Caution: the Choice of Partner is the Most Vital Part of Starting a Jv

A joint venture (JV) is the entity created when two businesses join in a partnership for specific, often strategic, reasons. JVs can be a fantastic way for small businesses to increase their customer bases, and for businesses to share their skill sets to offer new or better products and services. However, in order for a JV to be successful, it's essential for both parties to take the agreement very seriously and do all of the homework involved.

A joint venture entered into without research or caution is setting itself up for failure. If both parties don't take the process seriously they could lose valuable time and money, or worse destroy their business. To avoid these pitfalls, there are several things one can consider: choose your partner carefully, make sure you share a common goal and above all, stay organized.

The choice of partner is the most vital part of starting a JV. You should know the person well enough to have confidence in them and to know whether they are trustworthy. There are plenty of fast talkers out there who are eager to separate a fool from his money. As with everything else in life, if it sounds too good to be true, it probably is.

If possible, do a little research on the person or company you're considering partnering with. Look at their past business relationships and ask for references and a resume. It's best to ensure that they will deliver on their promises before entering into a contract.

On the other hand, while it is good to know your partner well, it could be disadvantageous to know them too well. Entering into business ventures of any kind with friends or relatives can be a risky proposition. If things take a turn, you could lose both your business and a valued personal friendship. It can also be tempting to skip vital parts of the process when you partner with friends. You might overlook a formal agreement, and later discover you had completely different goals and visions of the JV.

Just like in a marriage, it's good to look for a partner that balances your prominent traits. Maybe you're good at keeping financial records, but you have trouble thinking of creative marketing campaigns. Look for a partner who can add some pizzazz to your joint venture. In turn, she might not be the best bookkeeper, so your skill set will compliment hers as well.

Determining that both you and your JV partner share a common vision is another important aspect. To reach a particular goal together, you must both know what the goal is and understand how you're going to get there. If your partner believes the goal of the JV is to grow the business to a very large one, and you believe the goal is to keep the business small so you can run it on the side, you're not very likely to work well together. You can't possibly reach both your and your partner's goals because they conflict!

Good organization can help ensure that your and your partner's visions match. To begin, create a business plan that clearly defines what you want to achieve and when you expect to achieve it. The plan also explains who will bring which assets and skills to the table.

Along with a clear business plan, it's important to draw up a binding contract that outlines the legal details of your JV. This agreement will articulate the legal responsibilities of each party.

Establishing a successful JV also requires that you organize your time. Don't spread yourself too thin. Understand that a new business takes a lot of time and energy. Don't expect to be able to focus on two projects at the same time. Choose a time in your life when you have enough time, support, and resources to really focus on the JV.

With the right partner, shared goals, and clear organization, a joint venture can be one of the best means of increasing your company's size, skills, and customer base. Just make sure you spend time learning everything you can about how the joint venture will work for you, who your partner is, and how you can reach your goals together.