A joint venture is when two or more companies pool their resources and expertise to achieve a specific objective. A clear agreement is an essential part of building a good relationship between joint ventures. Consider the following ideas:
- Carefully plan. Each partnership should start with careful planning. You should review your business strategy before you proceed to see if a joint venture is the best way to accomplish your goals. Analyze both companies ‘ strengths and weaknesses to see if your partner is a good match.
- Communication is a key part of the relationship building. Make sure everyone involved understands the basics of the Joint Venture Agreement as well as the fine details including goals, financial contributions, human resources and expected length of the deal.Arranging regular, face – to – face meetings for all the key people involved in the joint venture is usually a good idea.
- Build confidence. Open sharing of information, especially on financial issues, also helps prevent partners from becoming suspicious of each other. The more confidence there is, the better the chances of working with your relationship.
- Performance monitoring: Everyone needs to know what you’re trying to achieve and work towards the same goals. Clear performance indicators allow you to measure performance and can provide early warning of potential problems.
- Gain flexibility: Even with simple projects, things can become complex with two companies making decisions. A flexible relationship should be pursued. Review regularly how things can be improved and whether you should change your goals.