When deciding to embark on a joint venture marketing partnership, the process is similar to developing an initial business idea. Your new partnership can range from being a simple informal agreement to a rigid contract that is bound by a legal document, agreed upon and signed by all participating parties. Whether you decide to go the route of an informal agreement or a legally binding contract, there are a few things to consider at the outset.
1. Conduct Technical and Market Research
2. Develop a Business Plan
3. Determine Investments and Cost Structure
4. Decide on a Long-Term Organizational Format
The above four tenants are steps you take when initially developing a new business. A joint venture marketing partnership is a new business of sorts and needs to be approached as such in order to get the most out of the arrangement. You wouldn’t dream of launching a new business without having a structure in place to address the above topics, and addressing these issues when embarking on a new phase in an existing business will help make the new venture a success, as well as improve the transition to this new phase of your business.
Conduct Technical and Market Research
It is important to know what your competitors are doing. Conducting even just a cursory amount of research is important. You don’t need to spend countless hours and resources on this step, (though the more research you conduct, the better prepared you will be with your own business structure), but having a pulse on industry standards will help point you in the direction for developing a successful joint venture marketing platform.
Develop a Business Plan
Developing a business plan may seem like a fairly obvious step, but it’s one worth mentioning. You doubtless already have a business plan in place for your company, but since this new phase of your business will affect the structure (and hopefully the profits!) of your existing business, it is important to put the idea into a formal plan.
Determine Investments and Cost Structure
This piece of the partnership will most likely be addressed in the business plan, but it is important enough to mention on its own. What is your cost structure for the joint venture marketing partnership? How will the advertising be handled? What types of advertising will be used? How will the advertising be paid for? These are a few basic questions to consider, and they are important to distinguish because the more parties that are involved in a joint venture marketing partnership, the more difficult and cumbersome these details will be to sort out.
Decide on a Long-Term Organizational Format
Once you have developed a business plan and sorted out advertising and cost structure issues, you will need to decide how the joint venture partnership will be managed over the long term. Will one partner assume responsibility for managing the whole partnership, or will you create a steering committee comprised of members from each company to manage the venture? Implementing a management schedule for the long-term health of your partnership at the beginning of the endeavor will ensure things run smoothly and ultimately be a success.