Joint Ventures can be one of the fastest and surest routes to explosive growth of your business, but it all depends on how well you select and cultivate your joint venture relationships. In my own businesses, strategic joint ventures have allowed me to increase revenues per customer by almost 500% and increase overall annual revenues by almost 400%….. and these results occurred within 2 years and lasted for almost two decades.
So how do YOU find joint venture partners that will allow you to grow your business at such a rapid pace? That is what this article is about…. how and where to find a good joint venture partner. Some potential partners are totally logical and probably should be on your "A" list to pursue first. Others may be more illusive. For those you should review this 7 Hotspots Strategy for finding, pursuing and closing on some of the less obvious joint ventures partners
Direct competitors – Before you call me crazy, let me assure you that some of my most profitable and life-changing joint ventures have been with direct competitors in the same market space as my company. I’m not saying that these types of joint ventures feel the most comfortable or will survive without a lot of care and nurturing. These types of joint ventures will give you sleepless nights and heartburn, but also can be quite rewarding.
A successful joint venture with a direct competitor partner will probably be somewhat parasitic, sort of like misletoe in the top of an oak tree. Oftentimes one partner is stronger or bigger than the other, usually with a more established sales or distribution channel. But the smaller partner oftentimes brings either a unique product or service or a level of agility or adaptablility that the larger partner lacks. Analyze competitors and find ones that could earn incremental revenues or efficiencies if they partnered with you.
Complimentary needs – Most businesses have strengths and weaknesses. Look for joint venture relationships to fill in your weak spots. For example, maybe your strengths are a strong customer list, good distribution channels and a fairly speciallized product line. Your ideal joint venture partner might have products or services that would enable you to stimulate additional, incremental revenues from existing customers and provide an additional magnet for new customers. The joint venture arrangement might be structured as a private label arrangement for one or more of your joint venture partner’s products.
Parallel niche providers – Other companies and professionals are already calling on and selling goods and services to your ideal customers. Seek out the non-competing companies where you both could benefit mutually from the exchange of leads or some form of shared marketing and distribution arrangements. In its simplest form, this might just be a formal exchange of leads and prospects through referrals. More mature relationships might include shared marketing and distribution arrangements.
Complimentary product or service – The best way to explore these joint venture relationships is to put yourself in the shoes of your customer. What else would they want or need if they did purchase your product or service? For example, if you sell custom inground pool installation and maintenance, an ideal complementary service provider might be a landscape company or perhaps an architect. Both parties could benefit substantially from cross promotion and referrals.
Tag along – This type of joint venture typically occurs when one partner, with a large customer list, partners with a vendor of a consumable or somewhat related product. In its simplest form, it might just be a mail insert for your product that is inserted in the routine invoices or correspondence mailed by the partner with the larger list of customers. In many respects, these types of relationships look a lot like a simple advertising relationship, however often they can include partnering characteristics like revenue sharing, cross mailing, and even private label arrangements.
Suppliers and distributors– If you look upstream and downstream from your product or service, you may have ideal joint venture partners in either direction. Take for example this simple possibility: your company sells a unique, branded cleaning compound that is applied with power applicators manufactured by your supplier. An ideal joint venture relationship might involve you offering a private labeled version of that cleaning compound to the supplier of the power applicator to bundle with their power applicator when it is sold to other consumers and manufacturers of cleaning compounds. You benefit from the incremental profits on higher productionline utilization and the supplier benefits from either incremental product sales or a competitive advantage, or both.
CoDevelopment– Sometimes you can get to market faster or with a better product when you partner with another company. This happens fairly frequently in the software development world. Both partners work together to develop a new product or refine or merge existing products. Great care should be taken in the design and drafting of the joint venture agreement to clarify exactly who owns what and when.
Summary – Your ideal joint venture prospects will probably partner with someone…. why not you. If they partner with you, you stand to profit and get stronger. If they partner with your competitor, you stand to lose market share. Get out there and find your ideal joint venture partners.
If you want to jump start your joint venture relationships and avoid some of the many hassles and risks that go hand in hand with joint ventures, you may want to work with an experience guide, like us. We can shortcut and accelerate your joint venture search and help you avoid the pitfalls and risks. The right joint ventures can truly mushroom your growth and profits…. let us help you make it happen. Just submit a joint venture contact form so we can talk.
