The most difficult aspect of a joint venture is convincing your potential partner of the merits of the deal. After acquiring a JV partner one needs to communicate well so that a solid business plan can be formed. If the plan formed is lacking in any manner the venture will not be successful.
The plan created for your marketing joint venture need not be a booklet complete with all the details similar to the one created for acquiring funds or loans. It is better to have a comprehensive plan so that you can put the strategic plan into action soon, with the details guiding you in a better manner. However, it is not necessary that the business plan be lengthy it could simply be a one-page document containing a point-by-point outline of the strategies.
Goal of JV marketing
The first step in creating this business plan is to clearly specify each partner’s goal. Goal for all the parties involved need not be the same. While you might be looking to broaden your marketing base your partner may be trying to improve revenue by sharing expertise and technology. The goals should be spelled out clearly so that neither you nor your partner faces any problem and misunderstands the other party’s reason for being in the deal.
Assignment of duties
What will your functions be? What duties will your partner perform? In order to avoid any confusion it is better to put each party’s duties in black and white, so that you can effectively reach your goal.
In what proportion will you and your joint venture partner be splitting the expense? Is your business venture so big that you might require a loan from a financial institution? You need to determine in advance how you and partner will be funding and dividing the expenses. Both might be willing to put in an equal amount into the JV so that the venture can start. Regardless of who takes care of the funding; ensure to clarify how much each one of you is willing to contribute and how these expenses will be shared.
What resources will be required to make your joint venture successful other than money? Will you be providing some sort of expertise through your employees or will your partner assist through the distribution network established by his/her business? Be specific how the resources will be allocated so that you can succeed effectively.
Division of benefits
How are you willing to divide the profit in a 50/50 ratio or 70/30? Depending on resource allocation and contribution of each party you should split the profits. The ratio for division should be known from the beginning of the deal to avoid problems.
Create an exit strategy so that both you and your partner know the duration of the joint venture. One of the parties might just be looking for a deal till a particular event or the deal might continue till both parties agree to end the agreement. Ensure to have a clear understanding of the duration of the deal so that your joint venture can be wrapped up without any hard feelings between you and your partner.