The world’s most successful 100 joint ventures (JVs) represent hundreds of billions of pounds’ worth of combined annual revenue, and demonstrate that finding a JV partner can change your entire business, both in outlook and results.
JVs have the potential to benefit any entrepreneur’s bank account and portfolio, and while they are particularly common in the world of property investment they are worth considering when considering any commercial enterprise in any industry. It is important to remember that while a JV can benefit you financially, it can also serve to improve your business mindset, turning you into a more creative entrepreneur and enhancing the professional qualities you are seeking to develop.
Let’s look at some of the most important points to consider before moving into a joint venture, as well as some of the entrepreneurial skills and qualities they can assist and build for you.
Considering the opportunity
No one should enter a JV partnership without weighing the options and deciding the outcome you are seeking, so there are many factors to carefully consider before shaking hands. However, a successful JV can accelerate your business growth, generate compounded profits, help diversify and enable you to deliver your company’s key objectives more effectively than if you were attempt the task alone – not to mention help develop a successful business mindset.
Like any business strategy there are effective methods and best practices for delivering on a JV’s potential, as well as elements that entrepreneurs should seek to avoid. Below you will find 6 key points to consider when deciding whether to move forward into a JV partnership and while taking part in one. You will also find the entrepreneurial qualities that each point will help you to develop moving forwards.
6 points to consider
1. Take your time beforehand
Entrepreneurial skill: patience
Joint ventures can be lucrative and rewarding, but you should never rush in unprepared or uninformed. Putting in your due diligence couldn’t be more important!
Research the companies that your potential JV partner has been involved with, listen carefully to what others say about them, read the content they put out online and, if you can, find out about the sorts of deals they have sealed and had success or failed in.
This is one of the best ways for an entrepreneur to practice patience and improve their business mindset. Rather than diving into a deal because you feel pressured, do all you can to make sure that your potential JV partner is the right one for you.
2. Create a JV partner avatar.
Entrepreneurial skill: sourcing and managing people
Be clear with yourself about the sort of JV partner you want to work with. Note down the positive traits your JV partner would have, and consider the liabilities you would like to avoid.
Ask yourself: are your values and business mindsets aligned? You will do best to find a JV partner with different skills but a unified vision, whose abilities and experience complement yours rather than duplicate them.
Whether your potential JV partner has the right character, the right skills, and the right business mindset are all essential points to consider.
3. Start small to test
Entrepreneurial skill: caution, learning
Take on a small deal – for example, a single investment property deal or a small buy-to-let property turnaround project. Don’t allow yourself to be pressured, because if an investor pushes you for more before you are confident in their abilities, they are unlikely to be the right JV partner for you, long-term.
While any successful entrepreneur will take risks at some point in their career, it is also essential to exercise caution, as well as to understand the pros and cons of each deal and each potential JV partner.
4. Clarify your duties
Entrepreneurial skill: organisation, delegation
Identify the roles within a project that you are both best suited to, confirm these in written form, and then prepare a future org chart with all roles mapped out and your partner’s name in each of them.
Being prepared and looking to the future with a clear understanding of what is expected of each of you will provide a roadmap more likely to lead to success than if you simply designate duties on an ad hoc basis.
5. Focus on giving
Entrepreneurial skill: leading by example
Once the structure of your partnership has been agreed, concentrate on being an effective, reliable and hardworking partner, as this will encourage your JV partner to become the same.
A good leader will demonstrate what is expected of their partners and employees by their own actions. While all entrepreneurs are aiming to develop their own bank accounts and careers as a priority, no business deal was ever sealed or carried out without cooperation and leadership.
6. Share your thoughts for a unified vision
Entrepreneurial skill: communication
Keep communication open, honest and respectful. When you encounter challenges, don’t aim to find a culprit by laying blame at your partner’s door; focus on the solutions instead.
This solution-based thinking style is a feature of the business mindset that allows you the most freedom to progress. Creating a blame culture in any situation, business or personal, will create only ill will and an unproductive environment.
What qualities and considerations do you think of as being essential before and during a joint venture partnership?
If you would like to hear more from Mark, listen to his podcast, Mark My Words, here and find his audiobook “Uncommon Sense” here