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.

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.

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.

Joint Ventures Done Right: 4 Ways to Maximize Your Potential

Joint ventures can be a great way to amp up your marketing efforts, but only if they are entered into with proper education and preparation. The reason many JVs fall flat today is because the business owners that forged these partnerships didn’t take the time to consider the best ways to help these collaborations succeed.

We have four ways you can maximize the potential of a JV for the greatest possible success in your partnership.

Know Your Target Market

Before choosing a partner, it’s important to know what sort of market you want to cater to with your marketing efforts. Some businesses have more than one target market, so it might be appropriate to seek out more than one partner for your purposes. However, many business owners can start with a single partner that caters to a very similar market base to their own.

Define the features of your target market before approaching a potential partner to ensure you and your JV partner are on the same page with your marketing efforts.

Choose Your Partner with Care

Once you know your target market, it’s time to hunt out the perfect partner. Look for a company that offers a similar product or service, but does not directly compete with yours. This ensures you will be after a similar customer base without actually stealing customers from one another.

It’s also important to research potential partners thoroughly before collaborating with them. Find out if the company is stable, check out their current marketing efforts and ask about their resources before partnering up together.

Have a Plan in Mind

When you approach a potential JV partner, have a plan in mind that includes a time frame, the target market you are going after, and the marketing methods you would like to employ. It’s also important to know the resources each of you will bring to the table, how you will split profits, and whether trade secrets will need to be protected between partners.

When you have a plan in mind before you meet with a potential partner, it will be much easier to find a business with similar goals and philosophies. Then it’s time to put your plan in writing, in a binding contract that protects your interests and holds each of you accountable for the joint venture.

Set Your Plan in Motion

The foundation has now been laid, and now it is time to set your plan in motion. If you’ve done all of the necessary preparation, this step of the process should be relatively easy. Keep in regular contact as your plan goes into effect to ensure the process is going as planned and make any necessary tweaks or corrections as they arise.

Preparing for a joint venture is the key to a successful partnership. When you take the time to plan ahead and do the footwork at the beginning of the partnership, you will be more likely to enjoy the full potential your joint venture agreement can offer.

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 Joint Venture Skills to Cultivate

A joint venture offers the opportunity to boost your profit margin quickly and effectively. However, deciding to create a JV and actually building a positive and strategic business alliance can be two very different things. If you are serious about developing joint ventures that get results, we have five skills you should cultivate to ensure your success.

The Ability to Network

You can’t have a joint venture until you find a prospective partner who is willing to say yes to your proposal. That’s where good networking skills come into play. You must be willing to meet with potential partners face to face through trade shows, development and training or other industry events. You must also learn to write a powerful proposal that is sure to get noticed and considered. When you have the networking skills down, you have made the first step toward a successful JV partnership.

The Art of Negotiation

Once you have the interest of a potential partner, it’s time for the negotiation games to begin. It’s important to understand the value of “give and take” in the negotiation process to ensure both businesses have equal interest and everyone is adequately protected. Effective negotiation will make all the difference between a JV that is allowed to flourish and one that falls flat before the ink on the contract is even dry.

The Willingness to be Flexible

As you enter into a joint venture, there are at least two businesses with an equal interest in making sure the partnership is as successful as possible. While you may enter into this process with a set view mind, your partner may have some very different ideas of how to succeed in your efforts.

By keeping an open mind and remaining flexible to the details, you are more likely to capitalize on the innovations and resources both companies bring to the table.

The Desire to Build Strong Client Relationships

Good relationships with your customers are another component of successful joint ventures. When you have positive relationships with current customers, you will be more likely to draw them to your JV partner’s goods and services as well. If you work to build relationships with new customers that find you as a result of the partnership, you’re also more apt to transform first-time shoppers to loyal clients who keep coming back for more.

The Knack for Resiliency

Not every prospective JV partner will say yes to your proposal, and not every partnership you enter into will prove to be successful. When you determine that JVs are one tool you want to use to build your own business, you must prepare yourself for the inevitable rejection and failure that may accompany your efforts. Those who continue to persevere in their endeavors will be the most likely to see the rewards over the long haul.

Joint ventures are a highly effective way to promote a business today, but they are not without their share of risk and pitfalls. To increase your odds of success, work to cultivate these characteristics within your own business model.

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 Common Stumbling Blocks to Joint Ventures

Joint ventures are a highly effective way for small businesses to explode their profits, but only when they are entered into wisely and with some caution. With proper planning, these partnerships can exponentially increase your customer list and your bottom line. Without it, joint ventures can quickly transform into burdens that bring few benefits and are hard to get out of.

To help you avoid the latter scenario, we have listed five common stumbling blocks to joint ventures that you should avoid.

Too Little Research

It’s important to learn everything you can about a potential JV partner, including their performance history, reputation in the industry and financial stability. You will also want to find out what their goals might be for the joint venture to ensure you’re both on the same page in your partnership. Taking the time to do the research up front will usually pay big dividends in the long run.

Not Enough Honesty

Both prospective partners need to be up front about their reasons for entering into the joint venture. They also need to be honest about how much time, money and talent they are able to bring to the joint venture table. If you feel at any time during the negotiation process that your prospective JV partner is not completely forthcoming with you, it may be time to cut your losses and search for a more honest working relationship.

Breaking Client Confidentiality

Many companies enter into a joint venture a little too enthusiastically, and they offer client information before it is really theirs to share. Before you hand over a client list, make sure you are not breaching any confidentiality agreements you have with your customers. It also warrants careful thought before turning over a list that you probably worked very hard to build. Proceed slowly and cautiously when sharing customer information with a JV partner.

Offering Too Much or Too Little

Some companies are so eager to get another business to say yes to a joint venture that they offer much more than they should in terms of customer lists or profits. By the same token, other business owners are too stingy with their joint venture offers, turning many potentially lucrative partners off completely. Your joint venture offer should be large enough to be enticing, but not so large that you end up taking a hit in your bottom line just to secure the JV partnership.

Neglecting an Exit Strategy

Even good things must eventually come to an end, and this is particularly true of joint ventures. The time to think of your exit strategy is before you sign your agreement in the first place, not after you are trapped in an unprofitable agreement indefinitely. Add the exit strategy to your contract, and you will always have an out if your arrangement begins to go south.

Joint ventures have become so popular today because they are a highly effective method for boosting customer lists and profits. With a little thought and preparation, you can enter into a JV partnership that will be lucrative for all partners involved in the arrangement.

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.

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