline for the venture and the benefits each partner hopes to gain from the agreement. If a timeline is not solid, put a date down to revisit the JV partnership. Also include all fallback options. In the event the partnership does not work, both parties can make a clean break. A well-prepared contract is paramount. Each party should think about hiring a legal representative to help protect you and your potential partner’s interests.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

Defining the Relationship in a Joint Venture Marketing Plan

Business is all about developing relationships and forming partnerships to get your business off the ground. A poorly planned joint venture is destined to fail from the very start. One way to ensure this doesn’t happen is to create a joint venture agreement that is aligned with the goals of your JV.

Reciprocal

Reciprocity is very simple. If you’re good to your partner and create revenue for them, they’ll want to reciprocate. The referral mechanism for a reciprocal agreement could be as easy as displaying your partner’s business cards or adding its logo to your marketing materials. You are basically saying you give your partner’s company your stamp of approval. Think about how your pediatrician can recommend a good nutritionist for your kids, or how many Wal-Mart locations have a McDonald’s inside the store; this is reciprocity at work.

In mid-July, American Airlines, British Airways and Iberia were finally able to announce their joint venture. The European Commission had approved their partnership which allowed them to expand their code sharing. The companies were able to sell their partners’ flights under their own name and flight number. This venture gives American Airlines more cities to sell flights to and from Europe.  British Airways and Iberia would be able to use American Airlines extensive network in Canada, Mexico, the United States and South America. This is an example of a multi-national company successfully designing a reciprocal relationship that should fit the needs of both organizations. However, small local companies can do the same.

Profit Sharing

Profit sharing also means risk sharing. When you decide to choose a profit sharing joint venture, you’re also agreeing to share half the risk and half the potential losses. To avoid confusion the contract must clearly state that both companies are equal partners. All profits, risks and loses are shared equally between you and your joint venture partners.

Delta Airlines and Air France/KLM put together a $12 million per year profit-sharing venture which would allow the companies to become a single carrier on North Atlantic routes. This offer also extends to a previous venture between Northwest and KLM which has been in place since 1997. This is the most advanced model of successful international of airline cooperation. The benefit to customers and the businesses are paramount. Where can you form a joint venture marketing agreement with a local partner that will answer the needs of your customers?

The Best of Both Worlds

Recently SkyWest and Virgin Blue Group signed a 10-year joint venture agreement which will provide Australia with up to 18 Virgin Blue-branded aircraft. This venture makes it possible for SkyWest and Virgin Blue to operate at a number of existing and new destinations in Australia.

If both reciprocal and profit-sharing agreements seem like a good option for your business, you’re in luck because a joint venture marketing agreement is completely customizable. All you have to do is put what you want in writing to be presented to your potential partner at negotiations. You may have to make some compromises, but that’s the case in most business partnerships.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

In Joint Venture Marketing the Who and What Remain Important

Since the late 1800s, joint ventures have been a common practice for businesses. The railroad industry was the first to make use of this strategy to expand its reach and profits. By the middle of the 20^th century, the manufacturing industry was dominated by joint ventures. Today they are wide spread and used in almost all types of business. To successfully develop a joint venture marketing relationship it’s important to identify your target market and the goals for your joint venture.

Target Audience

Before starting negotiations and well before you sign the agreement contract, you need to ask yourself; “who is my target market”. To make a joint venture successful, both partners should have similar target markets but not exactly the same, as you’ll want each company to be able to expand the reach and profits of their business.

According to a July 25^th 2011 press release, the Dow Chemical Co. and the Saudi Arabian Oil Co. announced their plans to proceed with plans to build a $20 million chemical complex. The new venture, Sadara Chemical Co. now promises to be the largest chemical facility ever built to date. Separately these two companies reach millions and earn significant profits but together they substantially expand their resources and increase efficiency making them even more profitable.

Reaching the Audience

With your target market identified, take some time to get to know each other. Do not assume you know your potential customer. Assumptions will only lead to misplaced advertising, promotions and pricing that may not reach your target market. By asking consumers simple questions, you can find out useful and important information. Have your customers fill out short surveys with demographic data and offer a coupon or discount for completing the survey.

Venture Goals

The ultimate goal of any joint venture is to generate more revenue without having to spend more money on advertising, research and product development. Other goals for your JV might be, expanding your target market to include consumers who were previously unaware of your products or services or maybe you envision taking your business globally for cheaper manufacturing and development by combining resources with your JV partner to form a new business.

Omega Navigation Enterprises Inc., an international provider of marine transportation developed a partnership with Topely Corporation to form a joint venture company named Megacore Shipping. The two companies bring what they do best to the relationship, while helping each other in ways that traditionally cost them more money than their areas of expertise. Sharing resources and industry knowledge through a joint venture is one way even small businesses can boost their bottom line with the right marketing partnership.

Profits and Cost

At the bottom line of any business venture, big or small is revenue. Companies join forces to improve their bottom line without taking a big bite out of their profits. A joint venture offers the ability to make more and spend less for everyone involved, whether they are large and well-established corporations or small businesses just starting out. If executed properly, both companies will increase their revenue more so than they ever could on their own.

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.

To discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.