11 ways you can use or integrate Joint Ventures in your business

August 28th, 2008 by admin

There’s a huge problem with joint venturing opportunities. There are so many of them that there is a grave danger of having too much cake and never being crtain where to take the first bite!

My humble thanks to Jay Abraham for these identifying these ways to apply joint ventures;

  • Gain an advantage of Scale, Scope and Speed
  • Product Development
  • New Products and Services
  • Market Sector Development
  • Diversity
  • Create New Businesses
  • Cost Reduction
  • Enhance Competitiveness
  • Boost Market Presence
  • Enter Emerging Markets
  • Expand Horizons

Lets look at each one in turn;

Gain an advantage of Scale, Scope and Speed
You can take advantage of other people’s relationships, their infrastructure and even their capital. I spent some time working for a very large IT Distributor. Once a Vendor had a relationship with us it was reasonably easy for them to leverage our whole infrastructure.

We provided huge lines of credit to our reseller partners and a mechanism to ship products really fast. Was there a cost to this relationship? Of course there was and Vendors would bend over backwards to win our trust and to access our reseller base because it made economic sense.

The point here is that almost every business can apply this model and reach customers faster and quicker than they ever felt was possible.

Product Development
Are you a phase two, three or four business? These type of businesses are beyond the first phase of building the sales system and winning new customers.

Businesses moving out of phase 1 are ready to leverage their existing customers and offer new products and services. They have a problem though, the biggest problem is that it takes quite a considerable investment to create new products and gear up to deliver them.

You can identify business partners and apply joint ventures by licensing or packageing their products. I did this very successfully when I was in the interactive training market. Yes, it did take a few months to arrange but after that it was plain sailing with good profits for all partners.

Additional or New Products
This is one of the easiest things for any business to do. Just imagagine what your customers buy before or after you have served them. I know this sounds easy and it really is. Go and have a look at Yellow Pages and see what products are classified with yours.

If someone buys a new kitchen what did they do before and what do they do afterwards?

May be they engaged a designer or had tiles put up on the wall or floor. After a kitchen what else might they want? A new bathroom, new carpets or something else?

How might you apply this thinking to your business?

Market Sector Development
You can penetrate new markets almost instantly. Do you want to take your business into another sector, may be one that is does better in a recession. Find out who else sells to the market sector you want and set up an strategic alliance with them.

Diversity
You can hedge your bets by diversifying and the easist way to do this is with joint ventures. You no longer need to buy another business, just joint venture with another business instead. When the time is right and you have tested the water then go ahead a buy someone out and be armed with great knowledge.

Create New Businesses
I did this once by engineering an internal joint venture between two departments. A Car Rental Company started to offer an enhanced car servicing with lots of added value.

Reduce Costs
What ever your existing infrastructure looks like I can almost guarantee that you can reduce your costs by applying the science of integrated joint ventures. The mechanics employed at the car rental company were only utilised at around 70% of capacity. Creating a new business which used their skills was so easy and instead of being a cost they delivered profit and lots of it too.

Enhance Competitiveness
You can enhance your competitiveness by entering new markets - fast. Whether you want to strike out in a new Town, another County or another Country. Just thinking about it makes my mouth water.

Emerging Markets
Setting up alliances or joint ventures in emerging markets is a safe, low risk, low cost way to enter them. No need to bet the bank or take too many risks when you can work with another business partner who is already there.

Expand Horizons
There are infinite ways to add value and leverage from Joint Ventures. The only real limit is your thought or should I say lack of thought.

There are no money problems only thinking problems.

Happy joint venturing

Steve

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