How to Convince Other Companies to Accept your Joint Venture Offer
Your company could be aiming to jumpstart or roll out an important project but you just could not easily do so because of the significant risks involved. Furthermore, your business may not have sufficient capital and technical expertise to carry on the endeavor. To be able to pursue your goals, you should form a joint venture with other companies, which should be willing to support and take part in your business initiative.
It may not be that easy to persuade other firms to get into an agreement to form a joint venture with your business. To be able to make the task less daunting and more successful, you have to follow the following tips and guidelines to make your joint offer to other businesses more interesting and more irresistible.
First, highlight the win-win situation your proposed project could bring about to partners. Make other companies understand about the practical and logical benefits that they could gain upon agreeing to get into the venture. You could also explain why you are determined to pursue it. Be honest to tell them that you aim to gain more revenues.
Do not produce very lengthy joint venture proposals. Remember the basic rule in business writing: Keep your message short, simple, and direct to the point. Managers and owners of other companies could also be too busy to spend many minutes browsing through your formal joint venture offer.
Create an impression that you are a peer instead of a sales person. It helps to write a joint venture offer in a personal but detailed style. Making the proposal appear more personalized would do wonders. Do not shock the other companies or try to impress them through your showcase of technical knowledge and expertise. They may not fully understand some of the jargons and technical terms you use. As much as possible, make the copies more comprehensive but easily understandable.
Highlight your proposal to do much of the efforts in the venture. Prospective joint venture partners surely would appreciate it if you would assure that they would be required to do less work. The less work the proposed project requires from them, the greater is the possibility that they would agree to become your joint venture partner.
Do not chase only the major players. You may be surprised at how capable less popular and smaller firms could be when it comes to managing and operating your proposed business project. It could be discriminating not to take seriously the minor and smaller businesses in the market. Smaller and minor players could provide you with more resources and expertise than the giants could do.
Tell them how your proposed joint venture could help their own customers and clients. All companies could not say no to projects that would make their loyal and important customers’ lives easier and more enjoyable. This way, you could also actually help them provide much better services to their clients. Such a strategy is important in building trust in your joint venture.
It Takes Two: Starting Up A Joint Venture
One of the problems with starting up a business or trying to enter a market is that sometimes you have the expertise but none of the money or you have all the capital but none of the manpower or the requisite knowledge. It’s kind of risky when you’re starting after all.
That’s where starting a joint venture comes in. A joint venture is essentially a limited form of legal partnership that spreads the risk of a business between two or more partners. Joint ventures are usually dedicated to one purpose though there are several ventures that are continuing business relationships – MSNBC, Microsoft and NBC Universal’s cable news channel, being a prime example of an ongoing joint venture.
The lessening of potential loss for both partners is one of the more obvious perks of being in a joint venture, but the fact that you and your partner share resources and expertise is the main point. He may have information on the marketplace and already have a distribution channel set up, while you have a product that you think is appropriate for the target demographic and just needs to reach the customers. Combining your skills is a no-brainer.
So how does one go about going into a joint venture? Well, of course, the first step is getting a partner or partners. Write up a list of prospective partners and do a thorough screening – checking on the company’s history and determining whether they are what you’re looking for. After that, you should contact your potential partner so that you develop a business plan together – this includes both how your business relationship begins and ends, if your venture will be a limited one. Another part of the business plan will be how your companies will be structured to accommodate each other and how the income will apportioned.
When you’ve cleard up the nitty-gritty business details, it’s time to go into the legal stuff. When you’re dealing with the finer points of business law, it would be best to hire a lawyer – yes, it may be expensive, but it will be even more expensive in the long-run if you don’t hire one to draw up your partnership agreement. An ironclad legal agreement is the best defence against any future litigation that can be sent in your direction. Here are the main points that should be highlighted in your joint venture agreement: how intellectual property rights are dealt with, how the venture is managed, what the partnership covers in terms of business and what each partner is supposed to contribute to the venture.
It should also be noted that the legal agreement must also cover how the venture may end – you may have achieved your goal, or you and your partners’ interests have diverged or you have agreed to end the partnership at a particular time.
And there you go – that’s how you start your joint venture. Of course, it’s a simple introduction but the details will be unique in your situation and the legal stuff will require a more detailed explanation but that’s all you need to go into business with someone else.
October 25, 2017
October 25, 2017
August 6, 2017