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Many people mistakenly think that joint ventures are only effective if you are a large player in the market that your business or product falls under.  However, the truth is actually quite far away from that statement even though they are usually most notable when they involve joint ventures.  For example, most people in the online community already are away of the joint venture effort between PayPal and EBay.  The good news is that you can have the same success with a joint venture if you plan properly and take full use of everything that such a deal can offer. The essence of joint ventures is based around the premise of helping a small less known company get a leg up on the competition by using the customer base or popularity of another business.  They are designed to help out small businesses by joining up with another company to share a customer base and promotions in exchange for either equal advertising and promotion efforts, or a small percent of the commission on sales.  This is reasonable given that the sales would not have happened without the aid of the joint venture. For a company that does not have a large budget or the ability to advertise a joint venture is an easy way to gain access to a new wider customer base or potential target market.  Generally they work out best when you explore businesses that are not your direct competitors, but are closely associated such as a company that sells Quickbooks if you provide accounting services.  Of course, the logical question that most people have is how to find a joint venture partner.  It is highly unlikely that they will come to you, so the best way is to get out there and research potential partners online.  LinkedIn is also an excellent business resource online that provides plenty of social networking opportunities and connections to businesses that may be looking for potential partners.  The more time you spend investigating the opportunities the more you will see them fall into your lap.

Excerpt from:
Joint ventures are not just for the big guys

First of all, let me define to you what a joint venture is.  Joint venture is collaboration of two or more persons including their assets, knowledge, market shares and, of course, their profits.  For instance, if a company would like to increase its market share without spending millions of dollars, it can join another company having similar products and services.   It has been proven that joint ventures are effective in terms of increasing profits, in downsizing expenses and in market penetration. Here are just some various reasons in forming joint ventures: 1. To increase the company’s capital.  A much bigger capital would mean greater business options, wider market and bigger profits.  More products can be produces and more services can be performed when you have better   resources. 2. To further strengthen the company.  As they always say, two heads are better than one.  Joined ideas, concepts and opinions will mean better possibilities but all of these must be squeezed into just one brilliant idea. 3. To be able to maximize profit.  Having a bigger company may lead to business expansions and it would mean greater income for the company. The success of a partnership relies mainly on its execution rather than in the process itself.  Agreements must be ironed out properly to avoid conflicts and misunderstandings between parties.  The most obvious details to the smallest details must be given importance, such as the assets, its people, profits, expenses and others that concern the partnership.  In this way, there’s no doubt that a joint venture will achieve its goals and objectives.         The failure of joint ventures, on the other hand, is due to disagreements of the parties involved, their lack of knowledge, conflicts of opinions, etc.  Trust should be considered a major foundation in building a partnership.  What brings joint ventures down is having different views, ambiguous visions and imprecise goals.  However, problems may still be resolved with proper negotiation and concessions to avoid the partnership to be dissolved.     It is sometimes risky to have a joint venture with someone or with persons having a different nationality.  Different cultures have different ways in running a business, in dealing with problems and in leading people. This can lead to major problems in the future.  With having divergent goals, it is impossible to merge ideas and concepts making the business chaotic and knotty.  Minds will not be able to meet with this kind of joint venture.    It’s really a challenge to put up a joint, and it takes a lot of guts to make it successful.  A partnership will be effective, successful and profitable if both parties will agree only to a single goal and are geared towards a similar direction. The most important thing in a partnership in not even found in the agreement or papers, it’s the trust that the partners have for each other and nothing can beat that.  Consider trust as the main ingredient in reaching the company’s objectives.  Always bear in mind that having a common goal, mission and vision is the main factor that governs a joint partnership.

Read the original here:
Joint Venture: Success and Failure