Are you considering forming a joint venture to explore how it can benefit your business? The next step is finding and approaching the right joint venture partner.
Finding a JV partner is almost like choosing a business partner or even a spouse. You’ll be working together, making decisions together, negotiating, and sharing in the chores of getting the JV product to your customers. For the best outcome, it is important to find someone with whom you have synergies.
Here are a few pointers at finding and approaching a potential JV partner:
Take Names
Don’t just pick one or two people or business owners with whom you’d like to work. It’s perfectly acceptable to pick your top three, but create a longer list of potential JV partners and consider how a joint venture could benefit both businesses.
Form a Plan
It’s fun to hear about the “BIG” business ideas that are created on a cocktail napkin during happy hour, but that is a very rare instance. In almost any case, you need to have a plan to present to your potential partner. List all the benefits. Show projected financial figures, and use visual aids. Making a well-prepared presentation is 90% of the work in convincing a potential JV partner to go along with your idea.
Be Enthusiastic
You’ve agreed to have drinks during happy hour and present your plan. Don’t just wing it and “um” and “uh” through a spiel. Know your speech, practice it, and then share your enthusiasm about the project to your potential partner.
“Show Me The Money”
What does a potential JV partner want? Not a lot of work! They want to know how your idea will benefit them, so show them he list of benefits. Detail projected financial figures, including the profit share between the two of you. If they can see how they will benefit, they’ll be much more inclined to agree to a deal.
Get It In Writing
Never form a JV partnership on a business handshake. Always write down specifically what is expected from each partner, what will be contributed in supplies and labor, and especially how the profits (or losses) will be split. With a detailed written agreement there will be no confusion or “but you said” in the future.
