The first thing a joint venture capitalist is going to do when considering a partnership is to check out a business plan. They’re going to go right to the financial section, because venture capitalists are very concerned about cash flow and want to know where the numbers are coming from. The last thing a venture capitalist is going to look for is someone who is speculative or is giving a bunch of hype. As soon as there's hype, there's a huge red flag, and that's when things are going to start going in a downward spiral.
Joining your competitor and partnering with a person or company who already has a client base is the essence of a joint venture. If you're looking to do something unique to build your client base and your credibility, then you need to partner with somebody who's already doing what you want to do, and doing it in a fairly big way.
A key element in successful joint ventures is to find someone who has a complementary product. Figure out what it is that you have that's unbelievable, that you know for a fact you do better than pretty much anyone else out there. Use your product to extend the product offering for someone else. You would be following a complementary product, and then you're going to go and say, "Add this to your product mix,” and you can put together a revenue share on that.
You have to be transparent when you're doing this and you have to be able to state your case. The number one question people want to know in joint ventures is the same as in most partnership situations, “What's in it for me?” Joint ventures are all about building a relationship, so it's important to disclose what your intention is.
The first thing you need to know is that joint venturing isn't just limited to your database. Joint ventures are only limited by your creativity. You can use a joint venture for pretty much anything. Nothing is set in stone, and even if you start out as the middle person putting together deals and you don't have a database at all, you can still make it work.
Entrepreneurs make money by putting together win-win strategies that include endorsements and building those relationships, getting to a point where they optimize their joint venture so that people will endorse their product, and also equity partnerships.
One of the first things you want to do in a joint venture is to gain control of the deal. You want to be the one who calls the shots. But how do you ensure all partners involved in the joint venture provide the same input and reap according to what they sow?
Always keep your market in the forefront of your thinking, particularly when doing joint ventures, and ask if these two questions apply to your business: What other businesses or products out there directly benefit from your product? What products do people need to optimally use the product that you have?
The best way to build credibility is to just go out there and say, “Here’s a gift. Here’s a seminar you can do. Here’s a list.” Go to as many seminars as you can and start mingling with the heavy hitters, because they’re the movers and shakers of business. They are all sharpening their own saw on a regular basis. They are not staying stagnant.
If you can turnkey the operation, you basically put in all of the sweat equity. As soon as you have control of the deal, you determine when you enter, when you exit, and you have more control for leverage to go whatever way you want to go. When you approach someone that you feel has a bigger network, a bigger income and a better reach, then get them to turnkey the entire deal.
The most important mindset for a joint venture partnership is to approach it from an unlimited point of view. The only thing that really matters is that you are creative. If you can dream it up and you can create it, that’s really the only rule. A joint venture doesn’t have to be a certain way.
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