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Joint Venture Checklist


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Short-term partnerships in the form of joint venture can involve many types of business. Today many individuals, groups of individuals, companies and corporations are interested in founding a profitable joint venture. This checklist will show you what you should know about joint ventures. 6,5 Kb

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1. Reasons behind Joint Venture

  • Saving costs by applying united efforts and achieving synergetic benefits.
  • Sharing risks to run intensive and considerable projects.
  • Getting access to new technologies, skills and experience.
  • Developing new products and co-branding.
  • Getting new customers and markets.
  • Outsourcing and new opportunities related to outsourcing projects.
  • Reducing pressure of global competition.

2. Finding partners

  • Use Internet and business publications to find new partners.
  • Note that in a typical joint venture one party brings traffic (customers and sales opportunities) and other parties give intellectual property (software products, services, business know-how, patents etc.), so choose the proper role for your side.
  • Understand what you are going to deliver to the future joint venture and then look for partners which have what you need.
  • Example 1: you have written a book (a real bestseller), and now you need to find a partner who would offer existing sales opportunities (websites, distribution network) to promote your book.
  • Example 2: you own a software development company and look for programmers who will show great performance and develop new software products for business management. You can found a joint venture, and outsourcing can be the basis for it.

3. What Joint Venture Agreement identifies:

  • The idea of your joint venture.
  • Contribution, role and participation of each partner.
  • The duration for which your joint venture will exist.
  • Management and performance of joint venture obligations.
  • Allocation of budget, revenues and expenses.

4. Considering the main items of Joint Venture Agreement

  • Identify the parties and their roles.
  • Establish the purpose of Joint Venture Agreement.
  • Outline the main goals of the future collaborative work.
  • Sign Non-Disclosure Agreement.
  • Set commencement date and duration.
  • Set expectations and benefits for every partner.
  • Identify and direct financing.
  • Identify which parties will be stakeholders to split future dividends.
  • Identify responsibilities (penalties) if one of the parties will quit.
  • Define responsibilities for day-to-day operations in all relevant areas of activity.
  • Identify who will run Tactical (day-to-day) decision making.
  • Identify who will run Strategic (long-term) decision making.
  • Define permissions level to business information per partner.
  • Work out a detailed plan for management and delivery arrangements.
  • Define where Accountable body and top management will be located (Headquarters)
  • Set the date when your joint venture is to be terminated.

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