Joint Venture Definition, Tips, and Examples

Joint venture definition is a relationship between two or more businesses/companies who agree to take on economic activity together. The goal of of joint venture relationships can be different but the point is to make profit together.

Benefits of doing joint venture are as follows:

• Joint venture will allow you to grow exponentially by increasing your market reach. This is doable because you are getting help from other companies to get new customers. For example, if your business is currently exposed to 500 people, by doing joint venture your business will be exposed to 5,000 or even more people.
• Joint venture will allow you to have access to other businesses’ assets; intangible or tangible. By bussiness assets I mean employees, office, customer database, market research, buying power, leads, sales force, testimonials, new products, old products, etc. Anything you can think of. By doing joint venture, you are able to use these assets that are not accessible to you otherwise.
• Joint venture tends to have smaller risk because the risks are usually shared between parties.
• Best of all, joint venture creates win win win situation for all parties involved.

There are 4 most commonly used joint venture models:

• You supply your business’ assets to other business. For ex, your restaurant in downtown area sells advertisement space for local businesses.
• Other business supply their assets to you. For ex, your restaurant has vending manchines that are provided by another company.
• You can be the one who arranges joint ventures between two companies. In this case you are called “joint venture broker” or “jv broker.” For ex, you go to a fitness company and gain rights of their free membership coupons. You can sell these coupons to a vitamin store and let them give the coupons away for free to their customers. The fitness company is happy because they have more free members (more free members = more leads to close to paid members) and the vitamin store is happy they have something valuable to their customers. You make money in the middle.
• You gain rights to a company’s assets and become a certified reseller. For ex, you approach a bookwriter and gain rights to sell his/her book in other countries. You split the profit.

Here is a great tip to start your joint venture deal

• create/find a product or service that is complimentary to a very strong product.

Think about anything that a customer would buy after they buy PRODUCT X. You have to make sure both products are complimentary. Your product must make PRODUCT X better.

If you do this you will close many joint venture deals that will grow your business exponentially.