Six Joint Ventures Mistakes
Joint ventures mistakes can be costly. Here are some pitfalls that you can easily avoid as long as your are aware of them beforehand.
1. Not taking the time to ensure that your joint venture partner has great-quality products and services and a solid reputation.
When you choose a joint venture partner, it is imperative to choose one that has high-quality products and services as well as a good reputation within the industry. Sometimes, a company may look better on the surface than it really is. Your credibility is at stake if you partner up with a company that has sub-standard products and services or one that is popular for bad customer service. Do your research about your potential joint venture partners and review their products and services before endorsing them as these issues will reflect on you and your business!
2. Offering your joint venture partner too small of a deal
There has to be an incentive for your partner to engage with you, and offering too small of a deal won’t make it worth their time and effort. Remember that endorsers with a large, targeted and loyal client base are the most wanted joint venture partners. They’ll partner with others if you offer a percentage of the profits that’s too low. So make this mental note... if they are worth pursuing, they are worth sharing the profits with.
3. Simply handing over your client list
This can constitute breach of contract with your clients if you have committed to their privacy. You’ve also worked very hard to build your client list, and this forms part of the value you have to contribute to the joint venture relationship. If you simply hand over your client list, you have no point of leverage.
4. Not devising an exit strategy
Even the best of relationships can go sour, or simply not work. Make sure you have an open door to leave the joint venture if for any reason it is not working out.
5. Committing to a long term relationship from the beginning, without testing your strategy first
Joint ventures should ideally involve a trial period to see if profits will show a real upwards trend, or if the idea is a valid one. If you sign a long term contract, you may be stuck in a no-win situation with no way to escape. As with any marketing strategy, test in small numbers first, before rolling out fully.
6. Not having a clear understanding of the roles, duties, obligations of each party in a simple written agreement.
Lawyers are not necessary. All you need is a document that clearly specifies the obligations of each party.
If you feel you are ready for a joint venture or would like to explore the possibilities, please read the article titled ARE YOU READY FOR A JOINT VENTURE? If you think you are ready, go to the Joint Venture Form, complete, and submit. If approved, you will be on your way to riches, instant credibility, and a quick launch of your product.
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