Evaluate Your Joint Venture to Get the Best Deal

1. Evaluate Your Joint Venture to Get the Best Deal The joint venture is one of the strategies used by companies to gain access to new technologies or step into new markets. Big companies often form joint ventures with smaller firms to bring in innovation to their business by outsourcing their research & development efforts. In today’s world of extreme competition, it is not possible for a single company to do everything on their own. With a plethora of existing ideas out there, entering into a joint venture is a great way to get access to novel technologies and new markets before anyone else. However, before you take the plunge and enter into the joint venture, make sure to consider the following tips to ensure that it makes sense for your particular business. And if you are still unsure, take the help of experienced joint venture consultants to evaluate the deal for you. Define Your Terms Joint venture is often confused with ‘strategic alliance’, which is actually a different relationship altogether. Joint venture is basically a relationship in which two or more parties come together to achieve a particular goal in such a way that the sum of their efforts is greater than the parts. For instance, a company developing exoskeletons for astronauts to lift heavy objects in space may enter into a joint venture with a company with experience in selling stuff to the military, which probably would be interested in exo-suits for soldiers. Entering into this joint venture would be beneficial for both companies as it would make it easier for them to sell their goods in a shorter span of time which would otherwise have taken years. Evaluate The Potential Partners Before venturing into a joint venture, it is very important to carry out some due diligence on the potential partner. Get some information about their past joint ventures and how the arrangements worked out for them. Also make sure that your business goals are in tandem with the goals of your potential partners to avoid any mess in the future. Evaluate the Potential of the Business Just because a company with known customers and recognition wishes to partner with you, doesn’t mean that they would be good for your business. Ask yourself what things you would have to give up after entering into the joint venture. Oftentimes many companies give up significant profit and revenue opportunities just to partner with some flashy companies and end up blowing their business apart. Make sure that the deal furthers the mission and objectives of your company and then only make the move. Choose Your Structure After evaluation, if you find that the joint venture will be positive for your business, you can structure the deal in two ways: by contract or by developing a distinct entity. For example, if both the companies are bringing in assets with a goal to develop a brand new technology, it would be a better idea to enter into the joint venture using a separate new entity. On the other hand, if you are just coming together to work on a particular project, you can simply draw up a contract and get on with the work.

2. Hire Experienced Joint Venture Consultants To make sure that there are no issues in your joint venture in future, consider hiring a firm offering joint venture consulting services. Having experience regarding putting together such deals, they can evaluate the different aspects of the joint venture to ensure that it is the right fit for your business. They can also help you to draw up contracts and fulfill other requirements in regards to the upcoming joint venture. There are a few excellent joint venture consultants in India that can help you with this task. For more details visit - http://huconsultancy.com/solutions/joint-venture/