Companies that build successful joint ventures follow the same systematic process. Although the costs of forming alliances is inexpensive, the cost of not planning out the partnership is far greater in lost profits and failed relations.
1. Set Clear Goals: Know from the beginning what you want to accomplish. Is it reduced product costs, expanded sales, or market credibility? Your partners’ goals may be different but complementary to yours.
2. Find a Partner: The best partnership is based on a mutual win-win relationship. Take the time to locate a business with an honest interest in joint ventures and a similar corporate culture. If your small business is focused on long-term customer relations and your strategic partner cares about gaining market share quickly, then your two cultures may clash.
3. Plan the Venture: Map out your negotiation tactics and understand the legal aspects of the deal. Keep win-win agreement in mind.
4. Manage the Relationship: Once a winning joint venture is formed the real work takes place. A good alliance is like a marriage. It is built on communication, trust and understanding.
Joint ventures and strategic alliances can be a positive outcome for all parties involved. Take the time to understand the process and your small business will be well positioned into the future.
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