A JV partnership is a joint venture where two different businesses join up to work on a particular project together. They do not become one business entity; rather they stay separate through the JV experience and after.
There are many advantages in having a JV partnership. At the same time, here are some common mistakes that you’ll definitely want to avoid.
* Not Having a Contract – So many people get involved with JVs without a contract and this is a huge mistake. If you have no control over the purse, the domain, or the intellectual property, you could end up being left out from the profit too.
* Not Having a Clear Delineation of Duties – Each partner in the relationship should have some type of duty or responsibility. There are cases of silent partnerships where one gives their name, their list, or some funding in exchange for a split of the profits, but everything should be spelled out specifically. If you want one person to deliver a specific amount of work each month, say so.
* Giving Up Too Much Control of Your Brand – In a joint venture, sometimes one person is in control and in charge. However, you want to keep an eye on your brand so that you don’t give up too much control over it.
* Unrealistic Expectations – It’s easy to get excited about a joint venture, but don’t place all your hopes and dreams into a single venture. You never know what can happen, but you need to have contingency plans.
* Entering into Partnership with a Competitor – It’s a bad idea to enter into a JV partnership with someone who is a direct competitor. Instead, try to find people to work with who market complementary goods and services to your audience.
* Not Planning an Exit Strategy – Most JV partnerships don’t last forever. Therefore, you should write into the contract how long the relationship will last and how it will end. Planning everything in advance usually works better than just letting it dissolve on its own due to potentially having different expectations.
* Not Offering Something Valuable to the Partnership – If everyone is to be satisfied in the partnership then each person needs to contribute value to the partnership. Everyone will feel better and it will cut down on resentment.
* Trying to Hook Up With Someone in the Wrong Niche – It’s hard sometimes to differentiate between working with someone who offers complementary products in your niche and someone who is in an entirely different niche. But you need to stick to what you know and only enter JV partnerships within your niche.
When you enter into a partnership, it’s more important than ever to cross all your T’s and dot all your I’s. Don’t be afraid to ask for a better contract or better terms when working out the initial phases of the JV relationship. If you’re setting it up, don’t have a “me first” attitude about the situation. Instead, find a way to make the JV a win-win association for everyone involved so that everybody can contribute talents and benefit as equally as possible.