Building Business Partnerships Top 5 to Do’s

As a small business owner or business development executive there are several things to remember to do when establishing new joint venture marketing business partnerships. The following is a list of critical items to be conscious of when building business partnerships that will make sure your business finds the right partners and mutually beneficial business deals that maximize the opportunities and results in growing your company. All business partnerships have their positive and negatives, however as a business executive it is critical that you understand the risks and areas to focus on to reduce small problems from turning into deal killers.

Top 5 To Do’s When Building Business Partnerships

1. Research – It is nearly impossible to build successful business partnership without doing a considerable amount of market research and analyzing the business of potential partners. Failing to adequately understand a prospective partner can only lead to future problems. This could be something as straightforward as not having access to the right client base or simply being a mismatch culturally. Therefore it is absolutely necessary to spend the time and resources to research the opportunity fully.

2. Examine Customer Base – Before finalizing a partnership that promises to give your brand or products access to new customers, request customer demographic data and information on a couple of their key customers that can be cross referenced.

3. Meet in Person – In-person meetings with the executive management of the potential business partner is always better. While most communication can occur in the traditional forms of email and phone calls, it is best to ask for an in-person meeting very early on in the process when determining whether a business is a good candidate for a partnership.

4. Develop Performance Based Incentives – Depending on the nature of the business partnership that you’re creating, compensation can come in many different forms. Packages that include revenue shares and/or bonuses will ultimately reap more rewards compared to partnerships that do not include performance based incentives for growing the partnership. Be sure to include methods for compensating specific team members as some will be capable of selling more than their peers. You may also want to offer bonus incentives to the sales team as a whole for their combined efforts.

5. Hire Experts to Eliminate Errors – Small business owners need support in executing successful partnerships and maintaining focus on existing customers and product development. Enlisting outside support will ensure the partnership is built properly. Hire a lawyer that can provide a partnership template that can be used for drafting the agreement between the two companies. Using a template will reduce legal fees when forming future partnerships simply by having a lawyer finalize and sign off on any adjustments to the template with each new partner.

You may also want to find a business consultant that specializes in joint venture marketing partnerships. These consultants will save you valuable time by identifying new partners and making first contact. Hire the right consultant and you can get your foot in the door with your dream business partners and have their expertise at your disposal required to draft a partnership agreement that will ensure a profitable business relationship.

Keep these ideas in mind the next time you are in charge of building a business partnership and you will be much more likely to align with the right partner, in a mutually beneficial relationship that can be put together in a relatively quick time frame.

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.

Discover more Joint Venture Marketing Strategies join his free report on Joint Venture Marketing.

Joint Venture Risks To Be Prepared For

Regardless, if this is your first joint venture marketing relationship or fiftieth already in place there are several items that are important to be aware of to minimize the risks that may jeopardize your existing business operations. When announcing a new joint venture make sure that potential problems with customers have been identified so they can be resolved asap. Keep a good line of communication with decision makers from the partner company to ensure fast resolution to any problems can be communicated to all key individuals responsible for handling the partnership. Understand the way your partner company operates and develop relationships with the key individuals that need to be on board in order for the relationship to be successful.

Customer Problems

Identifying where there may be a potential customer problem is the number one joint venture risk, if someone does not perform, an existing customer could potentially be lost. If this occurs because of how a partner serviced the customers’ needs and acted during the process than it’s a poor reflection on both companies and harms both businesses. As soon as a business makes a recommendation they are also responsible in the consumers’ minds for their experience with the partner business. If they get turned off by their actions they may quickly take their business elsewhere altogether. The best thing is to make sure and do a blind test with a new partner so you are 100% confident of how the new partner will be receiving and servicing the clients referred over. If only quality partners are brought into the business model and they fit in terms of industry and customer bases then there should not be problems with customer interactions or any confusion among customers as to what is the purpose of the new joint venture.

Communication Failures

Setting up a new joint venture is usually the easiest part of the whole marketing strategy, however failing to be properly communicate while implementing everything required is a significant risk. If a business is not fully capable of honoring the details in the joint venture agreement it is not worth moving forward with the marketing partnership. It is absolutely mandatory that both parties have clear and open communication channels with the individuals that are directly controlling the process from receiving a new business lead, selling, and then servicing the customer’s needs. To eliminate risks it is vital that communication channels are clearly defined and counterparts from both companies communicate regularly.

If there is a communication breakdown between joint venture companies when both are servicing a company and they need to work together in order to meet deadlines on a project it can be catastrophic to the relationship quickly. Other communication failures that often occur are failing to follow each item in the JV agreement from things as simple to not sending an approval email before going to print with marketing collateral to as severe as not properly reporting all sales transactions as determined in the agreement. Failure to communicate according to everyone’s expectations is a big reason many joint ventures eventually stop working or fail to get going after the initial agreement is put in place.

Internal Company Issues

It is vital when assessing potential risks that are present with a new joint venture marketing partner to learn about the company’s culture, decision making process, and who the real catalysts and decision makers are within a company or division. Failing to know who is really making the decisions regarding supporting a joint venture is a major risk. When developing a significant JV marketing relationship it can be vital to wine and dine decision makers as well as people that are potential gate keepers to those decision makers. When everyone in a company is supporting a new joint venture the chance for failure is reduced. It is a significant risk to do a joint venture if only one or two people are on board with the partnership for whatever internal reasons and success will involve more than the one or two that are committed.

Develop strong relationships with the individuals participating in a joint venture to ensure you have great communication and fully understand the purpose of the JV from the other company’s perspective and you will reduce your joint venture risks and be more at ease entering a new business relationship.

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 Using Joint Venture Marketing to Grow Your Business

During the 1950s, Simplot researchers developed a method to freeze french fries, and the new engine that would propel the J.R. Simplot Company’s growth. Simplot, once a very small business with only a potatoes sorter, made great gains in the 1960s. During that decade, the company developed a partnership with Ray Kroc, a fast-food operator who became the single most important person in Simplot’s business dealings. The fast-food chain Kroc founded was none other than McDonald’s, which had a nearly insatiable need for the frozen french fries first developed by the J.R. Simplot Company a decade earlier. Simplot would go on to become the single largest supplier of frozen french fries to the massive hamburger chain.

Right Partner with the Right Connections

Having the right partner in a joint venture can effectively grow your business. If your company partners with another company that has a diversified consumer base than your own, you will able to beat your competition by selling to a larger target audience. You may be able to use your venture partner’s customer database to market your product, or offer your partner’s services and products to your existing customers. Your company can exchange endorsements with your partners companies, which will be featured in newspapers, on the Internet or on television. When entering into a joint venture marketing agreement with a reputable company, you will add more credibility to your business and gain potential customers’ trust in your company and products or services.

Building on their success in the past with join ventures, in July 2009, the J. R. Simplot Company and Agri-Trend Data Corp. announced a new joint-venture company called U.S. Agri-Data Solutions LLC (USADS) to deliver their proprietary Agri-Data Solution NetWare platform to agricultural producers and processors in the United States.

Shared Expenses, Greater Profit

Joint ventures often enable growth without having to borrow funds or to look for outside investors. When having a partner to share expenses with it will help your business grow faster, increase productivity and generate greater profits. A successful joint venture can offer access to new markets and distribution network, increase capacity, sharing of risks and costs with a partner.

In 2003, the Simplot opened a new state-of-the-art French fry plant in Manitoba in order to capitalize on the economic advantages the region had to offer, including the lucrative exchange rate between the U.S. and Canadian dollars.

Better Research and Development

An effective joint venture allows access to better research and development because the two companies can pool their resources in those areas which means less outsourcing while still enjoying a significant reduction in expenses. When developing a product or marketing and existing product, research and time put into a product means a better product. Better product development means your company will not have as many returns of the product from retailers or customers, in short more profit for your venture.

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.