What is a Joint Venture?
A Joint Venture (JV) is a strategic alliance between two or more, people or companies, where they agree to contribute services, products, IT (intellectual property) or capital to the mutual benefit of all parties. However each party retains their own identities, property and business.
A joint venture is very different from a partnership, you are not joining businesses, with a Joint Venture basically you have chosen to team up with or team together with another or others for a specific project or program. Most joint ventures work on one project at a time.
Why Consider a Joint Venture?
The two biggest problems most of our clients have are firstly, how do I attract new prospects and secondly how do I turn those prospects into new clients? How do I get leads and turn leads into paying clients or customers?
Generating leads and converting your leads to new clients and then to fans is an art and is at the heart of all marketing. Joint venture’s are one way to super charge this system easily and effectively.
Imagine for a moment, you have a valuable product or service but are struggling with generating leads and therefore making sales. Now imagine you have a steady stream of prospects into your business, leads visiting your site every day. Also these are not organic cold leads, they are warm leads that have been sent to you from someone the lead already knows and trusts, this is important as it passes to you instant credibility.
Do you think they are likely to buy your product now after a referral from someone known to them?
Well Yes – Of course they are!
The key to a successful Joint Venture is to find partners that have the right demographic for your product. Or partners who's product or service really helps your demographic.
This will then be a win win situation. If you choose wisely, both parties will profit from the alliance. One thing to be certain of make sure your product is of great value to the leads of your joint venture partner, this will not only ensure they remain with you but will also give kudos to your joint venture partner who recommended your product to his tribe. Like wise, if you are the joint venture partner who is recommending a product to your list make sure the product is 100% useful to your list and is worthy of being recommended.
7 Ways Joint Ventures can help your profits
1. They provide immediate access to leads and therefore potential clients, prospects that you would not have had access to.
2. The probability of an ongoing mutually beneficial relationship if your product or service is of high quality.
3. You gain immediate credibility by the association with the successful joint venture partner you choose. So choose wisely.
4. A joint venture will help build your list quickly, getting a current opt in list and building your database is fundamental to your business.
5. You are guaranteed a quicker and larger response from the prospects.
6. Your conversion rate from prospects to new client should increase significantly, after all these are qualified prospects before they reach you.
7. Your ROI should increase dramatically.
Advantages and Disadvantages of Joint Ventures
The sharing principle should govern the entire process of a Joint Venture to ensure it is a win win situation. After all the very essence of a joint venture is co-operation for mutual gain.
Advantages
You can stand out from a crowded market place, it is a low cost way to gain access to thousands of leads, it can be fast, and offers great access with the sharing of resources. You can ‘piggy back' your joint venture partners credibility. It is often easier than doing the complete process alone. Basically if you are a business owner who wants to significantly increase market reach, break down barriers in your market, or simply generate skyrocketing revenues in a shorter amount of time Joint ventures can achieve this.
Disadvantages
A joint venture concept is only effective when there is a true willingness to move forward together.
However if this does not happen you can waste a lot of your time, lose money, gain nothing of significance in return and damage your credibility. There is always the possibility of being ripped off by unprofessional or unscrupulous partner, so the onus is on you to check.
Even though these and other risks in joint ventures are present, the rewards can far outweigh the pitfalls. It is important to completely evaluate your risks and rewards and do your homework before and during the process.
According to stats compiled by Entrepreneur your chances of success, if you do your homework are about 80%
Here are my top 4 steps to having a successful and profitable Joint Venture partnership.
1. Decide What You Want
What do you want or need out of the partnership? What is it that the ideal JV partner would have, expertise or resource, that will benefit you and your business?
2. Choose a JV Partner Wisely
Find a Joint Venture partner that offers what you want. Say you are a fitness instructor you can easily find someone with a big list, but what you really want are keen people in the area where you live so source a Joint Venture partner that clearly offers what you need.
3. Make Sure You are Prepared
If you are approaching someone as a Joint Venture partner make sure you have good reasons why they should be partnering with you. Maybe you have a very targeted list, you have a valuable closely aligned product or service, you have a high reputation in you niche. Remember you want something and they need something of equal value in return.
4. Take Time to Close
It is paramount that once you are in negotiation with a Joint Venture partner that you take the time to sort out the ‘nuts and bolts’ of the deal. Whilst it is important to build a relationship it is equally as important to get the details sorted and what you want clarified and agreed. Don’t leave items to chance and be clear as to which party is doing what. As they say “The Devil is in the Detail”
I hope that you get the opportunity to have a go at a Joint Venture, if you have any questions please ask in the comments box below.
