I’m sure you have heard the term “Joint Ventures”, let’s dig a little deep into how they work and the benefits for your business.
So, what is a joint venture? A commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct identities.
Many business owners are doing joint ventures without even being aware.
My experience for more than 27 years has been in the bakery industry I will share some of the JV’s I have been involved in, keep in mind they can be done with any type of small business, you just need to determine if you share clients, the main idea to remember here is you are not in competition with the other partner, you must complement each other.
We have done sausage sizzles, with our local butcher, displayed flowers in our store from our local florist, tastings at our local gym discussing the health benefits our bread, morning teas for the businesses in our precinct, offered drinks or products to complement our bread, eg. Campbell’s soup with a sourdough.
As business owners, we should be trying to find new and innovative ways to improve our business and increase our revenue. Think about the businesses that may be a perfect fit with yours, it is important you have something different than your new partner otherwise instead of increasing your client base, you may end up sharing them.
By building JV relationships you may be able to open up new markets for you both to enter. It is highly possible if done correctly both should receive additional sales, how high they will be, like anything else will depend on your enthusiasm and output that goes into the process.
You need to think about giving added benefits to the customer right away, this will position you both in a positive way.
Here are seven steps toward your next joint venture.
- Step 1 – Ask yourself a couple of questions, who are your ideal clients and where else do they do business?
- Step 2 – Make a list of these businesses, divide the list into two groups, the businesses you have a relationship with and the businesses you don’t.
- Step 3 – With the list you already have a relationship with, contact them, and explain the benefits your products have to each other, this step is the most important.
- Step 4 – You may need to motivate them and really help them visualize how it will work as they may not immediately see the benefits, be creative with how you do this, allow them to try your product themselves for free so they experience the benefit themselves.
- Step 5 – You must be professional in all your communication and interaction with them because if you partner with them, they will be endorsing your product and putting their reputation on the line for you.
- Step 6 – Do not go into a joint venture to financially gain from it, it must be a shared gain of new clients, which is how you will receive financial gain.
- Step 7 – Go for it, don’t just think about it, take that first step.
Being in business doesn’t have to be hard, you just need to take small steps and watch your figures go in the right direction.
