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Marketing Your Business Using Joint Ventures

JV Concepts/ Joint Ventures / 2
Introduction

In this book we are going to discuss what joint ventures are and how they can be
used in your business to gain more customers, improve profitability, expand your reach
into more lucrative markets and overall take your business beyond where it now presently
stands. It's been said that less than one percent of small to medium sized business owners
use or know how to use joint ventures in their business. This is unfortunate. Joint
ventures can far out surpass most forms of advertising and marketing. Joint ventures are
an easy and effective way to get your business and its products and services out there in
front of the eyes of the buying public,with very little risk or investment.
This book provides information, techniques, examples, and training on using joint
ventures/strategic alliances to serve as the basis for recommendations for more effective
and efficient ways of marketing your business, products, and services. Both on-line and
off.

JV Concepts/ Joint Ventures / 3

JV Concepts/ Joint Ventures / 4

Chapter One
What Is A Joint Venture

Joint Ventures or a Strategic Alliance is a relationship between two or more parties to
meet a critical business need while remaining independent.
Partners may provide the venture with resources such as products, distribution channels,
knowledge, or expertise. The venture is a cooperation where each partner hopes that the
benefits from the venture will be greater than those from their individual efforts.
It's a way to ethically leverage off the existing resources of other business, be they the
companies relationships with their customers, their distributors, their media, their markets
etc.
Whether you're new in the art of business or have been an entrepreneur for some time,
you'll eventually come across the idea of becoming part of a joint venture.
It may sound like a bit of complicated business talk but a joint venture is a variation on
the age-old idea of a business partnership.

JV Concepts/ Joint Ventures / 5

Chapter 2
Advantages Of Joint Ventures

A joint venture is business association with two or more parties merging resources for a
particular purpose or project. Setting your business goal/s is the first step when entering a
joint venture. Your goal may one of the following: expanding a marketing coverage,
sourcing out information and business links, building credibility with a specific target
market, or accessing new markets that is hard to aim in a solo business.
After you have set your goals, you should look for a trusted business co-participant who
shares a common goal. Third step is exchanging business concepts with your chosen coparticipant. Fourth step is securing the joint venture by written agreement. You need
guidance of a legal professional guidance to do this. Here are the following advantages of
joint ventures:
1. Access to new technologies – If you want to enter into global markets and have a
prosperous business, access to state-of-the-art technologies is very important. Joint
ventures can provide a thriving or growing business with right new technologies that a
solo business cannot develop due to costs or other resources constraints. Investing on new
technologies offers risk but if a purchase is based on well-thought planning, failure can be
avoided.
2. Cost reduction – Costs of production, distribution, technology, transportation, and
other needed capabilities can be reduced with joint ventures. It is much easier to focus on
product or service enhancement when you don’t worry so much about exceeding and
impractical costs. If this is the case, you are most likely to expand your business
eventually.
3. Provide participants the opportunity to learn – Forming an alliance allows the
participants to work with other businesses in the same or related industries. This provides
participants with the opportunity to learn from each other’s successes and mistakes.

JV Concepts/ Joint Ventures / 6

4. Sharing risks – Joint ventures allow participants to exploit new opportunities. To be
successful in a project, participants must have rapport and open communication. The very
important role in sharing risks is the square root rule which means the success of a
particular project depends on the risk preferences of the venture participants.
5. Improves market credibility, penetration and access – All businesses struggle at the
start in building acceptance, penetration and access within their target market. Joint
ventures allow customers to have trust and confidence on a particular project. It also
helps attract more customers and improves coverage.
6. Lesser chance of your partner becoming a competitor – Since your fellow participant
in a joint venture alliance have similar goals, interests, and business perspective with you,
merging resources upshot to lesser chance of competition when it comes to the particular
project.
7. Better market feedback – When a business is able to provide state-of-the art
technologies, better market coverage, enhanced credibility and penetration,
customers are able to give feedback more. Joint ventures are healthy alliances that
help a business understand better their market. By allowing you to focus on
developing your strengths, joint ventures provide the ability to respond more
quickly and effectively to change. In some cases, joint ventures also allow you to
open up to global opportunities.

JV Concepts/ Joint Ventures / 7

Chapter 3
Why You Should Do A Joint Venture

Many start-up businesses right now have several people at their helm. Joint ventures are
very popular among younger business people and those who are putting up their very first
business. And why so? Perhaps because a joint venture affords people with a host of
benefits that are just too good to refuse. Here are some of them:
1. You need expertise
You can’t know everything. One of the best reasons for opting for a joint venture as
opposed to doing it on your own is the need for another person’s expertise. For instance,
if you want to start a T-shirt business but you do not know a thing about a T-shirt, the best
way to start the business is to partner with someone who knows the business. You can
learn from his or her expertise and start the business that you want. It beats having to
enroll in some sort of T-shirt workshop.
2. You need the money
Some people opt for having many business partners because they do not have enough
money to start the business. Remember that starting any kind of business takes a lot of
money and if you are young and fresh out of school, you will not the have that amount of
money sitting idly. Thus, you can partner with several other people so that you can pool
your money together and raise enough money for the business.
You can even find partners who will finance the business while you do all the work.
These are called the silent partners or the financiers of the operation.
3. You need a cushion
Going into business can be frightening and some people feel better if they have people
who will cushion their fall. In fact, some do not even care if they lose a lot of money just
as long as they lose it with other people. Failure, after all, appears better and is easier to
accept when shared with a lot of people.
4. You need to have less risk
This goes back to the subject of money. Although some people have the money to
risk, they do not want to risk everything. Thus, they look for partners who will share the
risk with them. When there are many of you in a business, the amount of money that you
need to initially invest will be smaller and more manageable.

JV Concepts/ Joint Ventures / 8

5. You need people to do the work
When you are alone in the business, you will need to take care of it 24/7. This is
not for people who are also holding full-time jobs and are just doing the business
on the side. Having partners means that they can take over for you or you guys can
come up with a schedule where each can take turns taking care of the business.
6. You need more input
Thinking of marketing gimmicks for your business or selling tactics on your own
can be hard for the brain to do. Thus, you need more people to do the thinking for
you.

Chapter 4
Elements Of A Good Joint Venture

Joint ventures are not always successful. This can be hard to imagine especially when it
promises a lot of benefits for all concerned. There is less risk. There is sharing of
resources. There is more people to get ideas from. There is help around. Generally, it is
like having another you working towards a goal.
Joint ventures can be entered into by two or more parties depending on the need. Often,
joint ventures are created in order to produce a product or realize a project that will need

JV Concepts/ Joint Ventures / 9

different resources and these resources cannot be provided by just one person or
company. Think about it as organizing an event. To plan the party and make it a success,
you need a good caterer, a good party planner, great sound system, decorations and stage
set-up. Each of these companies provide expertise that you cannot provide. When these
people or companies come together, each putting their own products, technology, service
or expertise on the table, that is what is called a joint venture.
There are several vital elements to a joint venture and you need to look into each one to
make sure that it will be a success.
The first one is the partners involved. Who will be the partners in the endeavor? Do you
know them? Have you researched their personal background and company history? If it is
a company, have you reviewed its performance and its current CEO or its leadership in
general? It is important that you know these things about the partner that you will be
seeking. A joint venture can fail when two incompatible partners come together.
The next element is the contractual agreement. This is established so that the partnership,
the goal, its duration and the contributions of each will be put into writing. This
minimizes confusion and other potential problems in the future. Discord will also be
avoided because people will know what their role is.
Another element is the purpose and duration of the contract. Joint ventures are not
forever although it may seem like it. It can be long-term or short-term. Often, joint
ventures do not last long, often along the duration of the project. Some though especially
those who have products to sell, continue for years and years until a partner decides to
back out of the contract or refuses to extend the contract. It is advisable that the duration
should be two to three years after the “creation period” to give time for the product to get
into the market.
Partners in the joint venture need to put into writing how long the partnership will last
and if there is a provision for extending the contract for another period of time. This
should be established at the start of the partnership. This way, everything is clear and
each partner knows for how long the venture will be.
Lastly, there should be the joint property interest, which states which properties are
shared and will be distributed to the partners in case the venture is dissolved. This states
the percentage of the joint property that each partner will get depending on their initial
and continual contribution.

Chapter 5
On-line Joint Ventures


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