Joint ventures offer numerous benefits to the parties involved as it is the easiest, most profitable and fastest strategy to earn profit through a small scale business. If this is true then why aren’t all small businesses starting up joint ventures?
Listed below are the commonly mistaken beliefs concerning joint venture marketing:
- High risk of facing financial loss
Most small business owners do not want to face any type of loss and since they are already on a tight budget the fear of money loss is obvious, although it is not possible to lose money when you only require results. In case the partners are buying from you, pay out only in the form of commission. In this way you will be obtaining the revenue prior to paying for the expenses.
Printing of postage letters, vouchers and coupons are the only pre-sale expense you will be incurring and this amount will be spent even if you do not join a joint venture as it is required for general marketing tactics. This shows that it is just a mistaken belief that the risk of loss is fairly high.
- It leads to losing clients
Your customers require other amenities and services so they will definitely purchase them from one business or another regardless of your opinion and wish. Therefore, you can benefit from this deal by recommending a particular business to them and earn profit from the association.
When your customer utilizes the products or services of the recommended company they will experience top-notch quality which eventually increases the strength of your relation. They also benefit from this association as you are saving the time required for choosing a reliable service. Now, they need not experiment with every product of a similar type. Since, you offer these customers discounts or bonus, you are making the deal lucrative by saving their money. As you save both their precious time and money your relations with your client will definitely strengthen.
- Being a part of the joint venture will reduce your profits
Small businesses mostly prefer a struggle to obtain clients than share their profits with another small business. Mediocre profits are none of their concern even if they can gain much more by clients being sent their way by the partner. Joint ventures are meant to minimize or eliminate the risk of money being wasted. For example, when you pay for an advert you cannot be sure that it will definitely generate leads or result in a sale. You lose money when this advertisement fails.
Since, you only pay for results in a joint venture; you can comfortably give away a part of your income rather than wasting it.
- Joint ventures are considered complicated
There are both complicated as well as simple joint ventures. A beginner can start with a simple short-term venture to learn and not face any losses. Major companies which create a completely new business are examples of complicated ventures. Small local businesses need not get into deals like these. You could host small seminar along with your partner, where customers of both parties are invited which eventually leads to profits and more clients.