The Who, What, When, Where, Why and How of Joint Ventures

The Who, What, When, Where, Why and How of Joint Ventures
What is a Joint Venture?

When two entities enter into an equal partnership, this is
a joint venture. The essential defining factors of this
union are equal risk and equal reward. That means that each
party will divide the costs evenly, and will also share the
profits. The parties may enter into a legally binding
agreement that covers the responsibilities and expectations
of each. Later, we will discuss the different forms a joint
venture can take. First, we will get a more complete
understanding of a joint venture.

When is the right time to partner?

You will have to take a good honest look at your company.
Consider the timeline of your success. Where did you begin?
Where are you now? Where do you see your company in 5
years? In 10? After grasping that perspective, explore the
key components needed to get you to your short term goals,
and then your long term goals. Finally, if what is needed
could be supported by partnering with a company who does or
has what you need, then now may be the time to form a joint
venture.

Why a Joint Venture?

Entering into a joint venture has some known benefits. The
first and maybe most appealing of them is the concept of
spreading the liabilities between the two parties. Most
parties are willing to put in their share of equity,
feeling assured that the other party is equally invested.
As the saying goes, people follow their money. Because of
this, entering into a joint venture is a more secure form
of partnership, as both have shared the risk. Both parties'
reputations and profitability depend upon their doing their
part to succeed.

Where do I find the right company to align with?

You'll have to ask yourself what parts of the country or
internet you'd like to reach. Or if part of your company's
vision is to become international, then a joint venture may
be required. Many US companies must form a joint venture
with an international one in order to do business in that
country. The US company must partner with the foreign one
in order to be legal.

Who should I JV with?

At times, choosing the right entity to join with can seem
overwhelming. After all, you have a company to run. If you
have your own research and development team, they can help
find the company whose partnership will help your company
develop into its next level of success. However, consider
that there are joint ventures brokers who can do this job
for you. After collecting information of your company's
vision, they can help you find the best match for you
particular goals.

How do I form a Joint Venture?

A joint venture will most commonly take the form of a
corporation, a limited liability company, or a limited
liability partnership. Many things should be considered
when choosing which is right for you. Each of these have
different tax implications, and it is recommended to
consult a tax professional is deciphering the best fit for
both parties.

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Christian Fea is CEO of Synertegic, Inc. A strategic
Collaboration Marketing consulting firm. He empowers
business owners to discover and implement Integration,
Alliance, and Joint Ventures marketing tactics to solve
specific business challenges. He demonstrates how to create
your own Collaboration Marketing Strategy to increase your
sales, conversation rates, and repeat business.
Contact: christian@christianfea.com
http://www.christianfea.com