Entering into any business alliance is a risk for you personally and for any business you are managing or representing. That’s why it is crucial that you take the proper steps to minimise that risk, or at least enter into any partnership with open eyes. If a joint venture is on the horizon for you, read on for an overview of things to know before signing those papers.
1. Know who you are working with
Before you make a move, ensure you know exactly who you are making an agreement with, who you will be working with and who the prominent behind-the-scenes people are. Dealing with a friendly representative is all well and good, but you don’t want to find yourself committed to working directly with someone whose personality clashes with yours or whose tactics or reputation won’t be good for your business.
2. Learn the business’s history
If you will be sharing resources with another entity, common sense dictates that you should know everything about their past. Have they struggled to hold senior staff? Are there any financial or legal hardships you should be aware of? It might feel like an overwhelming amount of research for you to undertake, but if you approach a specialist company like GlobalX Legal Solutions, they can help you with software to carry out a company search and an ASIC search to get this information. Visit their website if you want to find out more about how they can help you.
3. Determine the terms of your agreement
This is where things start getting interesting: contracts start getting sent around and it is vital that you hire a solicitor who handles business contracts to ensure everything is in order. Make sure you use this time to negotiate the terms and conditions of the venture. Be an advocate for yourself, because you know any other business entity will do their best to secure ideal terms for themselves as well.
4. Spell out which roles and responsibilities each party will fulfil
While this may go hand-in-hand with the previous point, make sure everyone knows exactly what their role is. Set out expectations in a clear and concise manner, and ensure they are communicated to each relevant party. If you refuse to perform certain tasks, or want to be responsible for a certain aspect of a project, speak up before you enter. If you communicate clearly now, disagreements can be sorted out before the stresses of working together take over, and you can take the easy way out if resolutions cannot be reached.
5. What’s in it for you?
This item could easily constitute points one through five in this article, because the key to any venture is to investigate the other party and negotiate conditions that suit you. If you can’t provide justification for your decision quickly and easily, it may be a good idea to carefully consider the question, “what’s in it for me?”. The benefit may be outright financial gain or something less concrete such as exposure to new markets or opportunity to get experience you wouldn’t otherwise be able to obtain. Ensure you feel the benefits are enough to make your joint venture or alliance worthwhile.
Joint ventures and partnerships can be greatly beneficial to both parties if everyone communicates well and explores every aspect in detail. By engaging professional services to help you along the way, you add extra layers of security to your alliance or joint venture and help minimise the level of risk.