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Joint
Ventures are simple, but pulling off a successful deal isn't
always as easy as it "should be". In fact, most
deals fall flat on their face before they even have a chance
to be executed because of one of the following issues:
•
Lack of Preparation
•
Poor Market Research, Partnership Assessment and/or Material
Development
•
Lack of Communication
•
Lack of Effort
And so on.
The bottom line is that one reason or another, the deal falls
apart because it either wasn't a good match, it wasn't a good
idea, or it wasn't given enough seriousness.
And often
this isn't simply the result of being "disorganized".
More often than not, it's the result of not following a proper
system - or "checklist" - when it comes to setting
up a deal.
So here's
a great "JV Success Criteria" list that I found the
other day, written by a talented marketer by the name of Habiba
Abubukar...
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"1-2-3
Steps to a Successful JV"
A successful
joint venture marketing effort is the goal of many small businesses,
and is a great way to increase market visibility and profits...
Joint venture
marketing is rising in popularity everyday, but it does
take some skill, good planning and foresight to execute.
Here are the steps a business owner should take to be successful
in this arena…
1. Write
down your goals and desired outcome
Be sure to have specific, measurable and action-oriented goals
for your joint venture, along with a realistic time frame for
their execution. These should be written down and easily accessible
so that you can refer to them when implementing your action
plan.
2. Analyze
the target market you want to reach
Begin by reviewing your current clientele, then choosing the
clientele you want to attract. Analyze your target market for
buying habits, marketing trends, etc.
Brainstorm
other products and services used by your target market and determine
whether there’s synergy with what you offer.
3. Identify
potential partners who already serve this clientele
Think of potential partners that have influence and credibility
with your target market. Remember that your network of business
associates, suppliers, family and friends may be a good fit
or can introduce you to prospective partners. Create a list
of potential partners that offer the best expansion opportunities,
and have the most desirable client base.
4. Determine
your joint venture format
Do you want to offer a profit sharing format, or a reciprocal
arrangement, or both? If you choose to pay your partner a percentage
of the profits, then you will pay them a specific amount or
percentage for each new client they send your way. If you choose
a reciprocal arrangement, then you will systematically send
clients to each other. Think of something that is of high perceived
value to offer the clients.
5. Determine
your budget
It goes without saying that you should control costs from the
beginning of a project. That means you need to sit down at the
start and list every item that’s required to carry out
the joint venture.
6. Create
an action plan and implement it
Once you’ve listed your potential partners, create an action
plan. This should detail the steps you’ll take to approach
them and implement your joint venture project e.g. "I’ll
contact Joe Bloggs of XYZ Corporation on July 15th." To
keep you focused, refer to your goals when creating and implementing
your action plan. Also note that the details of your action
plan will change depending on the pace at which the project
goes.
7. Contact
your partners and open the door for discussions
Make initial contact with your potential partners and set up
a meeting. You can contact them by phone, snail mail or email,
but phone remains the best contact method. At the meeting, keep
your eyes and ears open to make sure the market fit is as good
as you initially thought. Also, ensure that the "chemistry"
is good between you and your prospective partners. Emphasize
the benefits of your proposal.
8. Decide
on either a contract or a hand shake deal
If you choose a contract, ensure that it specifies terms for
review, and doesn’t lock you into any long term arrangement
without specific criteria for profitability being met. If you
choose a hand shake deal, be sure you trust your partner!
9. Launch
your joint venture and test the results
Start small by doing a test run first. Write, print and send
the endorsement letter and implement the tracking system. Make
sure you’re equipped to handle the flood of new clients
once you’ve set the joint venture into motion.
These steps
are simple and easy to execute. If you follow them appropriately,
you can look forward to having profitable, win-win joint venture
projects! As with any marketing strategy, remember to test,
tweak, track and review results until you find the best fit.
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Copyright
© 2005 by Habiba Abubakar and Emprez. All rights reserved.
Habiba Abubakar,
a.k.a. "The Profit
Diva", specializes in helping small business owners
who are struggling to increase their client base and are tired
of earning mediocre profits. The tips in this article have been
excerpted from her home-study program, "Joint Venture Profits
For Small Business Owners."
To learn
more about this step-by-step program, and to sign up FREE for
her revealing Mini eCourse, "The Easiest Way To Skyrocket
Your Profits In 90 Days Or Less," visit http://www.profitdiva.com
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