How to make your Joint Venture a success?
Joint ventures can go one of two ways. They can either end up being a complete and utter failure, down to a poor partnership between both parties, or a massive success thanks to a fully working relationship.
Over my time in the property industry, I have experienced poor and successful joint ventures. And, trust me, to make your JV worthwhile, you must do your absolute best to make it work. There’s no point relying on your partner to do all the legwork and simply expecting a big payout at the end of it.
That is why I have put together the top 5 things to remember to make your joint venture a complete success. It is vital that you should be fully informed before launching into a partnership, so take note of the following:
- Due Diligence
Before getting in contact with a potential joint venture partner, you must do your due diligence. Knowing who you’re getting involved with will only serve to benefit you in the long run. If there’s a slight chance that who you’re partnering with isn’t who they say they are, then look elsewhere.
As a joint venture business owner myself, I’ve always seen to it that I am as transparent as possible. There are times when we have to hold our cards close to our chests; but, to gain trust with others, being truthful is crucial. And that is key to good partnerships.
So, before you do anything else at all, make sure you truly know who you’re dealing with!
- Valid Agreement
Now you have a solid understanding of your potential partner; it’s time to get in touch with them to sort out a number of agreements. Look at it as a business contract and get it in writing.
Although it’s not legally required to get it in writing, it is good practice to do so as it makes sure both parties are focused on the task at hand and are both committed.
The performance criteria, investment amounts required from both parties, timespan and exit strategy should all be set out as well as anything else which may be important. Doing so will give you a clear vision of what is expected from each other for the joint venture to work.
- Perfect Alignment
Take note that your end goal must be realistic and in line with your partner’s. If one party has far greater expectations than the other, then there is no way it will work. On the other hand, if both of you are similar in what you want to achieve, chances are it will be a huge success. Never, ever go in with the idea of doing as little as possible. That will never happen.
Instead, you should be as cooperative as you can be. Then, when the ball gets rolling and you’re enveloped within the project, you’ll build that trust and start to be perfectly aligned with one another. From here, you’ll find value from the arrangement initially agreed in the first place.
- Complete Flexibility
In a joint venture, both parties have to be flexible. Any issues that arise must therefore be dealt with by either you or them. If not, this could cause friction and lead to failure down the line.
Say there’s been an issue on the property development site that has added extra costs to the overall budget. There has to be an agreement of sorts that states both parties share the responsibility no matter who’s at fault.
Any risks that arise due to you or your partner’s actions must be shared as it is a ‘joint’ venture, after all. There must be a plan of what is to happen following such incidents.
- Ongoing Development
Finally, you and your partner must work together to develop the partnership both in how you work strategically and personally. Solid communication is necessary as you cannot find success without it. If one person is in the dark about something, the trust will be broken.
Aim to meet objectives regularly. Doing so will ensure that you develop soundly. Not doing so will indicate to your partner that nothing is happening or no progress is being made.
Having the drive to succeed and grow will only rub off on your partner, motivating them to either match or better you within the joint venture. A bit of competition never hurts anyone, so try and integrate that within the partnership’s core. It will lead to greater results consequently.
- Where to go next.
If you would like more information on our joint venture agreements, then please do get in touch. Send your queries to firstname.lastname@example.org, and we will reply as soon as possible. We hope to hear from you in due course and welcome your interest!