If a merger or acquisition fails to offer the mutual benefit you and another entity are looking for, then a joint venture may be exactly what you need. It can be key to innovation, or to making a success of a new and unfamiliar business environment, provided you and the other party or entity are able to consolidate your objectives into one, workable plan for the future.
Here are our top five tips.
Consider their corporate culture and history
Entering into a joint venture can offer monumental prospects, but those prospects can only ever be turned into a reality if you and your partner are able to work productively alongside one another.
Consider the fact that you and the other entity will, for the venture to prove successful, be mutually reliant. If the other party has an entirely different approach to ‘doing business’, then that level of reliance will pose a massive strain – unless you can find a way to exist harmoniously.
Consider practical factors, like their production capacity, but also their history in making joint ventures, and how their work culture differs (or converges) with yours. A bad company culture can be the kiss of death for ventures like these, and that’s not something you want to find out the hard way.
Work with a corporate solicitor
Managing the process of establishing a joint venture is incredibly time-consuming, particularly if you don’t feel entirely confident about the legal requirements of going through this process. Protecting your interests, foreseeing potential setbacks, and ensuring you and the other party come out of this process stronger, rather than weaker, is more than anyone can handle with a full-time workload already demanding their time and attention.
This is why experienced corporate solicitors are seen as a lifeline to business owners in this position. They can carry out due diligence, advise you on what needs your attention (and when), and generally make the process easier to navigate.
Find out whether or not your objectives are aligned
While it may seem obvious, there is plenty of scope for misinterpretation or oversight unless you specifically take the time to compare your objectives for the venture with those of the other party.
This is not something you want to jump into without feeling sure that, weeks or months down the line, you won’t find yourself being steered down a path you never wanted to go down in the first place.
Familiarise yourself with new markets first
While embracing new markets in countries and regions you have not done business in before is a great opportunity to grow your business prospects, there are inherent risks to doing so. It is, of course, possible to prepare yourself against those risks, but only if you ‘do your homework ahead of time.
This is not something that you want to play catch-up on when the venture is already underway. It’s something that must fall high on the list of priorities, or risk stalling your venture before it has even got off the ground.
Put the right management team in place
The key to a successful joint venture is preparation and communication in all areas – from the contact you have with your legal team (and theirs), to the implementation of a new business plan that embraces your shared plans for the future.
For this, you’ll want the right management team in place and ready to begin work quickly and effectively, or those first few weeks will feel like a struggle to get started.
