Joint ventures are an extremely effective way to grow your business. However, it is extremely important for all the partners to be specific on their respective objectives when they draw up the joint venture agreement and then build and execute a plan that achieves these objectives.
Many people consider joint ventures as a way of establishing their business, particularly if they are having difficulty getting the business off the ground. A joint venture business plan that is executed properly can work wonders for any business at any stage of its evolution.
To help you decide if this type of business partnership would be effective to help you grow your own business it is important to understand the basic types of business venture arrangements that you can use, as these both function in different ways.
Put simply, a joint venture simply means two or more companies working together to achieve a common goal or purpose, and the key element in any such business partnership agreement is the accomplishment of agreed objectives for mutual benefit.
There are two basic types of joint ventures that you can aim to set up, depending upon your business objectives.
Co-ownership
As the name clearly suggests, in a co-ownership agreement both the parties are owners of the business partnership, usually in equal proportion but the ownership can be for different percentages depending upon the contribution of each party to the arrangement.
Suppose you and your friend are partners in a co-ownership venture then both of you will have a legally agreed initial investment and share in the business and are entitled to share the profits in the same proportion.
Running a company with dual or co-ownership can give rise to some operational difficulties at times so it is important for each party to be specific about the details of their involvement in the business partnership agreement right at the outside. By doing this, it is very possible to build up a very powerful business where all parties benefit.
Promotion Only
This concept is hugely popular in the world of Internet marketing. In a promotion only joint venture plan, your aim is to find hundreds or even thousands of online partners who will promote your product, your services or your entire business on their websites, to their email marketing lists, or on other sites across the Internet. In return, when your business makes a sale, a pre-agreed amount or percentage of your sales price or profit is paid out to your partner.
This type of business partnership arrangement is generally referred to as an affiliate program and has been the route to success for many online marketers over the years. As with all joint venture arrangements the businesses that become most successful are those that treat their partners well and are very clear about the benefits of promoting their product or service.
If you want to be extremely successful with a promotion only business venture your key goal is to make sure that you maximize the earnings payable to your affiliates for the visitors that they send to your site, to encourage them to keep promoting your offering.
Both the co-ownership and promotion only joint ventures offer great potential benefits to business owners so long as these are well planned and properly executed. It requires acting with honesty and integrity when you start your business and building a successful business partnership is exactly the same. If you follow this approach, you will be able to find many ways to use joint ventures to grow your business.
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