Most valueable asset for any businessperson is relationship with his/her customers. It is so valuable that you cannot put any price on it. All you should know is how to leverage it and you have hit a goldmine.
Joint ventures leverage these relations. Because people like to buy from persons whom they could trust, joint ventures succeed. It is estimated that it could cost six times more to sell to a new person than someone you already know. Every time the buyer buys from you, the cost decreases.
Joint ventures work on principles of synergy. When two persons of an average sized list decide to get together, they are going to achieve much more than each of them could individually.
There are many types of joint ventures that you can delve into. Each of them works slightly on different arrangement but the basic principles The really important thing to understand is that there are many different types of joint ventures and all of them can increase your profits.
Let’s take a look at some different types of Joint Ventures.
Packaging
Going to a business owner whose product or service is synergistic with yours and adding totally fresh, unrecognized avenues of ongoing business sales of your product or service, using your unutilized production or personnel capacity or a new profit center, that you operate in concert with the business owner.
Resale Rights
You can buy the rights to someone’s product, process, or system, and market it to other competitors who will pay a licensing fee or royalty to you. You can do this with a company’s techniques, technology, products, marketing, resources, people, etc. Practically anything can be used!
Distribution
You let others be distributors for your products and services. Affiliate programs are one type of distributor arrangement.
Partnerships
You can have a full-blown partnership agreement with someone where they invest assets into the partnership along with you. You both own a part of the company.
Consulting
Do you have some unique knowledge that might be useful to other companies? If so, you can work as a consultant and get a piece of the improved profits generated from the information you gave the company. In many cases, you can end up owning a share of the company.
Yes, even this is a form of a joint venture, at least in the beginning stages.
Co-Authoring
Do you have an idea for a book or a manual but you don’t know everything there is to know on the subject? You can partner up with someone who does know this information and form a co-authoring agreement. This, too, is a form of a joint venture.
Whatever is the model, the basic idea is to leverage.
If you have ideas to share on this, please leave a suggestion.
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Tags: joint ventures, leverage, list, online business, profits, synergy
Your absolutely correct, partnerships are a great way for small businesses to expand inexpensively. Too many people get into sole proprietorships only to find out they should of found some one to partner with.
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