You've decided to enter into a joint venture (JV). That's great! If you think it through carefully and take the time to treat it like a brand new business, your JV could help your business grow exponentially.
The key to creating a truly successful JV is to take the time to thoroughly plan every aspect of the partnership. And, you need to get everything -- and I do mean everything -- in writing. Those written documents are essential to getting started on the right path to success, staying on the path, and safely stepping off it if necessary.
These are the three essential documents every joint venture must create: 1) a joint venture agreement; 2) a business plan; and, 3) an exit strategy.
The joint venture agreement serves as your contract between your business and your partner's. In order to create the separate entity you're forming through the JV, you must have this legal document. Its purpose is to explain the reasons you're entering the joint venture, each parties' varied responsibilities, the length of the agreement, an outline of management, how expenses and profits will be divided and when and how the JV is to be dissolved (or under what specific circumstances it would be terminated.)
Because this is supposed to be a binding legal document, each party will want to have his or her lawyer review the final copy before anyone signs. You might even want to enlist legal help in writing the documents. Ensuring it is legally viable will protect everyone's interests.
If you do decide to go it alone and create your own original contract, it's a good idea to consult the Web for templates and tips and hints. The vast amount of information you will need to cover, plus all the foresight you must have into any eventuality makes it easy to miss some things.
Both parties absolutely must be involved in creating the business plan. This will be the map that shows how to reach your goals, what you and your partner are bringing into the agreement, how and where the JV will be set up, etc. The business plan will also outline how you will get loans and other funding if necessary.
Even if you are flush with cash and don't need external funding, it is absolutely vital that you write a business plan. You and your partner will refer back to this document time and again when you are reviewing your progress and planning your future. You can also look to the business plan to watch the progress of your day-to-day operations, such as management, human resources and communication strategies.
Many new businesses and JVs choose to hire a professional writer to help them put their ideas into a cohesive order. Business plans are long and complicated, but they must also be organized so that you can follow them later. Professional writers can be found online, and some specialize purely in writing business plans.
Sadly but truly, you will also need an exit strategy. Don't worry, you aren't condemning yourself to failure by thinking about how it might end. The average joint venture lasts about seven years, and they end for a myriad of reasons. Your JV might have an expiration date when you write your initial contract, or someone's circumstances may change -- you might win the lottery! You just never know.
A proper plan for an exit strategy will protect both partners' assets and trademarks. If you brought a trademarked item into the partnership, you want to make sure to leave with that trademark intact. Even better, if you decide to sell the JV for a profit, you want to make sure the profit-sharing details are square from the start.
The exit strategy will line out in definite terms what each partner will leave with. Most exit strategies also include a list of possible events that would lead to the dissolution of the partnership, such as meeting specific goals, a rise or fall in the economy or a sale of the JV. Again, since this document is legally binding, it is advisable to have a lawyer peruse it for errors or things you might have overlooked.
When you go about it the right way and put all these aspects of your JV in writing, it will ensure that you walk out of the agreement with everything you had when you walked in. Creating these documents also reveals a sense of your professionalism and commitment to success. Most important, they will keep you and your business partner from fighting a nasty legal battle if and when the partnership is over.
Article Source: http://www.artsymmetry.com
This article is written by Justin Bryce, founder of Lazy
Internet Marketing. Justin Bryce has used Joint Ventures
that helped him earn $23,457 in just 14 days. Now, he's
giving access to his Joint Venture training system for free.
www.lazy-internet-marketing.com/bm/joint-ventures.ag.php
Please Rate this Article
Not yet Rated
