5 Things to Think About When Doing a Joint Venture
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A good portion of my business revolves around my JV partners. Anyone in the information marketing field will end up “doing deals” with people in a variety of areas. I’ve had some very good and some very bad experiences. I hope this post will help you build solid and profitable relationships.
1. It’s not JUST the money!
When you are considering working with someone remember that the money is important, but it’s only ONE part of the “puzzle.” You have to LIVE with this person on a regular, perhaps daily basis. That being the case, make sure you select partners that both have great financial potential, but are EASY for you to get along with.
For me, this means a certain TYPE of person. Just like with a marriage, some personalities mesh better than others. Being fairly type A myself, I tend to work better (MOST of the time) with folks who are a bit more laid back than I am.
When YOU consider someone to work closely with, think about how the two of your personalities will combine. If you work with someone who makes you a lot of money but makes you MISERABLE, is it really worth the money you’ll make? Not for me!
2. Contracts PRECEDE Work
The terms of your agreement should be spelled out and agreed to BEFORE you start doing ANY work. Doing it any other way MAY result in your doing a lot of work that results in NO money. I’ve made this mistake and I won’t ever make it again.
No matter how much you know or like someone, make sure that you have a DEAL MEMO (a short one page agreement) put together before you even START doing any work. Two people may appear to agree on things when verbally discussing things, but may NOT agree when they see things on paper.
3. Who Does What?
In your agreement, make sure you clearly spell out who does what. I have a standard agreement that I use. It clearly outlines what each party is responsible for. This makes it a lot easier to get work done when you know what you’re responsible for.
4. What if Things Don’t Work Out?
I know it’s IMPOSSIBLE for you to imagine right now, but like marriages, some JV partnerships don’t work out either. Crazy, huh?
This means that you MUST have a way to end the relationship which is clearly defined. It’s like a PRENUP. Everyone should know what will happen JUST IN CASE things don’t work out.
5. It Should be a Field You’re Excited About
No matter how much money you feel you can make with a certain partner, it’s a VERY good idea to ENJOY the field you select. IF you DO, you’ll find that WORK feels more like PLAY. For me, this is essential. I hate doing anything that I’m not pretty jazzed about. I can BOUND out of bed if I’m enthusiastic about the concept or project.
These are five elements to consider carefully before you get into a JV deal. I WISH I would have more carefully considered these BEFORE I started doing them!