Why you should use a Joint Venture Agreement
Consider these Issues:
Sometimes the companies are in the same market, in other words competitors or companies with overlapping services. With that being the case, it’s important that they observe certain precautions and issues. Several articles highlight some of the same concerns, as detailed below:
- Make sure there is a joint venture agreement, in writing, which extensively details what each will bring to the table. This is typically referred to as a joint venture agreement. In some instances, a memorandum of understanding may suffice. Consult an attorney for assistance drafting this binding agreement.
- Have a plan which outlines what each party intends to contribute and their share of the profits that result from the venture.
- Be certain each party is equally comfortable sharing knowledge.
- Each party should keep their workforce in the loop.
- Each party should be prepared to give and take.
- No joint venture agreement should be formed if there is no mutual trust, no meeting of the minds.
- Be aware that this is both an asset-sharing and risk-sharing agreement.
- Consider which projects you want to pursue together using your combined strengths.
- It’s important to detail who has operational control of the joint venture.
- Make certain there are strong leaders with clearly articulated expectations.
Why do Joint Ventures Fail?
An online article on 1000ventures.com indicates that some joint ventures fail due to their failure to plan.
We will be adding a Guest Writer’s page to WFiL website soon so you can read these articles, and more, in full. Until then join us on Thursday for the final part of: Joint Ventures: When to Make a Good Strategic Alliance.
By the way Iceland – the frozen food supermarket – have a food Speciality range which includes Crocodile, Kangaroom Ostrich and Venison Burgers. The Crocodile meat looks very pink in colour….