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As there are numerous good reasons both business wise and financial, to create a joint venture with a company that has a great complementary capabilities and resources, such as distribution channels, new technologies or finance, joint ventures are becoming an increasingly popular way for different companies to build strategic alliances.

In a Joint venture, two or more parent companies agrees to share capital, technology, human resources, risks and rewards in a formation of a new entity under shared managerial power.

But before going into a joint venture, you should consider something first. We have gathered some information on what are the most important things to think about before going into a joint venture, here is the list:

Before going into a joint venture, be sure to first screen prospective partners. Make sure that you are on the same level of the industry.

Also make a joint development of a detailed business plan and short listing a set of prospective partners based on their contribution to the development of the plans.

Check the credentials of the other party by doing interviews and research. Check their previous business and also the sales that they are getting. You may also want to check customer feedback regarding their services.

You should also develop an exit strategy and terms of dissolution of the joint venture in case things would go wrong.

You should also try to think of the most appropriate structure for you joint ventures, for example most joint ventures involving fast growing companies are structured as strategic corporate partnership.

You should also take notice of the availability of appreciated or depreciated property being contributed to the joint venture; by misunderstanding the significance of appreciated property, companies can weaken the economics of the deal for themselves and their parties

You should also point out the different special allocations of income, gain, loss or deduction to be made among the partners and so with the compensation to the members that provide services.

You should also take note of the role of your business architect, this is a person that initiates new business ventures or leads business innovations, designs a winning business model and builds sustainable balanced business system for a lasting success.

Business architects can be found in multitude of business settings, be it in corporate change leaders, initiator of joint venture, and managers of different and radical company settings.

Human resources also plays a special role in joint ventures, here are some thing that a human resource should look into to get good business ventures.

The business strategy should begin with a sound, well articulated strategy. Before going into the first step, determine first and explain why you wish to enter into a joint venture, why you have chosen such partner or partners, and what the goal of the company is. You should put into word the involvement of the parent companies and define how long will the joint ventures last.

You should also describe strategies to define the managerial, accountability, decision-making process and conflict resolution procedures.

Develop Human Resource strategies that align and support the goals of the JV. You should develop a distinct identity and culture for the newly form company. Communicate energetically to the employees and establish a distinct career goal, management, and a means of welcoming return to the employees transferred to the joint venture.

Create salary, bonuses and retention program that is inline with the success of the joint venture. Maintain open communication between the companies that have been tied up.

Define a process for leadership selection that is seen fair and credible and give credits to the top-tier leadership as soon as possible. Look for key indicators of leadership potentials such as behavior, past experience, and measurable outputs.

To engage and motivate your employees, communication should be frequent and used to create a common vision, establish a connection with leadership, explain the new rules, support the individual transition process, aid in retention, and ultimately, define the new organization in terms of “We” instead of an “It” or “They”. Share as much information as you can, and never sugar-coat or make false promises.

Conduct employee research to help the new organization determine what matters to employees and can serve as the foundation for all programs and incentives.

A profitable joint venture can mean a good amount of fortunes in a short period of time; it can bring your products and services to the right market without spending a cent of your own money. It can mean free media attention and everything else that has something to do with sales and marketing.

All of these things translate into more sales. More free time and more of everything that is good.

In simple terms joint venture simply means that two or more business people or company partnering up to create a win-win situation for all the parties involved.

Joint venture can be quite tricky for beginners, but once you get to know the knack to follow joint venture rules, you can be on your way to building your empire out of thin air. Dealing with joint venture you can be into one of these positions:

IF you have your own products, then joint venture with list owners is what you have. In this nature of business you should be extra careful because most of the members of the list want to do business only if your product is new and have a proven value for their customers.

One great advantage of having a list owner is that most people in this side of the industry real knows what they are doing and were created for different categories.

There are many list owners on the business today, you can use many of this links to leverage their customer assets and split the profit with the owner.

One important thing to remember is to never to a joint venture with list owners that does not match with your product or services.

If you have your own customers list, joint venturing with other product development owners will be the one for you.

Basically this type of joint venture, can give you a much higher income than your partner and you do not have to develop your own product or services.

All you need to know are those products or services which best suits your customers needs. Let me advice you to use a software program, because doing this with your bare hands can take some time.

If you have no product or even no customer list, you can still go into joint venture; you can become a deal maker. Yes without even any money you can start your own business.

What you have to do is to look for the right product and the right list of customers. This way you will charge a percent from both sides for years to come.

Have the knowledge to make money online and you too can also do joint ventures.

Perhaps one of the most neglected Joint Venturing method because it requires a lot of your time for research, but finally you’ll end-up charging 50% of all direct sales, which by the way, it is a fair amount for your work.

Connect to the Internet and search for great products that have very poor advertising. Identify one product or service, look at their web site, sales letter, order forms, web design and many other things you can improve.

The problem with Joint Venturing is to work smart not hard!

At this point, you probably wonder if it’s as simple as I told you. Yes, it is that simple! Never forget that simple ideas can generate better solutions for your problems.

Joint Venturing creates tremendous benefits for both parties, without any initial investments.

People are eager to buy from someone who trust and know!

Please read this carefully and more than once. Do it again and again until you’ll understand that a Joint Venturing it’s not possible without this rule.

People are eager to buy from someone who trust and know!

The most valuable assets you have in your business are the relationships you have built with your customers.

The money is in the list! The money is in the backend sale. Don’t you ever forget this!

No matter what kind of business you run, definitely an educated list of customers represents your best asset. Without a list you cannot survive in these days.

The key to succeed is to constantly enlarge your list of prospects/ customers and to offer them the right product, at the right time, with the right price.

A joint venture, or abbreviated as JV and sometimes called joint adventure, is a tactical union flanked by two or more parties to embark on a financial activity together. This alliance agrees to create a new entity together by both contributing equity and they then share in the revenues, expenses, and control of the enterprise.

The venture can be for one specific project only, or a continuing business relationship such as the Sony Ericsson joint venture.

Organizations can also form joint ventures, for example, a child welfare organization in the Midwest initiated a joint venture whose mission is to develop and service client tracking software for human service organizations. The five partners all sit on the joint venture corporation’s board, and together have been able to provide the community with a much-needed resource.

Joint ventures are more common in the oil and gas industry, and often are dealt within corporations on the national and local levels. A joint venture I always seen as something good in this kind of business industry and a very good alternative in this sector as local companies can complement their skills and technology sets while it offers the foreign company a geographical presence.

As there are good business and accounting reasons to create a joint venture (JV) with a company that has complementary capabilities and resources, such as distribution channels, technology, or finance, joint ventures are becoming an increasingly common way for companies to form strategic alliances.

There are so many reasons why companies form joint venture, listed below are some of them.

One of the most common internal reasons why most companies join joint ventures is the spreading of cost and risks, sometimes companies who are into new projects looks for another company who is willing to undertake the same project with them. This way, companies are able to spread out the cost and the risk of failing.

 

Joint venture is also a good way to improve financial access or resources, like for example your company can make a deal with non-profit organizations who can be exempted from taxes, so that your project will have lesser cost and much more financial gaining.

You can also be partners with bank or other companies that has a much higher earning than your company.

Economic scale is also one good advantage of having a joint venture, when you have a small company but have a very broad idea or have something new that will surely attract large mass of sales, and your company cannot afford to stabilize such project you can go for some company who are larger when it comes to economic scale.

Being partners with other company and joining in a joint venture also give you access to new technologies and customers. It also gives you the much coveted access to innovative managerial practices.

Joining joint ventures can also influence structural evolution of the industry. It is also a good way or pre-empting competition, like if you have a competitor and you on the same financial field and he has good strategies that work as well as your, forming a good joint venture with this company can boom into a much bigger company, meaning bigger sales and more money.

Joint venture is also a good response to blurring industry boundaries. Joining two companies can also lead to a creation of stronger competitive units. Joint venture can speed up market and improve agility of the company when it comes to business terms.

When a creation company like what other companies are doing an would like to adopt it on a much more legal way, joint venture is good thing to do. Joint ventures help transfer technology of one company to the other.

If your company would also like to transfer skills from other companies you can also look into joint ventures.

Diversification is also a great reason why some company goes into joint ventures, this helps them stabilize their company growth and also make them available to different forms and types of business industry.

Other countries may require foreign companies to form a joint venture with their local firms in order to enter a certain market. This requirement often forces technology transfer and managerial control to the domestic partner of the joint venture.