Joint ventures offer powerful ways for businesses of all sizes and types to grow their customer base and success. The strength of the joint venture lies in the partnerships formed.
A joint venture is an agreement between two business owners or entrepreneurs working toward a business goal together. For joint ventures to work, you must find the right partner and ensure the contract outlines both parties’ expectations and needs.
Questions to consider when looking for a joint venture partner
The right joint venture partner is someone who has skills and resources that complement yours. A good starting point is to take inventory of your existing suppliers and clientele. Some questions you can consider to help point you in the right direction include the following:
- Do they have the same vision and goals?
- What is their reputation?
- What is their financial status?
- What are the business’s marketing and production performance like?
- Have they entered joint ventures with others?
Legal considerations related to joint ventures
Sometimes, the idea of a joint venture is confusing since there is an element of independence and collaboration. While you can form a joint venture with any company for a set purpose, you do not have any legal responsibilities to your partner beyond the contract you form when creating your joint venture.
Protecting your interests
Having a joint venture agreement or contract will protect both parties. It will also ensure that everyone knows what is expected. Knowing your legal rights and responsibilities when forming a joint venture will help ensure you get the best outcome for the partnership.