How to use joint ventures to your advantage

The benefits of joint ventures and partnerships

We know that there are many reasons why you should consider doing a joint venture, and that you might be thinking “where do I start with this?” Joint ventures or strategic alliances don’t need to be complicated or difficult in any way. You can simply start by committing to understanding and knowing exactly what the needs of your current clients are. Then once you think you have that, you can expand to know the needs of your prospective clients. Beyond that, you can embody this curiosity and create a picture including the wants, needs, problems, and opportunities of the entire marketplace.

Future focused

A strategic business owner isn’t thinking about today, or tomorrow. They are thinking about the next six months, the next year, the next five years and beyond. They need to have a good understanding of not only what they are facing now, but what they are going to face in the future. The distinction between seeing a business that is successful over time is that it is able to recognize what the needs of the marketplace will be beyond today. The ability to meet the future needs of the marketplace by getting ahead and positioning themselves either through joint ventures or through their own business.

Needs, wants, and opportunities.

If you have a client base, you have an opportunity to examine and deduce what they are looking for, what they might want and then ask yourself whether this is something that you can do?

What are my clients or my prospects buying immediately before they enter into a purchase with me?

Some examples of this could be:

• Buying a device such as a TV or laptop before getting a Netflix subscription
• Paying for a home inspection before putting an offer on a house
• Pay for a home service before another (get blinds fitted and then get painting done)

What are they buying immediately after a transaction with me?

Think about some examples of this could be:

• Buying car insurance after purchasing or leasing a car
• Buying home insurance after purchasing a home
• Buying coffee after purchasing a coffee maker

What is it that they are buying around the same time as when they are buying from me?

Some examples of this could be:

• Buying kitchen flooring and cabinets
• Buying a desk and office chair
• Buying a TV and wall bracket or stand

In any case, it might not be something that you yourself are able to provide, but if you at least build the awareness in, you can spot opportunities or seek them out. It’s an opportunity for you to either joint venture, form a strategic alliance, develop another business entity, create a referral scheme, or create another type of incentive for your client base.

Your unique value proposition.

Focus on what it is that you do well and leverage that in your market and as far as you can. What is the unique value that you bring. If you can identify this and find a way to get the message across to your clients and prospectives, then your competition will become far less significant, and you will emerge as a strong, unique player. Examples of unique value propositions could exist in in these aspects about your business:

• Combination of products and services
• Experience
• Price
• Location
• Client service quality

Find that somebody.

Recognize that someone else already has access, influence and in many cases, authority to the market that you want.

You can ask yourself, “Who do you know that has that resource? Who do you know who has that expertise?”

Rather than cash, most business owners would rather have the ability to go and acquire something to invest and propel their company forward so that they can improve their outlook and earnings in the future. They want to grow. Whether that is spending more on marketing, expanding to a new product line, updating the software they are using, there will always be something that they want to obtain to move up in the world of business. 

Instead of thinking that you have to raise the capital to achieve all of these advancements, why not consider who in your network has already got the capability to provide this for you? What capability do you have that could be of use to them, or how would you make the alliance mutually beneficial? If you were able to access the market that someone has already invested time, energy, money, sales, advertising, marketing, and everything else in creating, would you say yes? It could be an endorsement, a referral, a telephone number, website post, QR code, a place in the catalog, an advert in the window – all at a low cost without the need to spend hundreds or thousands of dollars on advertising. You’d have the ability to create extra market share, further transactions, and relationships without having to invest the money.

Style your approach.

There are many ways to approach a joint venture, however some are more effective than others. These are some of our tips on what you should do to foster the best chances of securing a successful alliance.

let go of the terms of the joint venture or strategic alliance that you are trying to secure and focus on the common goal of what you are trying to achieve. It’s better to put greater energy toward the relationship that is going to make this possible rather than the transaction or deal itself. Transactions are a short-term focus which can generate revenue but the transaction itself hinges on the quality of the relationship which is hopefully long-term. A long-term relationship, and one that is based on respect, value, and integrity could result in multiple transactions, deals or otherwise. The value of the transactions will be long-lasting if the relationship is too. The relationship provides the foundations for all business agreements and should therefore be the number one focus.

You should aim to start with simplicity and leave the complexity till later when you can grow, adapt, and expand the business alliance. If you start small, you can scale it and if you can scale it, then you are more likely to be able to sustain it.

Try not to use buzzwords or go in guns blazing ready to throw a deal on the table. Think about how you can approach in a respectful, measured way that comes from a point of understanding for the mutual pain points and therefore, benefits that will come from the venture. People tend to have a preconceived idea in their head about certain buzzwords. Even the concept of a joint venture may be lost with someone if they haven’t heard of it before, or worse if they have a negative judgment of it. There are some people that could recognize joint ventures as being something that large corporations do, know of an example where things went badly and exploited one for the other. Be aware of this as you think about bringing up the subject. You have the ability to use different words and terminology to define your strategic deal or alliance as you wish. Therefore, you can call it what you want. It may help people soften the idea. It’s better to describe what you want to achieve rather than going in with cold hard facts, business terminology, or pressure in any case.