Due Diligence in a Joint Venture

When you enter into a professional partnership with another company, it’s important to make sure that business is the type of entity you can trust and work with effectively. Joint ventures are the ultimate business relationship, uniting two or more companies for the purpose of marketing, increasing a targeted customer base and building profits.

If you want your joint venture to be successful, you must thoroughly evaluate your potential partner before entering into a professional relationship with them.

What is Due Diligence?

Due diligence is a process that is used to thoroughly research a business you’re considering for a joint venture. It may involve a number of steps, including legal obligations, research and investigations into a company.

It’s typically used by venture capitalists considering an investment into a startup company. However, it is also an essential process for anyone who is considering a partnership with another individual or business and wants to ensure that union is a success.

What is Included?

When you begin the due diligence process with a potential JV partner, there are a number of documents to research:

• Corporate records
• Financial information
• Background checks of business and owner
• Contingent liabilities
• Business plan
• Sales and marketing records

While this is a fairly comprehensive list, it is by no means exhaustive. For example, if your purpose is to ride the coattails of a larger, more established business; take some time reading online reviews of the company, its service, and the products it provides. The last thing you want to do is enter into a partnership with a company that has a poor reputation with the general public.

In addition to reviewing a company’s business plan; find out what the company expects from the joint venture you’re looking to start. Ask potential partners what their intentions are for the joint venture to ensure you’re both on the same page with the terms and benefits. Find out what types of marketing strategies the company has used in the past and which advertising tools they are most comfortable with to compare with your own advertising strategies.

It’s important to note that in the case of venture capitalists, the large majority of potential relationships that are investigated do not make it to the final contract signing. Issues may arise through the due diligence process that give pause to those ready to invest their money into other businesses. The same might be true for joint ventures that are properly vetted, but this should provide peace of mind in knowing the companies that do pass muster would be more likely to provide a mutually beneficial partnership.

Using due diligence to properly research potential JV partners is an important step in any successful arrangement. Keep in mind that your joint venture may be designed to go on for some time and involve a multitude of marketing strategies and shared financial arrangements. When you take the time to thoroughly investigate a company before agreeing to a professional relationship, you are less likely to face unpleasant surprises throughout your partnership.

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.

5 Questions to Discuss before Setting up a Joint Venture

A joint venture is an excellent way to escalate profits with little upfront cost as long as the joint venture agreement you create is a beneficial one. Unfortunately, too many joint ventures begin without adequate thought or preparation, leaving them floundering dismally in no time at all.

To help you and your JV partner set yourselves up for success, we have five questions to discuss before anyone signs on the bottom line.

Who is Your Partner?

You may think you know a potential partner well enough, but until you have performed a thorough background check, you should avoid any sort of formal agreement. Find out if your potential partner has any type of criminal record, individually or in his business dealings.

While most business owners are on the up-and-up, those who are not just might be looking for a joint venture to legitimize their own company.

Who is Your Customer Base?

Joint ventures are most successful between businesses that offer related products that are not in direct competition with one another. This ensures you are catering to a similar target audience and that the advertising dollars you put into the joint venture benefit both partners equally.

Take the time to fully analyze the customer base of both businesses. You want to know that the target audience is similar enough for the venture to be successful.

What are Your Goals?

Joint ventures may come with different goals each partner is hoping to achieve. This could make it difficult to define success in the relationship. Ask a potential partner what he wants most out of his business, and what he plans to do to achieve it. Make a list of what each of you hope to get out of the joint venture. Look for similar goals up front before launching into an agreement.

What are the Rules?

Nobody likes to talk about rules; they squash creativity and limit the scope of the endeavor. However, rules are absolutely necessary in a joint venture to ensure the interests of both parties are adequately protected.

The rules to which you agree for your joint venture should be clearly spelled out in a written contract. If you aren’t sure what the rules should be, talk to an attorney that specializes in the specifics of a JV.

How Long Will it Last?

Some joint ventures are open-ended, while others have a set date to disband. Even if you don’t want to put an end date, it’s a good idea to set a date when you will review your partnership and determine whether it should continue at that time. By creating a definite time frame, you avoid a problem with one partner wanting out while the other is still benefiting from the agreement.

Joint ventures are highly successful methods for growing businesses, as long as they are used with the best interests of both companies in mind. By taking time to establish the parameters of your agreement up front, there will be fewer misunderstandings and a greater likelihood of success.

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.

Intellectual Property and Joint Ventures

No matter what type of joint venture you’re interested in forming, intellectual property will probably be a factor to consider in your contract. Intellectual property can be defined as creations of the mind that deserve protection under the law and may include musical and literary works as well as inventions and designs.

Whether you are bringing intellectual property to the table when you form your joint venture, or plan to produce intellectual property in the course of your partnership, it’s important to understand how to protect your rights as well as the rights of your JV partner.

Methods of Protecting Intellectual Property

There are a variety of ways to protect your intellectual property, depending on the specific type of property you are concerned about. Some of the methods include:

• Patents – Different patents are used to protect inventions for up to 20 years, depending on the type of invention and what you specifically want to protect.

• Copyrights – These are used to protect literary works, as well as any other type of authored work, including music and tangible works of art, and typically protect the work during the life of the author and for 50 years afterwards.

• Trademarks – This protection applies directly to your corporate branding, including symbols, words and names that you use to distinguish your products and services.

• Trade Secrets – while not an “official” protection, some companies to keep information under wraps can keep trade secrets for decades.

The type of protection you choose will be directly related to the work that you want to guard. Each of these methods directly applies to a specific invention, creation or marketing concept.

Considerations in Your Joint Venture

When you are forming a joint venture, intellectual property should be a part of the negotiation process. Some of the questions to ask as you are drawing up your contract include:

• What intellectual property could be compromised through your JV partnership?

• Will your intellectual property be transferred to your joint venture through licensing or physical transfer?

• What protection does your property already possess?

• Will there be intellectual property produced through the joint venture? If so, how will it be protected?

• What confidential information will you need to protect through your joint venture?

• What will happen to the intellectual property if the joint venture dissolves?

If you are concerned about protecting intellectual property in your joint venture, you can begin by talking to an attorney who specializes in these types of contracts. However, you may also need to meet with a patent or trademark specialist, who will be able to advise you on the right way to protect your creative property before you ever even sign on the bottom line. Once you form your joint venture, you may need to schedule a second appointment to discover how to protect your joint property as well.

The most important factor in protecting intellectual property through a joint venture is to do so before you formally create your partnership. This ensures your joint venture and your intellectual property will both continue to be profitable for you.

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.

5 Talking Points Before Agreeing to a Joint Venture

Joint ventures have long been touted for their ability to boost profit for little up-front cost, but there is no guarantee they will be successful. Unfortunately, many business owners dive in without much thought or discussion from the get-go, resulting in a partnership that is disorganized and leaves expectations unfulfilled.

We have five talking points to include in your discussion when you’re contemplating a joint venture to ensure everyone is on the same page right from the start.

Your Purpose

What is your reason for entering into a joint venture? Is it to build your customer list through effective online marketing or boost your profits through cross sales? Are you more interested in investing back into the JV to make it grow or merely using it as a marketing tool? Answer these questions during initial discussion to make sure both partners on the same page.

Your Commitment

Determine up front how much time and energy you are willing to commit to a joint venture and then follow through with your promises. One of the easiest ways to make a JV partnership go bad is to fail to live up to your initial commitment in terms of your time and monetary investment. Know what you can do at the beginning of the partnership and you will be much more likely to see it through to the end.

Your Skill Set

What can you bring to the table? Perhaps you’re a master of SEO and can write a viral, linkbait article. Maybe you have customers who are willing to write positive reviews on your partner’s products. Every business owner has something to offer, so pool your resources to produce the most effective marketing partnership possible.

Your Profit Sharing

This talking point cannot be underestimated because money is probably one of the touchiest points in any type of partnership. Know precisely how profits from the joint venture will be split before you sign a contract, and make sure the specifics of your agreement are listed in writing. There is nothing more important than protecting the financial interests of all the partners involved.

Your Timeline

Some JV partners make the mistake of failing to put a set time limit on their JV agreement. This makes it difficult to dissolve the arrangement if it fails to produce the expected results. Every joint venture should have a deadline, even if the date is simply an opportunity to review the partnership and determine if it will continue. Put the date in your contract, so everyone involved knows exactly what to expect.

Joint ventures are a successful way to build businesses, if they are handled properly. Once you have identified a prospective JV partner, it is time to sit down together and hash out every one of these talking points before drawing up your contract and signing on the bottom line. A little homework up front ensures everyone will remain happy with the arrangement well into the future.

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.

5 Steps to Ending a Joint Venture

All good things must eventually come to an end, and that includes your joint venture agreements. However, dissolving a joint venture doesn’t have to be a negative experience. With a little advanced planning and a lot of business finesse, you can call it quits and still stay professional “friends.”

Capitalize on these steps for ending a joint venture so that everyone is happy with the process.

Check the Fine Print

If you prepared properly at the beginning, you probably have guidelines in place for dissolving your partnership. Check your contract to see what provisions were made for ending your relationship, including the time frame you agreed upon, the division of joint venture assets, and how to handle future income the partnership might continue to generate.

Consider a Buy-Out

The large majority of joint ventures end with one partner buying out the other business. If it’s still profitable, but one partner wants out to pursue other avenues, consider a buy-out option. This allows the benefits of the joint venture to continue with the partner who still wants to play the game. The business owner with the two businesses may try to go it alone or recruit a new JV partner to help shoulder the workload.

Sharing Customers

If the joint venture partners have been sharing a particularly good customer, there may be some negotiation in order to determine how to handle the situation. It is best to talk through this type of situation to continue to build trust between partners and ensure the customer is properly cared for. Your customer will also be more likely to continue to bring his business to the remaining partner if he feels the separation was handled amicably.

Keeping Confidences

It is highly likely that confidential information was passed between partners during the term of the joint venture. It is important to leave the relationship with the confidence that this shared information will remain confidential. You can create an ongoing confidentiality agreement that protects both of you indefinitely.

Future Assets

If your original joint venture contract did not address the issue of future income or assets, this is another issue you will need to discuss with your partner before dissolving your relationship completely. Determine who will receive future income and who will be responsible for future payments that might arise. This is another agreement that should be put into writing to protect the interests of both partners long after the partnership is dissolved.

Like any business arrangement, joint ventures typically sport a finite time frame. When the time comes to part ways, take the time to sit down together and go over any final issues that might arise. Put your new agreement into a written contract that can be used to hold all parties accountable for future transactions. This simple process ensures that everyone’s interests are properly protected long after the partnership has ended and that your professional relationship continues on a positive note for any future joint ventures that might arise.

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.

4 Legal Concerns for Joint Venture Partnerships

Because a joint venture usually consists of a contractual agreement between two or more businesses, there are legal issues to consider when forming one of these partnerships. Handling the legal side of joint ventures ensures that expectations are clearly defined and carried out for the best interests of all parties involved. We have four legal concerns of JV partnerships to consider before entering into one of these business agreements.

The Contract

While it might be tempting to enter into a verbal agreement with a business you are already familiar with, it is rarely advisable to form any type of partnership without a legal contract. This simple exercise ensures that all parties involved with the partnership adhere to the terms laid out at the beginning of the process and offers recourse to businesses when their partners don’t hold up their end of the bargain. Templates for JV contracts can be found online, or businesses can hire a legal professional to help them draw up a customized contract for their specific needs.

Creating a New Entity

If your JV partnership will create an entirely new and unique business entity, you will need a tax ID number from the IRS and possibly a trade name affidavit for the title of your new partnership. Check with the IRS, as well as your state government, to learn the requirements of creating a new partnership. While joint venture partners can undertake the task of creating a completely legal entity on their own, it can be helpful to enlist the help of a lawyer to ensure all necessary documentation is filed.

Purpose and Terms

When you are creating a JV partnership, you are generally doing so with a specific purpose in mind. This purpose should be the same for all businesses involved in the joint venture to ensure expectations are properly met. The terms of the agreement, including profit sharing, marketing strategies and accounting basics should also be settled before the partnership is official. All of this information should be included in the contract to ensure the interests of all parties are properly protected.

Time Frame

Unlike other types of business partnerships, a joint venture is usually a temporary endeavor. All the partners involved in the joint venture should know up front exactly how long the partnership would continue. If you are unsure of a length of time for your joint venture, at least agree on a specific date to sit down together and review the partnership. At this time, all the businesses involved can determine whether they want the joint venture to continue or dissolve.

A joint venture is a binding agreement, just like any other business negotiations into which you might enter. By addressing all the legal concerns at the beginning of the process, your joint venture will be less likely to cause disappointment and frustration for the members. When you set your JV partnership up correctly from the get-go, you will be more likely to see mutual success and benefits from your joint 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.

The Nuts and Bolts of a Joint Venture Contract

When you head into any type of joint venture partnership, a written contract is a must. This document will protect your interests and the interests of your partner for as long as the partnership is in effect.

Some business owners are intimidated by the prospect of designing a joint venture contract, especially if they have never had experience with legal documents before. While you can hire an attorney for this purpose, you can also easily design your own agreement by keeping these key components in mind.

Purpose

The first component to put into your JV contract is the purpose of the joint venture. You and your partners should head into this agreement with similar goals in mind, and these should be clearly spelled out in your contract. The method by which you will achieve these goals should also be carefully outlined, ensuring all parties head into the agreement with full knowledge of what their responsibilities will be.

Benefits

Most JV partnerships are formed because each entity hopes to benefit from the agreement in some way. For newer businesses, this often means obtaining email lists and link traffic from a larger, more established company. Bigger companies usually enter into a JV partnership because they can reap commissions on the sales their partners make. No matter what your benefits will be, list them fully in the contract so no one is disappointed by the outcome of the agreement and no disputes arise after the fact.

Strategy

This is the process that will be utilized by both companies to achieve their goals. It will provide the brass tacks of the marketing concept that will be used to promote all the businesses involved. It may also involve the specific responsibilities each company will have to ensure the final outcome takes place. Since unrealized expectations can be the source of many lawsuits, make sure your expectations of one another are realistic by outlining them precisely in your contract.

Time Frame

Many JV partnerships are set for a specific amount of time and come complete with a due date when the partnership will terminate. Even if you want your partnership to be more open-ended, it is a good idea to agree on a date when you will revisit the agreement to ensure it’s still working for the benefits of all involved.

By providing a specific timeline for your JV partnership, you give all partners the chance to bow out of the agreement if it is not sufficiently beneficial. If the partnership is going well and you want more time, you can renegotiate your time frame when the initial deadline arrives.

JV partnerships are legally binding ventures, and the right contract will make all the difference in protecting your interests and offering an out if the agreement does not work. Whether you choose to hire an attorney to draft an agreement for you or use a template you find on the Internet to draw up your own, the contract is the key ingredient to a successful joint 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.

5 Tips for Writing a Successful Joint Venture Marketing Agreement

Joint venture marketing involves two or more businesses that come together with the intent of building a customer base and company profits. To ensure that the interests of everyone involved in a JV partnership are properly protected, a marketing contract is a necessity right from the very beginning of the agreement. This article will offer five tips for writing a successful JV marketing agreement with which all involved parties will be satisfied.

Agreement Terms

One of the longest portions of your JV contract may be your Terms and Conditions. This section will explain various aspects of your marketing agreement, including the length of the agreement. If your partnership will have an open-ended time frame, your terms and conditions may spell out the benchmarks at which you will reevaluate your partnership with the intention of either dissolving or continuing the agreement.

Financial Management

The idea of a JV partnership is to make more money, so management of the funds will be a concern in your JV marketing agreement. Your contract should spell out who is allowed to handle the funds for transactions like sales, refunds and accounts payable. It should also include how financial information will be shared and disclosed, so the monetary interests of both parties are fully protected by law.

Protecting Confidentiality

A non-disclosure agreement is important for every member of a JV partnership. While it may be a no-brainer that larger companies won’t want sensitive information shared with others in their industry, it is equally important to protect the privacy and confidentiality of younger, smaller companies as well. An NDA keeps all information classified as “sensitive” under wraps, only to be shared with approved individuals and never with the industry at large.

Protecting Members against Lawsuits

Lawsuits are an unfortunate fact of life today, so your JV marketing contract should do everything possible to protect you, your family members and your company against legal action. Because your joint venture partnership will involve a large number of individuals, any of these persons may become involved in a lawsuit at one time or another. The indemnity clause ensures that no one else in the partnership can be held liable for another’s legal issues.

Using an Attorney

Because many business owners are intimidated by constructing a JV marketing contract, it is a good idea to consider working with an attorney who specializes in these types of agreements. However, there are also numerous templates on the Internet that will walk you through the steps of constructing an effective joint venture marketing contract without the added expense of an attorney.

Whether you draw up a JV agreement on your own, use a template off the Internet or hire an attorney, this contract will be the most important component of your JV partnership. A joint venture marketing agreement lays out the terms of your partnership so expectations are realistic and the purpose of the partnership is clear.  By putting your agreement in writing, you will protect the interests of all of your JV partners and ensure your JV marketing efforts are equally beneficial for every business involved in the partnership.

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 Joint Venture Marketing Wealth Report.

The Legal Side of Joint Venture Marketing

A successful joint venture partnership is one that is equally beneficial to both parties. To ensure that each party’s interest is fully protected throughout the life of a JV partnership, legal documents must be included in the initial setup of the JV entity.

There are a number of legal steps that may need to be taken in establishing a legally binding JV agreement, depending on the size and length of the union you are undertaking. This article will cover a few of the basic legalities to get you started.

Contract

Joint venture partners should draw up a contract with one another that precisely defines the terms of the partnership and creates a legally binding agreement to which all parties must adhere. There are a number of options for creating this contract:

• Enlist the services of an attorney who specializes in joint venture agreements

• Utilize online legal services for the purpose of designing an agreement

• Find a template for a JV partnership agreement online that you can complete together

• Write your own contract, including business names, purpose of the partnership, terms you agree upon and signatures and dates

To begin the contractual process, determine the terms of your JV partnership and write them down together. These terms can then be sent to an attorney, where a formal contract is drawn up for both parties to sign. The contract should be specific and complete, so that it protects the interests of all businesses involved and can be used for any potential disputes that might arise.

In some cases, the term for the JV partnership will be clearly laid out in the original contract. In other situations, the partners may agree to continue the arrangement indefinitely. When both partners decide to end the agreement, it may require additional paperwork to divide up the assets accumulated during the life of the partnership.

Forming a Separate Entity

If your JV partnership will form a separate entity that includes both businesses into a single unit, other legal forms might also need to be filed. If the partnership will operate under a separate name, the name must be registered with the state in which you operate.  You may also require a separate tax ID number for your JV partnership for the purpose of withholding taxes for employees hired by the partnership. This number can be obtained by filing the proper paperwork with the IRS.

All of these steps can be handled through the JV partners, but you can also hire an attorney to take care of the legalities of establishing the partnership. This trained professional will charge for his services, but you can rest assured the legal work will be handled expeditiously and accurately. If you decide to navigate the legal waters without professional advice, websites of your state government and the IRS will provide the information necessary to complete paperwork and set up your JV partnership correctly.

Joint venture partnerships are a great way to increase business, but they work best when they are established with clear guidelines for all parties involved. Whether you choose to enlist the help of an attorney or complete the necessary paperwork on your own, a legal and binding agreement is the first step to a successful and profitable partnership.

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 Joint Venture Marketing Wealth Report.