There is not much difference between a big time and an unheard of company or business when it comes to joint ventures.
You have probably heard of rags to riches stories of how some people are making millions by getting into joint ventures. What makes their stories amazing is that before they got into the alliance, they were unknown entities making a decent income.
Joint ventures made the sudden boosts in their businesses.
Small companies can combine to take on the “big sharks” in their industry. While big companies form alliances with faster and small businesses with the right potential.
It is also possible for smaller companies to form an alliance with companies that have a big name to be able to expand their geographic reach.
It is estimated that 25% of all revenues for the year 2005 alone, which total to 40 trillion dollars, is all because of businesses going into joint ventures with other businesses. This is enough reason for small businesses not to ignore the benefits that joint ventures can give them.
What are some of the valuable opportunities you can get from joint ventures?
1. You can cut down on the time-consuming business development. If you have a small business, getting into joint ventures will minimize the need to create new products and the knowledge to be able to expand your market. These things do not happen instantly, they take time.
With joint ventures, you get more leads, advance expertise and accumulate fewer costs.
2. You get to improve your business’ credibility. This is the most common problems encountered by new businesses. They struggle to gain credibility within their target market and customer base. An alliance with already known and trusted company will significantly advance your credibility with your customers.
3. You can have new sources of revenues. Normally, small companies do not have enough capital and resources needed for growth. By getting into a joint venture with a sound and stable partner, your sales force will be sales force and channels will be expanded for a lower cost.
4. You can be shielded from your competitors. With the many existing competitors out there, there is a big probability that they will try to infiltrate through your business. A partnership will major key companies will help lessen that. You get to build solid walls to keep your competitors out while retaining high profit boundaries.
With all these benefits up for grabs, you are probably too eager to start thinking of going into joint ventures. But then, do not start rushing to get into the first ones that you see. A badly executed and poorly planned joint venture is likely to be doomed early on.
What are the secrets of a successful joint ventures?
1. A clear objective. You have to know what you want to achieve from the start. The partner you chose may not have the same goals but at least they should be complimentary to yours.
2. The right partner. The best partnership should put you both in a win-win situation. Take some time to find the company that has an interest in joint ventures and has similar objectives set. If what you want is not in line with what they want, your ideas will probably clash sooner or later.
3. Plan the venture. Work out a plan on how you will go about negotiating and the tactics you can use. You have to understand the different aspects of the deal you are getting into. What is primary on your mind is to enter into a win-win venture.
4. Manage the alliance well. It is said that a joint venture relationship is like a marriage. Its foundation should be built on understanding and trust. The real work takes place once an effective alliance is formed. If you find yourself in one, treasure it as you would something that is valuable to you.
Joint ventures can work effectively for all the parties concerned. You just have to understand the processes involved so make the relationship smooth-sailing.
But first, go find yourself a good one.