Have you heard the phrases: “If you can’t beat them – Join them”? or: “two heads are better than one”? and the last one which I love: “United we stand”? What do they all have in common?
Joint venture means two businesses partners join together to create a win-win-win situation for both parties AND their clients.
Most small businesses keep struggling, because they operate as an island and do not take the advantage of joint venture deals with other businesses and becoming profitable.
Creating Joint Ventures is without doubt the fastest way to grow your business because someone else has already done the gathering together of the target market.
Now the problem with creating JV’s is that most business owners approach it all wrong.
The most important thing to remember is to focus on the other person and what they will get out of it.
The biggest mistake you could make is NOT thinking what is it for the OTHER person in this joint venture. You need to think constantly why should the OTHER be interested in joining forces with you and what would be the benefit for them in doing so.
I cannot tell you how many times people approached me and my company offering joint ventures when their only point of reference was why it was good for them to join us. Even if your vision and ideas are similar it’s not enough for a successful joint ventures.
The only reason it would be successful is when you could add value to my clients that otherwise cannot be added.
Here are some ground rules for successful joint ventures:
There are 3 main types of joint venture deals:
Two complimentary but not competing businesses cross-promote each other to their client base.
For example, a lawyer specializes in startups recommend his clients a specialized accountant he trusts, while the accountant, in return, recommends the lawyer to her clients.
- Package marketing
Two complementary businesses create a ‘package’ of products and services that is more appealing to consumers, increasing their profits and giving them a unique advantage over their competition.
For example, a small computer shop could partner with a local computer technician to offer both their clients new computers with extended service contract in a competitive price.
- Endorsed mailing
If you have your own product or service, you can do joint venture with complementary business that has a mailing list with the same target audience as yours.
Your partner emails their list with a recommendation of your product or service and in return you pay them an agreed amount for each deal you sign as a result of their recommendation.
By combining you and your partner’s talents, resources and marketing efforts – both of you make more profit, while gaining credibility and delivering more value to your clients. A WIN-WIN-WIN.
So how do you successfully establish Joint Venture partnerships then?
Well there are a 5 simple basic keys to making this work:
- Build a Relationship – joint ventures are just like any other relationship. The best JV partnerships I have created have came through existing relationships. If you want someone to give you access to their database (ie The most valuable asset in their business) then they must first get to know you, like you and trust you. So focus on building a relationship with them first.
- Identify the right opportunity – You want always to be looking for those businesses who share the same target market as you. Make sure you are clear about who your target audience is. Most business owners have to vague idea of their target audience. You want to be specific as this will make it easier to identify what will be the added value that you can give.
- Make sure the other wins more – In today’s’ mind set everyone is speaking about win-win (not always acting upon it…) but at least they come prepared with it. That’s a great starting place but I found out that when it comes to JV partnerships you need to create a situation where the other party stands to gain far more than you do. When presenting the idea think how to present to them an opportunity where they other stands to gain much more than you by allowing you to access to their database.
- Think, Plan and Strategize! Make sure that when you come to offer a JV opportunity you’ve done your research on the other party and you know EXACTLY what you can offer them that would add value to their clients. Make sure you have a clear and detailed plan to offer them and not just a vague idea. Nothing scares serious JV partners more than the words: “I was wondering if we can somehow work together in a JV?” Think first, create a plan then approach them.
- Have an Irresistible Offer – When you finally get the go ahead to do a JV you need to give careful consideration to how you structure it. I like to make what is called an Irresistible Offer. Irresistible offer means that at the end of your presentation the other party would think “I’d be a fool if I refuse this offer”. When we offer JV on cross promotion we offer anywhere between 50-100% commission fee.
So there you have 5 valuable keys to creating successful JV partnerships.
Just like any other relationship if you wish it to be successful in JV and you wish to create tremendous benefits without any initial investments you’ll need to remember the most important rule. Focus on the other person and what they will they get out of it.
And now it’s your turn.
What tips do you have in order to create a successful JV?
Take a moment then to share your tips in the comment box below…
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