A joint venture is a form of partnership where businesses come together and share knowledge, market, and profits. The good news for small business is that large companies see value in partnering with smaller companies due to a small company's ability to maneuver quickly in the marketplace, while providing specialized expertise and unique market insight.
Copyright (c) 2008 Christian Fea
A joint venture is a form of partnership where businesses come together and share knowledge, market, and profits. Joint ventures come in all shapes and sizes. The good news for small business is that large companies see value in partnering with smaller companies due to a small company's ability to maneuver quickly in the marketplace, while providing specialized expertise and unique market insight. A small company can be a valuable joint venture partner to a large corporation; so don't be afraid to think big when you think joint venture.
Significantly benefiting from a joint venture
Your business can benefit from a joint venture in several ways. First, a joint venture with a larger corporation can shorten your learning curve when it comes to developing new products and gathering the necessary market intelligence for strategic market expansion. A small business can also glean information regarding the implementation processes and procedures that will improve productivity. Learning from companies who have already been around the block a time or two can save significant time and money for the small firm who is ready to grow and willing to listen to the expertise a larger company may bring to the table.
Next, a joint venture can be a source of additional resources and capital for you. Not only does partnering with a larger more established company enhance your credibility, but it can also open doors to resources and funding that were previously unavailable.
One small company, who successfully partnered with industry giants, was Mello Smello. An unknown husband and wife team partnered their unknown company with 3M and Disney to create scratch and sniff stickers of Disney characters. The end result was a multi-million dollar business. Why? Not only were there additional monetary resources, there were additional sales resources and distribution channels that would have taken years to develop if the husband and wife team would have chosen to go it on their own. By forming a joint venture, Mello Smello catapulted to the top.
Tapping into joint venture resources
One of the resources that should not be overlooked as a benefit of a joint venture is the additional marketing that is available. Whether you're a small business partnering with a large business or a small business partnering with another small business, chances are you will have the opportunity to promote your product or service to a database of customers that were previously untapped. All business is essentially broken down to the cost of obtaining a paying customer. By tapping into your venture partner's database, you dramatically shorten the customer solicitation cycle, which can translate to a huge savings in advertising and marketing.
Joint ventures don't all have to be multi-million dollar deals. A benefit to joint ventures between small businesses with similar or exactly the same products and services can be simply to help to free up much needed resources. For instance, say there's a tradeshow taking place in which you would like to participate, but the exhibit fee is a bit too much for you to handle. By forming a joint venture with another small business in a related field, or the same field, you both save money and expand your potential market.
Look to create a joint venture that offers benefits to both parties, and you are sure to reap the rewards.
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