The Vital Point of Joint Ventures

So you're going to take the plunge and start a joint venture. Excellent! As long as you consider the details and think it through as if it's a whole new business, your new venture could mean exponentially greater profits for you!

The key to creating a truly successful JV is to take the time to thoroughly plan every aspect of the partnership. And, you need to get everything -- and I do mean everything -- in writing. Those written documents are essential to getting started on the right path to success, staying on the path, and safely stepping off it if necessary.

There are three written documents that are necessary for every joint venture: 1) a joint venture agreement; 2) a business plan; and, 3) an exit strategy.

The first document, the agreement, is really a contract. You and your partner will create a legal document that outlines and defines the entity you are forming. It will list the goals of the venture, each side's responsibilities, how long the JV is expected to last or the circumstances that would lead to its demise. It also will cover how revenues and profits will be split, and everyone will want to know that up front.

Because this is supposed to be a binding legal document, each party will want to have his or her lawyer review the final copy before anyone signs. You might even want to enlist legal help in writing the documents. Ensuring it is legally viable will protect everyone's interests.

If you do decide to go it alone and create your own original contract, it's a good idea to consult the Web for templates and tips and hints. The vast amount of information you will need to cover, plus all the foresight you must have into any eventuality makes it easy to miss some things.

The business plan absolutely requires the participation of both partners. The plan is the document that spells out the goals of the JV, how you'll get there, and what both partners bring to the agreement, among many other important aspects. Your business plan will also be used to acquire funding, such as loans or investments, if they're necessary.

Even if you are flush with cash and don't need external funding, it is absolutely vital that you write a business plan. You and your partner will refer back to this document time and again when you are reviewing your progress and planning your future. You can also look to the business plan to watch the progress of your day-to-day operations, such as management, human resources and communication strategies.

Many new businesses and JVs choose to hire a professional writer to help them put their ideas into a cohesive order. Business plans are long and complicated, but they must also be organized so that you can follow them later. Professional writers can be found online, and some specialize purely in writing business plans.

Sadly but truly, you will also need an exit strategy. Don't worry, you aren't condemning yourself to failure by thinking about how it might end. The average joint venture lasts about seven years, and they end for a myriad of reasons. Your JV might have an expiration date when you write your initial contract, or someone's circumstances may change -- you might win the lottery! You just never know.

A good exit strategy protects your investment in the JV. For example, if you bring a trademarked item into the partnership, you'll want to make sure you walk away from the JV still holding full rights to that item. Or, if the business that results from the JV is to be sold, you'll want to ensure you get your proper share of the profits.

Basically, the exit strategy simply assures that each party gets what he or she is owed when the partnership ends. It will list a specific set of circumstances as well, which, if they were to occur, would result in the end of the JV. Due to the legal nature of the document, and the possibility of someone getting upset over a misunderstanding, it is advisable to have legal council take a look before you sign.

When you put your joint venture in writing, you prepare for your success and insure against losses in the event of failure. Having these written documents on hand from the start shows your commitment to the business, gives you a clear path to follow, and helps you and your partner remain on track. And, when the JV ends, you'll know exactly what each partner walks away with -- without a complicated, nasty legal hassle.

To learn more about Joint Ventures and Joint Venture Contracts visit the writer, Justin Bryce, at his website: www.lazy-internet-marketing.com/bm/joint-ventures.ag.php

Article Source: http://www.wellnessarticlelibrary.com

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