One of the popular ways we’re taught to grow our business is via Joint Ventures i.e. you partner with someone that will help you tap into a new pool of customers or expand the services you offer. By partnering with someone you can benefit from their resources and ultimately grow your business. It’s a win win situation.
But hang on there just one second – have you ever considered that some partnerships can actually damage your business? And I am not talking about the obvious things like reputation, ethical conduct and standards of delivery.
All too often I come across people who are working very hard for very little money and have a large number of ‘projects’ on the go that are sucking up all their time. They have met people while networking and recognised a common theme to their ideal services and market, and decided that partnering together will help them grow their business.
Continually I am approached by people wishing to do Joint Ventures with me and honestly I turn down 90% of them. My reason is because my business is new and 90% of my time is focusing on selling my core product offering and finalising it for market (including establishing a robust sales strategy). Many of the offers are for short term projects that will distract from my long term objectives.
When I began my first business in 2006 I was eager and always very willing to partner up with someone if it meant building my business quicker. However, I partnered with others in a similar position to myself who had yet to formalise their sales process and have a solid business. The result was that each of our projects distracted us from our core business function and neither of us made any money. Eventually we’d both move on to focus on the next thing that was sure to make us money. Ultimately we wasted a lot of time and resources.
What I learned during this time was that sales (bringing in a stable income) is the most important thing in business. Unless the joint venture is going to contribute directly to my bottom-line I might as well forget it. And if it isn’t going to promote or re-enforce my product line as it currently exists, I might as well forget it.
I believe the majority of people out there who claim they have no time and are working on ‘projects’ are mostly wasting their time. These projects will send them broke. As a new start up, the majority of your time needs to be focusing on finalising and selling your current products and services. Only when you have a proven business with a solid sales system that meets your monthly income target regularly can you effectively do a joint venture.
In conclusion a good joint venture is one that compliments and aids you in selling your core product and requires little or no time to implement. It should contribute toward solving your clients ‘central problem’ or help you reach your target market easier. Any thing else is a distraction.
The ways to spot a bad JV
1. You have to put in many hours of unpaid work to establish it
2. You don’t have a proven market that wants these products
3. The work is distracting you from your core business function (selling!)
4. You’re working with someone who doesn’t have a proven business history or proven sales skills
Ways to spot a good JV
1. You’re both in the same market with complimentary core products/services
2. Coming together requires very few additional hours of work
3. You have a proven market with clients ready to buy what you’re offering
4. Partnering with them focuses you 100% on creating more sales and following a proven sales strategy.
Example of a Good Joint Venture
Within my first week of going into business 6 years ago I was lucky enough to tap into a joint venture with a successful sales man who bolted a free coaching session with myself on to his original product offering. This immediately boosted his competitive advantage and his perceived value in his clients eyes. For me this gave me a constant stream of warm and motivated leads to follow up on. I closed 60% of the leads I received which were a welcome boost to my new business.
This joint venture was successful because the partner was a pre-established business with a proven sales history, all I had to do was present my core service to his client and pay him a commission.
What do you think? Have you a joint venture success story? Do you agree with what I’ve said or strongly disagree? Share your thoughts.