You heard that the fastest way to increase your client list, your market reach and your income is through Joint Ventures
- You want to do a joint venture but don’t know how
- You heard about the failures and don’t want to be one of them
- You don’t approach a prospective partner because you fear rejection
The 2 BIGGEST mistakes that lead to failure in a Joint Venture are:
Because you may later discover there are too many differences between your personality style, your vision, your values, your priorities, your end goal. These issues or others cause a breakdown in your relationship leading to dysfunction and breakup of the joint venture. This can be prevented. Keep reading!
2-‐ not discussing the details of your joint venture and writing your decisions
Because memories fail, misunderstandings abound about who said what; who promised what and all of the details that must be discussed, decided upon and recorded.
Sound simple enough, but very few do it – Why Not?
• They don’t know they should
• They don’t know how to write it
• They don’t think that a joint venture is a business
• They think their joint venture is too small and time limited
• They put it off for another day and never get to it
• They think their partner will be insulted because asking to write it means a lack of trust
• They think they need a lawyer to do it and they don’t want to pay
• They assume that everything is obvious and that are both/all on the same page
HOW IMPORTANT IS ALL OF THIS TO MY JOINT VENTURE SUCCESS?
Let me share a couple of stories.
TWO COACHES AND A JOINT VENTURE GONE
Two coaches, Gloria and Brenda decided to collaborate on a joint venture. They each had clients who could benefit from their complementary businesses and each others expertise. It seemed like a good fit.
They put together a series of teleseminars and emailed the invitation to both of their lists. Each had the intention to build their lists, help as many people as possible and ultimately sell products.
After the teleseminar series they each went their separate way, but Brenda continued to offer additional teleseminars of her own and an ebook format that included Gloria’s intellectual property as if it was her own creation.
This was shocking and hurtful to Gloria, who rightfully felt robbed of Intellectual Property by Brenda. Bad will and feelings of betrayal lead to hesitation by Gloria to ever become involved in another joint venture.
This situation could have been prevented in a written agreement. Perhaps even earlier, upon learning more about each other, Gloria might have decided that Brenda’s reputation was not in line with her values and would have decided not to partner with her.
I WILL TELL YOU HOW TO HAVE A SUCCESSFUL JOINT VENTURE
How do I know?
My name is Dr. Dorene Lehavi and in my over 20 years of mentoring and advising business partnership and joint venture relationships, I have learned the things that keep business and joint venture partnerships from succeeding and actually breaking up badly.
As with life overall, most business mishaps have to do with relationships and where there are partner ownerships and joint ventures, the first and foremost relationship is between the partners. The better the communication, trust and respect at the top the more the business functions successfully including everyone from employees to customers. Ultimately it all gets reflected in the bottom line.
When the communication is troubled so is the business venture. Poorly executed plans with the wrong partner doom the joint venture from the start.
The first and most important thing to do when choosing to partner with someone, whether it’s a big business or limited small joint venture is to get to know each other
4 Secrets to a successful Joint Venture?
• Choose the right partner
• Set clear win/win goals
• Discuss the details, write them and do them
• Nurture the relationship throughout
How important is this to my success?
That’s a Great Question. Here’s two success stories.
Fran and Isabel, both of whom have a background in theater arts, formed a drama group with the goal that they would assemble a community of interested people who would meet, perform plays for themselves and others and donate some funds to an organization that provides services to the homeless. This is a joint venture and not a business, but there are issues to decide and record in order to clarify, avoid misunderstandings and define the purpose and the vision to keep the group on track. Fran and Isabel listed every job that would need to be done and divided them between the two of them.
There is no doubt about who was to do what. Fran’s job was to take care of internet communication with members, send the monthly invitations and keep track of the finances. Isabel’s job was to locate venues and order food to be offered at the meetings, the cost of which is covered by monthly dues of the members. They discussed and wrote decisions about the protocol of how to choose the plays and how actors or readers would be assigned. Having a short 3 page descriptive written joint venture agreement leaves no questions about how things are run and who does what. And there is always the option to make changes.
SERIAL JOINT VENTURER
Marilyn is a professional organizer and has joint ventures with all of the following businesses in order to give the appropriate thank you gift to her clients and benefit other small business owners in return. It’s a win/win/win arrangement for all of the participants. Like Life coach, wellness coach, florist, yoga coach, interior decorator, carpet cleaner, day spa, and wardrobe consultant.
Not all, but most of Marilyn’s clients have home offices. All of them though suffer from clutter. People are usually stressed going through the act of purging their stuff even when they have given themselves over to Marilyn’s professionalism and experience. She is a warm, understanding and reassuring person, but is assertive and directive when necessary. Delving into other people’s clutter is an intimate activity that puts Marilyn in the position of quickly getting to know someone. When she has completed the job, she enjoys sending or giving a surprise gift to the client from one of the above businesses that best suits the client’s need to de-‐stress or take the next step in beautifying the surroundings. The businesses providing the surprise gift have varied arrangements with Marilyn. The florist, for example sends a free bouquet and coupon for another in exchange for the name of a new potential loyal client. All of the others offer a free gift certificate chosen and presented by Marilyn to the client who will benefit from that service the most. In exchange, Marilyn receives a 10% commission when her client becomes theirs.
The beauty of Marilyn’s serial joint ventures is that they work and benefit all 3 of the participants. But she only does these with business owners who meet the criteria:
• someone she knows well
• they agree to reciprocate by giving her gift certificate when appropriate
• she trusts their quality of their service
• they have a high standard of ethics
• they agree to write the details into a joint venture agreement and live up to them. In each case, the agreement is only 2-‐4 pages and includes the purpose of the joint venture for both, how they keep track of the numbers and when commissions are to be paid. Everyone is clear on what they are to do and when. They do not depend on their memories and there are no misunderstandings.
Here’s how you can do it
Once you have connected with a potential partner, the next very important step is to find out if you are a good match, to feel comfortable with each other and to build trust.
Start by answering and asking these questions:
1-‐What has been your experience with JVs?
2-‐Do you know of others who did a JV?
3-‐What do you know about them that worked?
4-‐What do you know about them that didn’t work?
5-‐Why do you want to do this particular JV?
6-‐Why do you want to do this one with me?
7-‐What do you each bring to the table?
8-‐Are there any problems that you would anticipate specific to us?
Ultimately the conversations using the Template to guide you should bring you to greater understanding, knowledge of each others goals and visions, growing respect and trust.
Or not. You will also find out if you are not a good match. Be grateful for knowing it now and not later. Shake hands and go your separate ways.
“When you start a business partnership or joint venture it is easy to overlook the details in the excitement and promise of the venture. Having a joint venture agreement is essential to level set expectations and avoid costly misunderstandings. But who has the time to think through all the important considerations?
With Dorene’s Joint Venture Agreement Template you don’t have to worry about what you have forgotten to discuss. She has made what can feel like an overwhelming task as easy as filling in the blanks! Working through the agreement brought up issues and questions that I wouldn’t have thought of otherwise and that needed to be discussed and agreed upon.
Filling it out made my partnership stronger and our venture more productive.”
Ph.D., Your Talent Advantage
WHAT IS THE COST TO NOT DOING JOINT VENTURES OR HAVING YOUR JOINT VENTURE FAIL?
It will take you a lot longer to get known, grow your list and have more clients. You will serve fewer people with less product. How fast can you grow your business on your own?
• LEARN HOW TO HAVE A JOINT VENTURE
• AUDIO GUIDE BY DR. DORENE LEHAVI WALKS YOU THROUGH THE PROCESS
• THIS IS NOT A BOILER PLATE WRITTEN BY LAWYERS FOR BREAKING UP
• YOUR AGREEMENT WILL BE PERSONAL AND UNIQUELY DESCRIPTIVE OF YOUR VENTURE
• THIS AGREEMENT TEMPLATE SETS THE FOUNDATION FOR A STRONG AND SUCCESSFUL JOINT VENTURE PARTNERSHIP RELATIONSHIP AND INCLUDES A WIN/WIN EXIT STRATEGY WHEN THE TIME COMES
• INVEST ONCE AND USE OVER AND OVER AGAIN
• IMPROVE COMMUNICATION SKILLS THAT WILL CARRY OVER TO ALL OF YOUR RELATIONSHIPS
“I recently entered into a joint venture with another party for the purpose of running a business and professional education group. Although Dorene’s Joint Venture Template provides extensive information, some of which was not pertinent to this venture, it was easy to pick out the parts that would. We ended up with a 3-page agreement that clearly covers all the relevant parts.
I will use this template again in other joint ventures. Based on my over 40 years of business experience and having been in a number of partnerships, most that did and some that did not work out as expected, it would have been helpful in all cases to have this detailed template as a guide.I highly recommend it.”
Dalia Hayon, Independent Financial Planner
FOR THE JOINT VENTURE AGREEMENT TEMPLATE AND AUDIO GUIDE