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How to Write a Joint Venture Business Plan

A joint venture business plan is a document that defines a business arrangement between two or more companies. Just as with a normal business plan, this plan also includes numerous sections and extensively describes the aim, companies, and responsibilities of each company in the joint venture. This plan also outlines temporary activities that help to attain specific goals.

Coming together to form a joint venture is nothing new in the business world. However, the real deal is to have an arrangement that equally protects the interests of each party so that everyone in the joint venture can put their best creative foot forward. Have it in mind that the best way to guarantee all parties understand their obligations and are fully participating is to put together a detailed joint venture business plan .

Although each company in the venture can put together the business plan, a legal review is often recommended to validate if the plan is legitimate. These plans are also known to be above and beyond a standard business plan. Most often, the plans will vary based on the specifics and interests of each party in the arrangement.

Steps to Write a Joint Venture Business Plan

Forming a joint venture involves several critical steps that begin with identifying and analyzing a viable joint venture partner to agree with. This sort of agreement requires well-detailed documentation and other allied/ancillary agreements. To write a solid joint venture business plan, here are steps to take;

Step 1: Write a Detailed Company Profile

Although this wouldn’t be the first page of your joint venture business plan, it is often recommended you start the writing process by first providing a brief description of each company involved in the joint venture. You have to include the management teams of each company, the resources, or goods available, and every other detail vital to the joint venture.

Consider creating a profile to briefly describe the partners in the agreement. You should also outline the expertise of each company and the reason for inclusion in the joint venture. You may also have to write a statement on the purpose of the joint venture as well.

Step 2: Spell Out your Marketing Strategies

The next step will be to discuss the market strategies you intend to leverage to achieve success for the joint venture. Just as with a normal business plan, it needs to define the market the goods and services are meant for. This section will also need to contain a thoroughly done analysis, graphs, and all other vital information that describes the market and why the joint venture will attain success.

Most often, companies in the agreement are advised to cooperate on this section to put together an analysis from each partner. Have in mind that the length and detail of this section will depend on the purpose of the joint venture; a competitive analysis may also be necessary.

Step 3: Input your Financial Projections

Note that every joint venture business plan is expected to include financial projections. While this may be the final section of the business plan, it will include information specific to product prices and cost of goods or services sold, and possible expenses from the activities.

You may need to include Pro forma financial statements in this section. Note that these statements provide a formal look at potential profits and let banks or lenders properly evaluate the venture’s possibility for success. Other statements or documents may also be included in this section.

Step 4: Your Executive Summary

Although the Executive Summary will be the first page of the joint venture business plan, it is always recommended you write it last. This page of your joint venture business plan provides a concise view of the business agreement. Depending on the joint venture activities, the section of the business plan will span anywhere from a few paragraphs to a few pages.

Important Clauses to Include in a Joint Venture Business Plan

A joint venture business plan is the bedrock of any joint venture. It outlines the objective and purpose of the joint venture. Have in mind there are ideal clauses a joint venture agreement is expected to contain. Here are very important clauses that should be inserted in the joint venture business plan:

Definitions

It is critical for every business plan to have a clause that defines all the necessary terms in the plan. This is primarily to avoid any form of misunderstanding and misinterpretation in the plan. Have it in mind that certain words or terms are given confining definitions for the purpose of interpretation of the plan. This clause will help guarantee a mutual understanding between the parties as to what a certain term means.

Parties to the Joint Venture

A joint venture business plan is meant to identify all the parties involved in a joint venture. Have in mind that there is a possibility that the original party won’t be the investing party, and the investing party may be the parent company of the original party. In such circumstances, this clause is very necessary to ensure that the joint venture agreement is binding to the investing parties as well as the original parties.

Nature of the Relationship

This is one of the most vital functions of the joint venture business plan. This clause in a business plan is meant is to outline the nature of the relationship between the joint partners, whether the parties owe any contractual obligations to one another, or whether the arrangement is just a contractual relationship where each party remains at arm’s length.

Business Objectives and Purpose of the Joint Venture

Note that this clause outlines the purpose why the joint venture was established. There are numerous reasons why businesses enter into a joint venture, from expanding their markets to completing a specific project. The purpose of the joint venture will need to be extensively considered before proceeding with finding a joint venture partner.

The Structure of the Joint Venture

This clause will have to include details about what structure the joint venture will be, such as an LLC, LLP, or incorporated. This clause shall also contain the details of the formation of the joint venture thereof. It shall also mention the registered office and the location where the joint venture will be carrying out its business.

Parties’ Contributions

This clause will note if the work will be split 50/50, who’s bringing what to the table, and what you can expect from the other person or company. Outlining this in your joint venture business plan in detail will ensure that all partner’s expectations are aligned. This is to ensure that each party understands what they will be committing to the venture, and also to ensure that they are bound by that commitment.

Distribution of Shares

The shareholding of all the partners will have to be outlined under this clause. Note that the distribution of shares is a very important aspect as the shareholdings will more or less dictate the proportion of ownership among shareholders.

Note that distributions of shares must not be 50:50; they can vary depending on the agreement between all parties. The shares can be distributed by a mutually agreed ratio or based on the capital contribution of the parties.

Rights and Obligations of the Parties

Indeed every party in a joint venture has certain rights that they can exercise and certain obligations. In the joint venture business plan, this clause will have to explain in detail everything that is expected from the parties. This is to limit or avoid future disputes and misunderstandings.

Joint venture business plans will need to explain who will manage the venture and take care of its day-to-day operations. It will also specify different levels of approval for different types of decisions.

Some joint ventures agree to establish a management committee instead of appointing the board of directors where the joint venture has been entered into for a particular short-term project. The mode of management needs to be explicitly outlined in the joint venture business plan.

Representation and Warranties

Note that these are statements of fact made by the parties entering into the joint venture. Representations and warranties are more or less made before entering into an agreement and such representations and warranties will also have to be mentioned in the joint venture business plan.

Representations and warranties are necessary so that the parties have adequate and vital information about each other such as financial standings of the parties or the loans taken by the parties, pending litigation, etc.

Indemnity Clause

Indemnity is a legal obligation on the parties to compensate the other party in case of breach of any contractual obligation. Most often, the party that suffers due to a breach of representations and warranties is entitled to be indemnified for the losses. Have it in mind that the indemnity clause will have to be fair, mutually agreed upon, and well balanced. The language and scope of this clause will also need to be clear and precise.

Dispute Resolution

In all business arrangements, there are bound to have disagreements and issues. While these issues will not always lead to litigation, it is recommended that all parties agree on a mechanism to deal with such situations.

Each party in a joint venture can be from different jurisdictions and governed by varying laws. Therefore the mechanism to resort to in case a dispute arises will need to be mutually agreed upon by the parties and explicitly noted in the plan.

Non-compete clause

This is a very important clause to include in a joint venture business plan. Depending on the nature of the agreement, it might be necessary to note that the two businesses are restricted from directly competing with one another, at least for a stipulated time. However, the non-compete clause will need to be reasonable otherwise it might be treated as a violation of a person’s fundamental right to trade.

Confidentiality

Within a joint venture agreement, parties are expected to disclose certain vital information concerning the company. Note that this information can be related to technology, trade secrets, or intellectual property. The information in the wrong hands might cause the party to incur massive losses.

This is why this clause is very important in a joint venture business plan. The clause may also need to provide that the information disclosed for the joint venture should never be used for personal gains.

Force Majeure

This clause is used to provide relief and protection to a party in a situation where the party is unable to meet some of its obligations. Note that this inability to fulfill obligations may be due to events that are totally beyond the control of the parties. The event could be a flood or an earthquake or a fire so on and so forth.

Termination

You need to understand that not every joint venture survives long and is often terminated. Owing to that, this clause will have to be included in the joint venture business plan. The termination clause centers on instances, breaches, or the occurrence of which the joint venture will be terminated.

Exit Mechanism

Even while still under an agreement, there can be many reasons why the parties would want to exit the joint venture. This could include short of funds or the joint venture going into a loss for some time. It is very common for a party to want out of the joint venture, maybe due to certain unresolved issues. Owing to that, the exit mechanism will need to be noted in the joint venture plan.

Deadlock Resolution

Deadlocks tend to arise when the parties in the joint venture have equal powers and are finding it hard to agree on a common conclusion.

Note that things like this can lead to disagreement especially when neither party is ready or willing to surrender their powers or accept the other party’s decision. While this cannot be entirely avoided in a joint venture, you should establish a mechanism that will help the parties to come to a common agreement or to resolve the deadlock.

Financial and Administrative Record Keeping

All parties in the joint venture must collaborate on maintaining their financial records. They also need to decide the process of administrative record keeping. While this may not be necessary, it is good practice for joint ventures to work with one accounting firm that is agreed upon by all members. This will help to limit the risk of any conflict of interest or complications in the future.

Intellectual Property

For joint ventures that will produce intellectual property that is of potential value to each of the parties, this clause is very necessary to avoid the risk of one party attempting to take advantage of the other’s intellectual property. This clause in the joint venture business plan should note who will own any new intellectual property created by the venture, and the extent to which the parties are permitted to use that property outside the venture.

More on Business Plan Tips

What Is a Joint Business Plan (JBP)? Benefits & Best Practices

By 8th & Walton | on October 2, 2022

From small businesses to large corporations, the most successful companies begin and stick with a clear business plan. When a company defines its goals, lays out a path to meet objectives, and agrees on financial spending and expectations, it creates a shared vision and accountability to succeed.

Many businesses experience greater growth when partnering with another business. In the supplier and retailer relationship, both parties working independently would be detrimental. To create a mutually beneficial partnership, they must begin by defining each company’s responsibilities, expectations, and needs in a joint business plan.

What Is a Joint Business Plan?

A joint business plan (JBP) is the collaborative process of planning between a retailer and a supplier in which both companies agree on short-term and long-term objectives, financial goals, growth, and shared business initiatives for profitability.

Joint business planning focuses on agreeing on common objectives and aligning on a single goal or set of goals. The companies in the joint business plan must work together to accomplish a shared vision.

What Is the Purpose of a Joint Business Plan?

For retailers and suppliers, having a joint business plan can create a win-win strategy in growing consumer sales. An effective JBP allows suppliers to build stronger relationships with their retailers so both parties can mutually support and benefit from each other.

When a retailer and supplier recognize each others’ needs and agree on common goals, they can share insights to support each other and improve sales, customer growth, and processes.

How Does a Joint Business Plan Work?

Two companies can come together with a joint business plan because they have one thing in common: a shared shopper . Whether it is a supplier partnering with a retailer or a children’s clothing company partnering with a toy manufacturer, having the same target audience is the first element that brings the companies together.

The companies considering a joint business venture should then share their individual business plans and discuss their mutual growth opportunities. This is where the general goals and areas of support can be defined. Specific tactics and category strategies can also be fleshed out in early discussions before moving to the formal process.

Once both companies are in agreement that the partnership will be mutually beneficial, the joint business plan can be created. Formal contracts are drawn up, approved, signed, and the plan is ready to be executed. Periodic reviews and necessary adjustments to the JBP are recommended as needed.

Benefits of Joint Business Planning

Why enter into a joint business plan with another company? The benefits can be not only financial but educational as well:

• Aligning goals.  For a retailer/supplier joint business plan, being aligned on goals creates clarity on all other areas of the business. Defining expectations on all areas from marketing to supply chain to sales goals leaves minimal area for questions. Agreeing on goals, no matter how and when they are measured, keeps both parties accountable and benefits both to meet expectations.
• Shared resources and exposure. Partnering with another company can bring a new audience and a new platform. In a simple retailer/supplier joint business plan, the retailer can introduce the supplier’s product to its core shoppers. At the same time, shoppers loyal to the supplier’s product or brand can be introduced to the retailer’s store and website for the first time.
• Greater return on investment.  By partnering with another company with a shared vision, the benefits above will provide a better ROI when the plan is executed correctly.

Joint Business Planning Best Practices

How can companies ensure their joint business plan is a good fit for both parties? These are some best practices to include in preparation for entering into the partnership:

1. Align Internally First

Before entering into a joint business plan with another company, all members of the business must agree on the benefits of the partnership. Recognizing the advantages and seeing the bigger picture is key. When employees are in alignment within the company, it will be easier to align with the partnering company on the shared vision of the joint business plan.

2. Create the Plan Together

When two businesses enter into a partnership, the joint business plan should not be built by only one. A company sending another a complete plan or just a form to fill out is not collaborative. Both companies need to build the plan from the ground up. Collaborating in the development of the joint business plan is just as important as executing the plan itself.

3. Set Specific Goals

Expectations for success in the partnership need to be specific. “We need to grow sales” or “production costs will decrease” are good goals, but too general. Keep specifics in your plan that are as specific as they are realistic. If one company wants to grow sales by 40% in the next quarter, this should be spelled out in the joint business plan so get early support or push back from the other company.

4. Assign a Metric to Each Goal

Putting a metric with a goal keeps the company accountable to the mission of the joint business plan. For example, if the goal is to grow sales by 40% in the next quarter, it would be wise to assign a weekly growth metric. If the metric is too low over a few weeks, the plan shows that action needs to be taken immediately in order to meet the 40% sales growth goal for the quarter.

5. Communicate Responsibility and Accountability

The joint business plan is the place to eliminate all guesswork. If Company A is responsible for providing labels to Company B, be very specific about the responsible parties. Clarify that the packaging coordinator of Company A will mail the labels to the warehouse manager of Company B on the first of the month.

6. Include Risks and Solutions

Planning for setbacks is key to planning for success. The joint business plan should include any possible risks or obstacles foreseen by either company. Having solutions in place for multiple scenarios makes the plan easier to execute.

7. Constantly Evaluate the Relationship

Joint business plans work better with trust, mutual respect, and a great working relationship. Keeping the relationship healthy between the companies and individuals relying on each other brings more success to the overall plan. Monitor the relationship periodically and work to resolve conflicts as they arise.

Joint Business Plans at Walmart

Walmart works with its suppliers to create plans for sales and category growth. The company relies on suppliers to bring insights to the table to spot trends and get in front of potential gaps in the business.

Back in 2011, Walmart created a joint business plan with Proctor and Gamble to pick up lost sales in air fresheners. This category was down over 2% across the chain, but P&G brought insights to Walmart on how consumers were purchasing throughout the industry.

Consumers had no problem going to Walmart for aerosol sprays for under a dollar, but would then go to specialty stores to purchase expensive candles in the same scent. Through communicating through the joint business plan, Walmart was able to create excitement around higher price-point items and show the shared shopper they could purchase the extra items in one store.

Positive business collaborations can be extremely beneficial in growing retail sales. Two companies sharing a common vision can build on each other’s best practices and support each other to mutually win at the register.

Suppliers looking for support in their Walmart business have found great collaboration with 8th & Walton. Our team of experts supports suppliers to improve reporting, analytics, supply chain, accounting, and more. To begin a great collaboration with us, request a free 15-minute consultation this week.

About the Author

8th & Walton consists of retail industry experts with a combined 200+ years of Walmart and Walmart supplier experience. Having helped hundreds of CPG companies in their efforts to be better supplier partners to the world's most influential retailer, the 8th & Walton editorial team prides itself on being a go-to resource for Walmart supplier news and insights.

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Last Updated on November 28, 2023 by Arif Chowdhury

Imagine two retail brands, each with their own unique strengths and market presence. Now picture the joint business venture, with two partnering business partners, joining forces to conquer a new market together through joint ventures. This is the power of partnering with other teams in a company – a joint business plan , where executive summaries are created to outline shared goals and maximize potential.

Collaboration is vital in today’s competitive industry landscape. By forming joint ventures, companies can pool their resources, expertise, and networks to unlock new opportunities, expand their reach, and drive growth like never before.

Joint ventures allow companies to collaborate and create stronger teams , leading to increased success. A joint business plan serves as the blueprint for this collaborative venture, outlining key objectives, strategies, and tactics that both parties will execute together.

A well-crafted joint business plan typically includes an executive summary that outlines the purpose and scope of the collaboration. It also details specific marketing initiatives such as promotions or product launches aimed at capturing the target market’s attention. It covers aspects like distribution channels, branding efforts, and sales projections to ensure alignment between both parties.

In this blog post series on joint business plans, we will explore the importance of collaboration in driving success for retailers and companies in today’s fast-paced retail industry. Collaboration is crucial for the success of ventures in the retail industry.

We will delve into the key components of an effective joint business plan and provide real-life examples to illustrate its impact. So buckle up as we embark on this exciting journey towards collaborative success!

Benefits of implementing a joint business plan

Implementing a joint business plan can bring numerous benefits to retailers and companies involved in the venture. Let’s explore some of these advantages in detail:

1. Increased Alignment and Synergy between Partners

One of the key benefits of implementing a joint business plan is the increased alignment and synergy between partners. When all parties in a joint venture are working towards a shared goal, it becomes easier to align joint venture strategies , joint venture objectives, and joint venture activities.

This alignment fosters collaboration and teamwork in the venture, allowing partners to leverage each other’s strengths and expertise.

• Better coordination between teams.
• Shared vision leads to improved decision-making.
• Enhanced trust and mutual understanding.

Example: Imagine two companies collaborating on a marketing campaign. With a joint venture business plan in place, both companies can align their messaging, target audience, and promotional activities for maximum impact.

2. Enhanced Communication and Coordination

Another significant benefit of a joint business plan is the improvement in communication and coordination among partners.

Clear channels of communication are established, ensuring that information flows seamlessly between all parties involved. This enhanced communication enables faster problem-solving, timely decision-making, and efficient resource allocation.

• Regular meetings facilitate open dialogue.
• Improved sharing of information and knowledge.
• Quick resolution of conflicts or issues.

Example: In a joint business plan between a manufacturer and distributor, regular communication helps them stay updated on market trends, customer feedback, and inventory levels. This enables them to make informed decisions regarding production volumes, delivery schedules, and product promotions.

3. Improved Resource Allocation and Cost Optimization

Implementing a joint business plan allows partners to optimize resource allocation effectively. By pooling resources together strategically, partners can reduce duplication of efforts while maximizing efficiency.

This collaborative approach also helps in identifying cost-saving opportunities by streamlining processes or leveraging economies of scale.

• Shared resources lead to reduced costs.
• Elimination of redundant activities.
• Efficient use of available assets.

Example: Two companies in the logistics industry can collaborate on a joint business plan to optimize their transportation routes, thereby reducing fuel costs, minimizing delivery times, and maximizing the utilization of their fleets.

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Best practices for successful joint business planning

1. establishing clear goals and objectives.

To ensure a successful joint business plan, it is crucial to establish clear goals and objectives . This means clearly defining what you want to achieve together with your partner or stakeholders. By setting specific targets, you can align your efforts towards a common purpose.

One way to do this is by using category management principles. This involves analyzing market trends, consumer behavior, and competitive landscape to identify opportunities for growth. By understanding the category dynamics, you can develop strategies that capitalize on market trends and consumer preferences.

2. Regular Communication and Feedback Among Stakeholders

Effective communication is key in any collaborative effort, including joint business planning. Regularly communicating with your partners and stakeholders helps maintain alignment and fosters a sense of shared responsibility.

By providing feedback throughout the planning process, you can address any issues or concerns promptly. This allows for adjustments to be made in real-time, ensuring that everyone remains on track towards achieving their goals.

3. Creating a Structured Timeline with Defined Milestones

A structured timeline with defined milestones is essential for keeping joint business planning on track. Breaking down the plan into smaller, manageable tasks helps ensure progress is made consistently.

Consider creating a Gantt chart or project timeline that outlines key activities, deadlines, and responsible parties. This visual representation provides clarity on the sequence of tasks and allows for better coordination among team members.

Establishing milestones helps measure progress along the way. Celebrating these achievements boosts morale and keeps everyone motivated throughout the planning process.

4. Developing a Win Strategy

A win strategy focuses on identifying how both parties involved can benefit from the joint business plan. It aims to create mutually beneficial outcomes that drive growth for all stakeholders.

When developing a win strategy, consider factors such as market share gains, revenue growth opportunities, cost savings through economies of scale, or access to new markets or distribution channels.

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Evaluating the progress of a joint business plan

To ensure the success of a joint business plan, it is crucial to regularly evaluate its progress. This evaluation allows you to monitor key performance indicators (KPIs), conduct reviews and assessments, and make necessary adjustments to stay on track.

Monitoring Key Performance Indicators (KPIs)

Monitoring KPIs is an essential step in evaluating the progress of a joint business plan. These performance metrics provide valuable insights into the effectiveness of your plan and help you gauge its success. By tracking KPIs, such as sales growth, revenue generated, or customer satisfaction levels, you can assess whether your joint business plan is delivering the desired results.

Some key performance indicators that are commonly monitored include:

• Sales performance: Keep an eye on how well your products or services are selling. Track factors like sales volume, average transaction value, and conversion rates.
• Promotional effectiveness: Evaluate the impact of marketing campaigns and promotions on driving sales. Measure metrics like click-through rates, website traffic generated from promotions, or coupon redemption rates.
• Product performance: Assess how well specific products are performing in terms of sales numbers, customer feedback, or market share gained.
• Customer satisfaction: Monitor customer feedback and ratings to determine if your joint business plan is meeting their expectations.

Conducting Regular Reviews and Assessments

Regular reviews and assessments are vital for evaluating the progress of a joint business plan. Schedule periodic meetings with all stakeholders involved in the partnership to discuss achievements, challenges faced, and areas that require improvement.

These reviews provide an opportunity to analyze data collected from KPI monitoring and gather insights from each party’s perspective.

During these sessions:

• Share research findings: Present any relevant market research or consumer insights that can inform decision-making processes.
• Discuss results achieved: Review the outcomes achieved so far based on set goals and objectives outlined in the joint business plan.
• Identify bottlenecks and risks: Identify any obstacles or risks that may be hindering progress and brainstorm potential solutions.
• Collaborate on adjustments: Work together to determine necessary adjustments or modifications to the joint business plan, ensuring it remains aligned with changing market dynamics.

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Making Necessary Adjustments to Stay on Track

Flexibility is key when evaluating the progress of a joint business plan. As you monitor KPIs and conduct reviews, you may identify areas where adjustments are required to maximize success. Making these necessary adjustments allows you to adapt your strategies, overcome challenges, and capitalize on emerging opportunities.

Consider the following steps for making adjustments:

• Analyze data: Examine the data collected from KPI monitoring and reviews to identify trends or patterns that require attention.
• Identify areas for improvement: Pinpoint specific areas within the joint business plan that need adjustment based on performance gaps or changing market conditions.
• Collaborate with partners: Engage in open discussions with your partners to gather their input and insights regarding potential adjustments.
• Develop action plans: Create detailed action plans outlining the necessary steps to implement changes effectively.
• Monitor results: Continuously monitor the impact of these adjustments on performance metrics and assess their effectiveness.

By regularly evaluating the progress of your joint business plan, monitoring KPIs, conducting reviews, and making necessary adjustments, you can enhance its chances of success. This iterative process ensures that your joint business plan remains aligned with evolving market dynamics and increases your likelihood of achieving mutually beneficial outcomes.

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Finding the right partner for joint business planning

Identifying the ideal partner for joint business planning is crucial to the success of any collaborative endeavor .

It requires careful consideration of various factors, including complementary strengths and expertise, compatibility in terms of values and culture, as well as conducting due diligence before entering into an agreement.

Identifying Complementary Strengths and Expertise

When seeking a business partner for joint business planning, it’s essential to identify individuals or organizations with complementary strengths and expertise. This means looking for partners who possess skills and resources that complement your own.

For example, if you’re a manufacturer looking to expand your distribution channels, partnering with a retailer or distributor who has established relationships with consumers can be highly advantageous.

Consider the following when assessing complementary strengths:

• Look for partners who excel in areas where you may have limitations or gaps.
• Seek out individuals or organizations that bring unique perspectives and capabilities to the table.
• Evaluate potential partners based on their track record of success in relevant areas.

Assessing Compatibility in Terms of Values and Culture

In addition to complementary strengths, compatibility in terms of values and culture is vital for a successful partnership. When embarking on joint business planning, you’ll be working closely together towards shared goals.

Therefore, aligning values and having a similar organizational culture can foster effective collaboration.

Here are some considerations when assessing compatibility:

• Evaluate whether your partner shares similar core values such as integrity, transparency, and customer-centricity.
• Assess whether there is alignment in terms of long-term objectives and vision.
• Consider how well your respective cultures will blend together to create a harmonious working relationship.

Conducting Due Diligence Before Entering into an Agreement

Before finalizing any partnership agreement, it’s crucial to conduct thorough due diligence. This involves gathering information about potential partners to ensure they are reliable, trustworthy, financially stable, and have a good reputation within their industry.

Here are some steps to consider during the due diligence process:

• Research: Conduct extensive research on potential partners, including their history, financials, and reputation.
• References: Reach out to their existing or past business partners to gather insights into their reliability and performance.
• Legal Assistance: Engage legal professionals to review contracts and agreements to ensure they protect your interests.
• Pilot Projects: Consider starting with small-scale pilot projects to test compatibility before committing to a long-term partnership.

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Maintaining a common vision and strategic objectives

To ensure the success of a joint business plan, it is crucial to maintain a common vision and strategic objectives with your partner. This involves aligning long-term goals and ensuring a shared understanding of strategic priorities. By continuously reinforcing the importance of collaboration, you can foster a strong partnership that drives mutual growth.

Aligning Long-Term Goals with the Partner’s Vision

When embarking on a joint business plan, it is essential to align your objectives with your partner’s vision.

This alignment ensures that both parties are working towards a common goal and have a clear understanding of each other’s expectations. By taking the time to understand your partner’s vision, you can identify areas where your goals intersect and collaborate effectively.

Ensuring Shared Understanding of Strategic Priorities

In order to execute a successful joint business plan, it is vital to establish shared understanding of strategic priorities.

This involves open communication and regular discussions about the strategies and tactics that will be employed to achieve desired outcomes. By aligning your strategies with those of your partner, you can create synergy and maximize the impact of your joint efforts.

Continuously Reinforcing the Importance of Collaboration

Collaboration is key in any joint business plan, as it allows for the pooling of resources, expertise, and networks. To maintain effective collaboration throughout the partnership, it is important to continuously reinforce its importance.

This can be done through regular check-ins, open communication channels, and providing support where needed. By fostering an environment that encourages collaboration, you can build trust and strengthen the relationship with your partner.

Maintaining a common vision and strategic objectives in a joint business plan requires strong leadership and effective strategy execution. It involves aligning long-term goals with your partner’s vision, ensuring shared understanding of strategic priorities, and continuously reinforcing the importance of collaboration.

You raise the chance of reaching win-win results if you keep this alignment throughout the collaboration. Recall that effective collaborative company planning needs constant communication and a dedication to collaborating to achieve shared objectives.

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Resources to help you get started with joint business planning

Creating a joint business plan can seem like a daunting task, but fear not! There are plenty of resources available to assist you in this process.

Let’s explore some of these resources that can help you get started with joint business planning.

Online Templates for Creating Joint Business Plans

One helpful resource is the availability of online templates specifically designed for creating joint business plans. These templates provide a structured framework that allows you to outline your goals, strategies, and actions in a clear and organized manner.

With pre-defined sections and prompts, these templates make it easier for you to navigate through the planning process.

• Saves time and effort by providing a ready-made structure.
• Ensures consistency and completeness in your joint business plan.
• Provides guidance on what information to include in each section.
• May lack customization options for unique business needs.
• Requires careful adaptation to fit your specific partnership dynamics.

Industry-Specific Case Studies Showcasing Successful Collaborations

Another valuable resource is industry-specific case studies that showcase successful collaborations between businesses. These case studies offer real-life examples of how joint business planning has been implemented effectively across various industries.

By examining these success stories, you can gain insights into best practices, challenges faced, and strategies employed by others in similar partnerships.

• Offers practical examples that demonstrate the benefits of joint business planning.
• Provides inspiration and ideas for implementing collaborative strategies.
• Helps identify potential pitfalls and ways to overcome them.
• May not directly align with your unique partnership situation.
• Limited availability of industry-specific case studies may restrict options for certain sectors.

Expert Guides on Effective Partnership Management

To further support your joint business planning efforts, expert guides on effective partnership management are available as well. These guides provide comprehensive advice on building strong partnerships, fostering collaboration, managing conflicts, and maximizing mutual benefits.

They offer valuable insights from experienced professionals who have navigated the complexities of joint business planning.

• Offers expert advice and proven strategies for successful partnership management.
• Provides step-by-step guidance on various aspects of joint business planning.
• Helps you avoid common pitfalls and challenges associated with partnerships.
• Requires careful adaptation to your specific partnership dynamics.
• May not address industry-specific nuances or challenges.

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Frequently Asked Questions (FAQs)

Can any type of business benefit from joint business planning.

Absolutely! Joint business planning is applicable across industries and sectors. Whether you’re a small startup or an established corporation, collaborating with another company through joint business planning can bring numerous benefits such as increased market share, cost savings through shared resources, access to new customer segments, enhanced product offerings, and improved overall competitiveness.

How do I find the right partner for joint business planning?

Finding the right partner for joint business planning starts with identifying companies that complement your strengths and fill gaps in your capabilities. Look for organizations with similar values and strategic objectives but different areas of expertise that can add value to your offerings.

Networking events, industry conferences, trade associations, online platforms are great places to connect with potential partners. Take the time to build relationships, assess compatibility, and ensure alignment before diving into joint business planning.

What are some common challenges in joint business planning?

While joint business planning offers numerous benefits, it can also come with its fair share of challenges. Common obstacles include differences in organizational culture and decision-making processes, conflicting priorities and objectives, resource allocation issues, and communication breakdowns.

The key to overcoming these challenges is open and transparent communication, mutual respect, and a willingness to compromise when necessary.

How do you evaluate the progress of a joint business plan?

Evaluating the progress of a joint business plan requires establishing clear metrics and milestones at the outset. Regularly review these indicators to gauge performance against targets.

Maintain open lines of communication with your partner to address any concerns or roadblocks that may arise along the way. By regularly assessing progress and making necessary adjustments, you can ensure that your joint business plan remains on track towards achieving its objectives.

Are there any resources available to help me get started with joint business planning?

Yes! There are several resources available to assist you in getting started with joint business planning. Industry publications, online forums, webinars, and workshops often provide valuable insights and best practices for successful collaboration.

Consulting firms specializing in strategic partnerships can offer guidance tailored to your specific needs. Don’t hesitate to tap into these resources as you embark on your joint business planning journey.

In today’s competitive business landscape, collaboration is key to success. That’s where joint business planning comes in. By partnering with another company and aligning your goals and strategies, you can unlock a whole new level of growth and profitability. Joint business planning allows you to pool resources, share expertise, and leverage each other’s networks to achieve mutually beneficial outcomes.

But it’s not just about the immediate gains. Joint business planning sets the foundation for long-term partnerships built on trust and shared vision. It enables you to navigate challenges together, adapt to market changes swiftly, and seize opportunities that may have been out of reach individually. By working hand in hand with a like-minded partner, you can amplify your impact and create a powerful synergy that propels both businesses forward.

Ready to tap into the power of joint business planning? Start by evaluating potential partners who align with your values and objectives. Establish open lines of communication, set clear expectations, and define measurable goals together. Remember, successful joint business planning requires ongoing collaboration and commitment from both parties. With the right partner by your side, there’s no limit to what you can achieve together.

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What Is a Joint Venture and How Does It Work?

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As a small-business owner, you need a collaborative mindset to succeed. You need to develop solutions with employees, business partner, and investors on a regular basis. Sometimes, you might have a great business idea that requires expertise or resources from another individual or company. In this case, you might consider entering into a joint venture with that individual or company.

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What is a joint venture?

A joint venture is an agreement by two or more people or companies to accomplish a specific business goal together. A joint venture can be structured as a separate business entity or simply grow out of a contract between the parties. Unlike a partnership, a joint venture is typically temporary, dissolving after the task is complete.

But how does a joint venture work? What are the possible benefits (and risks) of this kind of arrangement? We're here to help.

In this guide, we'll explain more about joint ventures, discuss the benefits and risks — plus, we'll review how a joint venture compares to other types of business entities as well as how to start one for your business.

How a joint venture works

Expanding upon our joint venture definition above, this type of agreement allows you to come together with one or more other individuals or businesses to carry out a specific project. Joint ventures are particularly common in the real estate, media, and technology sectors.

When it comes down to it, business owners enter into joint ventures to access new markets, tap into complementary skill sets, or combine resources. The concept of a joint venture can be confusing because there’s a degree of collaboration and independence.

Two or more people or companies come together in a joint venture for a specific purpose. However, the parties don’t have any legal responsibilities to each other beyond the scope of the joint venture.

Characteristics of a joint venture

Generally, a joint venture consists of each of the following characteristics:

The parties undertaking the joint venture are legally independent, with the exception of the work they do together during this collaboration.

The parties set out to accomplish a specific, mutually beneficial goal.

Both parties contribute resources, share ownership of the joint venture’s assets and liabilities, and share in the implementation of the project.

The joint venture is temporary (but can be short or longer-term), dissolving once the goal is reached.

Overall, the key to this arrangement is that both parties contribute to it and share in the opportunities and risks.

This being said, however, the contributions don’t need to be equal. For instance, one party might manufacture the product, and the other party might offer a distribution channel. One party might offer 70% of the money, while the other might bring just 30%.

No matter how you split contributions and profits though, each party is fully liable for anything that might go wrong with the joint venture.

As an example, let’s say two real estate developers launch a joint venture to build an apartment building. A bystander gets injured by construction debris that one of the developers leaves behind. Under the law of every state, both developers will share fully in the liability if the bystander sues, even though only one was responsible for the accident.

The only way to eliminate this shared liability is to form a legally separate entity for the joint venture (which we'll explain below). Although a joint venture doesn't require that you form a separate entity, many businesses choose to take this route.

Joint venture agreement

The terms of a joint venture should be documented in a written joint venture agreement. Although a written contract isn’t legally required to establish a joint venture, it's the best way to ensure that each party is committed to the shared effort and knows what is expected of them.

The contract should specify what each party will contribute to the joint venture, each party’s rights and duties, and how much each party will profit from the venture, similar to a partnership agreement.

Overall, just like any type of business collaboration, without a written agreement, joint ventures can fall apart due to disagreement between the parties, and therefore, it's worth taking the time to draft and agree upon a contract from the beginning.

Joint venture examples

Joint ventures can be useful in any situation where distinct companies have complementary resources and a shared goal. The examples of joint ventures you’ve read about might have been two mega corporations coming together, but small business owners can benefit from this type of arrangement, as well.

According to Washington, D.C.-based business attorney Joy R. Butler, “If you think a joint venture is the exclusive territory of Fortune 500 companies, think again. Joint ventures offer the option of pooling resources with others, so you don’t have to go it alone. Your joint venture might be as straightforward as sharing a customer list for a combined marketing campaign… or providing original content for a website.”

Here are some joint venture examples:

Two mobile phone companies agree to share their network.

A transportation provider and network provider join forces to provide Wi-Fi on the transportation platform.

Multiple real estate developers work together to build a shopping complex.

A restaurant teams up with a big distributor to get their products into supermarkets nationwide.

Two car companies pair up to conduct research about fuel efficiency.

These examples are all inspired by real-life joint ventures.

For instance, BMW and Toyota formed a joint venture in 2015 to develop a vehicle powered by hydrogen fuel cells. And back in 2009, Vodafone and Telefónica joined hands to share their mobile network infrastructure across parts of Europe, a deal that allowed both companies to save millions.

Joint venture alternatives

Although joint ventures may seem similar to other types of business arrangements — and sometimes the term "joint venture" is used interchangeably with terms like "partnership," joint ventures are unique.

With this in mind, it's important to understand how joint ventures differ from other business arrangements:

Joint ventures vs. partnerships

A general partnership is a specific type of business structure where two or more people govern a company together. The partners share in the profits and losses of the business.

Unlike a joint venture, a partnership is typically designed to last indefinitely. Joint ventures are usually temporary and initiated for a specific project, though they have more permanence than a simple licensing or distribution agreement, particularly when larger companies are involved.

However, there are some similarities between joint ventures and partnerships, the main one being liability.

“A joint venture is similar to a partnership, but courts typically distinguish between them by finding that joint ventures are usually for one single project or transaction, whereas partnerships typically are longer-lived,” explains Professor Michael Molitor of Cooley Law School at Western Michigan University. “But in any event, whether it is a partnership or a joint venture, the partners or joint venturers will be personally liable for the business’s debts.”

Joint ventures vs. franchises

In a franchise, the parent company grants a license to run a business using the parent company’s name, brand and operating methods — some examples include McDonald’s, Subway, UPS and other low-cost franchises .

Usually, a franchise is a long-term arrangement, and the franchisee pays an initial fee to the franchisor for the right to operate the business. Additionally, the franchisor exerts a certain degree of control over the franchisee’s business decisions. In a joint venture, neither party is in “control,” and both contribute toward a shared goal.

Joint ventures vs. licensing

Licensing is similar to franchising because the licensor permits the licensee to use the company’s name and logo. The licensee manufactures products and pays a royalty fee to the licensor for the rights to use the brand.

With joint ventures, on the other hand, both parties work together to reach a common goal and assume equal liability should something go wrong with the project.

Joint ventures vs. mergers or acquisitions

In a merger, two companies combine to become a single business entity. Sometimes, two companies of similar size come together, like Exxon-Mobil.

Alternatively, a large company could acquire the assets of a smaller company. The purpose of a merger is usually to capture new market share, and an acquisition is often used to buy out a smaller competitor.

In contrast, the purpose of a joint venture is to achieve a common goal, and each party maintains its independence.

Joint ventures vs. qualified joint ventures

A qualified joint venture is a partnership that’s run by spouses, each of whom participates in managing the business.

For tax purposes, the IRS allows each spouse to file a Schedule C for their portion of the business income and losses, in the same way that sole proprietors do.

Benefits and risks of a joint venture

Before we explain how to form a joint venture, you might be wondering about the benefits — and the risks — of such an arrangement. This type of collaboration seems simple enough, especially in comparison to the other business arrangements we listed, so, is there a reason why you wouldn't agree to a joint venture with another business?

In short, there are two sides to consider before agreeing to a joint venture with another business or individual. Let's start with the possible benefits:

Benefits of joint ventures

Your business can gain access to markets, resources, people, capital, technology, etc. that you wouldn't have otherwise.

You can reduce competition — especially if you're working with a direct competitor.

By working with another individual or business, you can more easily accomplish a goal or objective that would have been difficult on your own — which hopefully leads to an increase in profits.

You may be able to bypass time-consuming business license or regulatory requirements by working with a company that has already met those requirements.

You can designate a specific part of your business to work on a joint venture project with another business, without having to completely combine your organizations.

Risks of joint ventures

On the other hand, of course, there are possible drawbacks associated with entering into this type of agreement:

You may find it difficult to work with the other business and have to sort through disputes.

The joint venture could end badly and result in wasted time, effort, money and resources.

The project or goal you've taken on through the joint venture could end up failing.

You can open yourself up to additional liability and other legal risks by working with another business (especially if you don't create a separate entity for the joint venture).

As you can see, there are both advantages and disadvantages to forming a joint venture and you'll want to weigh these points against one another before deciding if this type of arrangement is right for your business.

How to form a joint venture in 5 steps

As we've explained, companies or business owners commonly form a joint venture to access new markets, gain an edge over competitors, or tap into complementary resources. Therefore, if you think this type of arrangement may be a worthwhile opportunity for your business, here are the steps you'll need to take to form one:

1. Find a partner

First, finding a joint venture partner (or more than one partner for larger joint ventures) starts with clearly defining your objective. For instance, perhaps you’ve developed a new product but lack wide distribution channels to get it into stores. You can ask fellow business owners what distributors they use and do some independent market research. Then, reach out to different distributors to gauge their interest in a joint venture.

This being said, you should evaluate the people who you'll be working with both in terms of their skills or knowledge and their cultural fit. Obviously, they must be able to prove the reach of their distribution channels.

However, you should also assess how committed they are to the final goal. Can you trust the people in charge? What’s the financial condition of the company, and what are their financial expectations from the joint venture? Does the firm have any other commitments or conflicts of interest that would hurt this arrangement?

When trying to find a partner, you should be prepared for a lot of negotiation and back and forth in the process of forming your arrangement. You might need to exchange production schedules, customer lists and other proprietary details with your would-be partner, and they’ll need to share their own information.

To protect the confidential information of everyone involved, it’s a good idea to prepare and sign a mutual nondisclosure agreement.

2. Choose a type of joint venture

After you've found a partner, your next step will be to structure your joint venture.

As we've discussed, there are two ways to do this:

Form a separate legal entity for the joint venture, such as a corporation or limited liability company, with each party having an ownership stake in the new entity.

Operate under a joint venture agreement without creating a separate legal entity. This is called an unincorporated joint venture.

Just as is the case with forming a joint venture itself, there are both advantages and disadvantages to the two structure options.

Forming a separate legal entity for your joint venture is the more expensive and complex option. If you form a corporate joint venture, for example, the joint venture will be responsible for filing and paying its own business taxes. However, having a separate legal entity also provides more legal protection if something goes wrong.

The faster, less expensive option is to get started with a simple contractual arrangement. In this case, the joint venture doesn’t report any profits of its own and doesn’t pay taxes on its own. The profits flow through to the respective parties’ tax returns.

If you’re exploring a joint venture for a narrowly defined purpose where liability isn’t much of a concern, it might be fine to get started this way. For a more complicated joint venture, on the other hand, it’s safest to establish a separate legal entity.

3. Draft a joint venture agreement

Once again, no matter what type of joint venture you create, you should draft a joint venture agreement that contains all the details of how it will be run. You can start with a joint venture agreement template, like the one shown above, to create your own agreement for your specific arrangement. Depending on the business you're working with and the risks associated with the joint venture, however, you might also decide to consult a business attorney for assistance.

This being said, at a minimum, your joint venture agreement should contain the following information:

The purpose of the joint venture.

Formation process (i.e. if the arrangement will be a separate entity or established by contract).

How the parties will allocate profits and losses, which need not be equal (though an outside claimant is free to sue either or all parties).

Each party’s contributions, which need not be equal.

What duties each party is responsible for to ensure the joint venture’s success.

Meeting schedule to decide on important matters.

Voting rights of each party.

When the joint venture will end.

Overall, when you're drafting and signing the joint venture agreement, it’s a good idea for both parties to have legal representation as part of the process.

4. Pay taxes

As with any profit-seeking enterprise, you must pay taxes when you’re part of a joint venture. As we mentioned above, the taxation of your joint venture depends on how the arrangement is structured.

If you form a separate legal entity, any profits of the joint venture will be taxed based on the entity type. For example, C corporations pay a 21% flat income tax rate on business profits, and shareholders pay taxes again on dividends. LLCs, on the other hand, are taxed as pass-through entities, which means the business income and losses are reflected on each owner’s tax return.

Unincorporated joint ventures are similar to LLCs in terms of tax treatment. The profits of the joint venture flow through to the parties to report on their individual tax returns, in line with their respective share of the profits as outlined in the joint venture agreement.

If the parties to the joint venture are corporations, then each corporation reports the joint venture income on their corporate tax return. An unincorporated joint venture doesn’t itself complete a business tax return.

5. Follow other applicable regulations

Finally, you'll want to make sure you follow any other regulations that might apply to your joint venture at the local, state, or federal level.

For instance, if you’re “borrowing” employees from either company that is a party to the arrangement, you’ll need an employer identification number and to follow other labor laws. Depending on which industry your joint venture belongs to, you might need a business license to operate.

And if you’re considering a cross-border joint venture, a host of international regulations come into play that might limit your ability to operate in other countries.

The bottom line

Joint ventures can be beneficial, even critical, to making a business idea a reality when you need someone else’s resources, market knowledge, or skill set to accomplish a specific project. However, a joint venture also opens you up to risks and liability, particularly if you don’t form a separate legal entity for it.

Therefore, as we've discussed, if you decide to enter into a joint venture with another individual or business, it's important that you understand the possible risks, as well as draft a thorough agreement to help mitigate those risks, in order to put your endeavor on the best path to success.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

Negotiating a better joint venture

In the fast-paced world of deal making, joint ventures (JVs) are a conundrum. Slow in the making, often with complicated structures and shared management teams, they seem out of place in a volatile era marked by buzzwords that hype agility and nimble strategic moves. Yet there they are, more than 1,500 JV deals completed annually over the past ten years, including around 10 percent of them characterized as large JVs, with an initial value of more than $250 million. Their volume seems likely to endure—more than two-thirds of executives surveyed in 2014 reported that they expect to do more JVs in the future. 1 1. Eileen Kelly Rinaudo and Robert Uhlaner, “ Joint ventures on the rise ,” McKinsey on Finance , November 2014. This McKinsey Global Survey was in the field from March 11 to March 21, 2014, and garnered 1,263 responses from C-level and senior executives representing the full range of regions, industries, company sizes, and functional specialties. Of them, 982 executives had personal experience leading or managing joint ventures

But JVs are not always embraced without reservation. In fact, we encounter many executives who express significant concerns, often when they’re wrapped up in the uncertainty of JV negotiations. Given how much longer those negotiations can last compared to traditional acquisitions, this is both understandable and alarming. One global conglomerate we’ve observed advises its US-based headquarters to expect JV negotiations to last three to six times longer than M&A negotiations. That’s a long time for doubt to creep in, particularly if the competitive context justifying a venture might shift in the meantime.

How can executives build healthier partner relationships to give future JVs the best odds of success? Our review of a series of long-standing partnerships—supported by our 2014 survey and a series of structured interviews with JV partners 2 2. We interviewed 45 joint-venture managers. —identified three principles that made a difference in deal negotiations: investing more time and effort up front, working harder to cultivate and sustain the JV relationship, and standardizing key processes and learning mechanisms.

Invest more up front

As business negotiations go, JVs are marathons, not sprints. In their rush to complete a deal quickly and begin capturing value, inexperienced JV planners neglect the foundational steps of planning. Commonly, they jump too quickly into high-stakes discussions on specific deal terms such as how ownership is divided, who nominates key leaders, and what intellectual-property protections will be put in place. What they leave aside is an explicit understanding of how well those terms match the objectives of the deal.

In fact, most companies need to invest more time in the early phases of deal planning and preparing for negotiations. Our research has shown that many planners focus more than half of their negotiating time hammering out specific deal terms that should be addressed late in negotiations and only 20 percent of their time on the JV structure and business model, which should be addressed first. In contrast, those same planners believe that the phases of the process devoted to internal alignment and the business model represent 60 percent of the total value at risk, while the phase devoted to deal terms accounts for only 10 percent (Exhibit 1).

That disconnect between time spent and value derived reinforces damaging habits. Deal terms are important, but they are difficult to correctly perceive and negotiate without a clear articulation of broader issues including deal objectives, market considerations, and walk-away points. Negotiators who lack that foundation are poorly prepared to discuss deal terms. The cost can often be measured in time. For example, negotiations slow considerably when negotiators fixate on specific, preconceived deal terms even though other solutions could also work or when they belabor negotiations on all possible considerations instead of covering the most likely ones. Cost can also be measured by long-term damage to the JV. When negotiators fail to examine a potential partner’s deeper motives or to consider the regulatory landscape fully, companies can end up with deal terms that don’t adequately govern an agreement—and that can carry substantial costs.

For example, after a European company formed a JV to manufacture equipment in China, it unexpectedly learned that local regulators would compel it to transfer a larger equity stake to its Chinese partner, which threatened the deal’s feasibility. If the European company’s negotiators had conducted a more rigorous up-front process, they likely would have discovered that requirement. Instead, the venture’s launch was delayed, and the European company’s governance rights were diminished—consequences that might have been avoided.

Companies can avoid or at least mitigate such problems by investing more time in the early stages of planning. One US agricultural company requires extensive up-front business planning to confirm internal alignment and identify the motives of each counterparty. Planners there credit their rigorous preparation phase for making negotiations smoother.

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That’s consistent with our experience. We’ve found that companies benefit when they set up internal checks and balances to ensure that these foundational issues are articulated and confirmed internally before negotiations with partners begin in earnest. They should also engage potential partners in early discussions to confirm that they all agree on the goals of a joint endeavor, on their expectations of changes in the market over time, and on how the JV should plan to adapt as the market evolves. One global energy company learned this lesson the hard way when its partners in an existing JV objected that a new venture completed by the energy company would, over time, hurt the existing JV’s business prospects. As a result, a foreign court ordered the energy company to pay extensive damages for an initiative that never even launched.

For most companies, a good starting point is for planners to force a tough and thorough self-review to identify their own objectives, goals, and—even more difficult—their strengths and weaknesses as JV partners. Where possible, they should also convince a potential partner’s leadership to do the same, lest they get mired in internal misconceptions in the future.

Cultivate a trusting relationship

Negotiating JVs differs from negotiating mergers or acquisitions because the end goal is a sustainable, ongoing, trust-based relationship, not a one-time deal. Not surprisingly, a significant portion of our survey’s respondents indicated that the level of honesty and trust between the parent companies had a significant impact on the partnership’s overall success (Exhibit 2).

Positive initial meetings are important to establishing trust, but planners need to do more. Regular and ongoing business and social interactions with critical parent leadership-team members, including management off-site events and frequent, engaged board meetings, can help maintain trust and communication, reveal the breadth of motivating factors that influence a partner, and nurture a strong relationship even after negotiations conclude. As one energy executive observed, it is frequently only after many hours together in a “smoky room,” spread over the days, weeks, and months of negotiation, that the true motives of potential partners become clear. Understanding partner motives and securing mutual commitment to a deal beyond its financials will help ensure that all parties share the same expectations of ongoing JV operations.

In our interviews, numerous executives expressed concern about nontraditional objectives that may be motivating potential JV partners. These include sharing capital to upgrade facilities, achieving a relationship with a previously inaccessible third party, or increasing employment opportunities for a specific region. Such objectives often work to the disadvantage of a JV partner, as managers at a global conglomerate discovered. They negotiated a deal with a regional player that included transferring core technology into the JV in order to qualify for lucrative government contracts. Conglomerate executives at first applauded the deal, though the planners expressed concern that their partner’s motives might not be consistent at all levels of its organization. The venture subsequently reached a tipping point when, during an industry conference, the regional company’s senior executives boasted that they would start selling products based on the global conglomerate’s technology, but at a fraction of the price. This forced deal teams on both sides to revisit the partnership’s objectives to reaffirm the relationship’s durability.

Negotiators who understand a partner’s motivation, business needs, and capabilities well before closing a deal will be better positioned to establish a strong, candid relationship with shared, explicit expectations. Thorough research can highlight things that wouldn’t necessarily surface during negotiations but that could affect the partner’s involvement with the JV. For example, one energy company avoided a potential misstep after scrutinizing a partner company’s relationships with distributors before coinvesting in a local manufacturing operation. That analysis made it clear that the partner company’s CEO intended to use his own distribution company to exclusively channel products into a lucrative sales territory. After the energy company escalated its concerns, its partner moved ahead with the venture anyway but did not use the CEO’s distribution company.

How the best acquirers excel at integration

Standardize processes and learning mechanisms.

Unlike dedicated M&A teams that develop negotiating skills over multiple deals, JV teams tend to change from deal to deal, often due to shifting team-member roles and responsibilities or low JV deal flow. That creates little institutional memory around key processes, approaches for managing critical issues, and even partnership-specific negotiating skills. All of these things can be proactively managed, even if deal terms cannot.

Yet our survey of JV practitioners found that less than a quarter have a JV design-and implementation playbook—the kind of simple tool that most companies with M&A programs have had for years to reduce strain for the internal team and to ease discussions with potential partners. Without that kind of institutional knowledge, inexperienced teams often see JV negotiations as zero-sum games; they rigidly calculate wins and losses on every negotiating point. That leaves them with little flexibility to appreciate the needs of a partner interested in entering into a commercial agreement or reaching consensus on the terms of a mutually beneficial JV. The result can be a weak or ineffective deal. For example, one global company faced challenges investing in a regional JV because it focused too emphatically on legalistic deal terms to protect its own interests. That created an adversarial tone in the negotiations and undermined the collaboration needed to allow both companies and the JV to succeed. It also prolonged the process, to the frustration of the JV partners.

For most JVs, long-term success also requires an agreement process that is transparent and follows patterns of conversation established from the outset. At its core, this simply means communicating with all parties about how, when, and what to communicate. The eventual pattern of communication may vary from deal to deal, and not all parties will like it. That’s OK. Just laying it out keeps expectations aligned, focuses conversations, and reduces time-consuming delays. Otherwise, internal approval processes can cause bottlenecks, and not having the right people in the room can bring momentum to a standstill.

Standardized processes are especially helpful once a deal is under way, when adapting and restructuring can strengthen a partnership and increase financial returns—as long as the relationship is strong and the process has clearly allowed for adaptation. One aerospace partnership ensured all parties continued to agree on the goals of the JV by contractually committing to a standardized annual evaluation process. This included valuing each partner’s contributions to ensure that the risks and rewards for each partner remain consistent with the original objectives of the deal. In the event that one partner’s contributions did not match the other’s, the terms of the agreement required the lagging partner to increase its contribution. Together with a management team in which the CEO position is swapped on a regular basis, both partners have been able to maintain a decades-long relationship.

With so many companies planning to increase their JV activity in coming years, it’s worth investing the time in negotiations and planning to ensure the value of these ventures.

Eileen Kelly Rinaudo is a senior expert in McKinsey’s New York office, where Jason Roswig is a consultant.

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How to Create an Effective Joint Business Plan

For two businesses to form a joint venture, they need a plan that outlines the nature of the business coalition. A joint business plan defines the state of the companies involved, the purpose of the joint business and the partners’ responsibilities.

A joint business plan describes all the activities that these business ventures must carry out to achieve specific goals.

The relationship between the two parties and their goals must be clearly understood. After creating the business plan, it must go through a legal review to test its legitimacy. In your business planning, you work together in a collaborative relationship toward mutually agreed terms.

Business planning for joint ventures helps the parties leverage resources, reduce costs, combine expertise and/or enter foreign markets. A well-defined joint business plan is vital for any agreement and business strategy.

What is a joint business plan?

A joint business plan is a document that defines a merger between two or more companies. It describes the purpose and responsibilities of each partner in the incorporation. You may also see it as a collaborative process of planning where a supplier and retailer agree on both long- and short-term goals, including growth, finances and shared initiatives for profitability.

The purpose of a joint business plan is to design a win-win strategy for increasing consumer sales. This plan allows the partners to build a formidable relationship with retailers for mutual support and benefits. Having agreed upon goals, both parties share insights on a common vision for better support, customer growth, enhanced process and improved sales.

Business planning depends on interested parties sharing their plans with defined mutual growth opportunities. The partners can detail and share strategic planning, growth strategy, tactics and any area of competitive advantage.

The joint business plan is created once a partnership agreement is mutually beneficial and defined. Parties would draw up, approve and sign a formal contract before the execution of the plan. This is followed by a periodic review of joint scorecards based on necessary performance metrics to fine-tune strategies.

The joint business planning process comprises every possible logistic, including human resources planning and how to reach project milestones. Resource accountability is vital to building trust. Your best tool for transparent resource use and accountability is a resource planner .

If the employees of the venture will need to go to a different location, the venture will likely have difficulty planning their tasks and locations. TimeTrack Auto-Scheduling provides joint ventures with a transparent planning tool that reduces effort and enhances error-free shift planning.

TimeTrack Auto-Scheduling

Types of joint business plans

Standard plan.

This is often referred to as the working plan. It offers an overview of the company, outlines its goals, and details when and how entrepreneurs wish to achieve the goals. Such a plan helps secure funds, investments or loans. Within the plan, you could specify how you will use investor funds and their potential profits.

What-if plan

Sometimes things don’t go as planned in business. The what-if business plan defines the various roadblocks that a company might face as it strives to achieve its business objectives. The venture is largely at the whims of external factors, including the supply chain and stock market. You need to outline a predictable scenario to let business partners know how to recover their funds.

One-page plan

While a detailed plan is vital, there are instances where you will need to provide an abridged version of your plan. This one-page business plan outlines the summary of demand, solution, model, management team and action plan.

Start-up plan

A business plan for entrepreneurs, especially those in the early stages of their business planning, will need a start-up business plan. It is designed to give potential investors the bigger picture and outline how you want to achieve your goals. It often includes an executive summary, background, product and service descriptions, market analysis, costs and financial projections.

Expansion plan

This is a business plan that’s necessary when you need to scale your business and identify the necessary resources for its development. These could be financial investment, an additional workforce, new products or raw materials. This plan will detail the business background, needed resources and how they will contribute to growth and business expansion.

Operational plan

An operational business plan revolves around near-term goals , especially those you will work towards achieving within a year. It defines the activities your venture will focus on and emphasizes the role of the workforce and budgeting in achieving the operational goals. In most situations, the heads of departments are key participants in the operational plans because of the need for approval in achieving the goals.

Strategic business plan

This is different from the others because it focuses on how departments can work together. This venture plan is more comprehensive and requires senior-level approval before implementing goals. This plan answers the questions of how to achieve goals, what resources are needed and the execution plans for achieving the goals.

Joint business planning tips

Companies that benefit from a joint business plan

A joint venture exists mainly as a contract between new cooperating partners. In forming a joint venture, each of the business partners agrees to the assets they will bring to the table and how income and expenses will be shared.

While a joint venture is a corporation between two or more entities, each of the companies, be it an individual, company, corporation or group of individuals, still has its original legal status, though not all joint ventures result in a new business entity. These companies could be sole proprietorships or partnerships, limited partnerships, corporations, limited liability companies or non-profit organizations.

Examples of a joint business plan

Perhaps you have an online venture selling high-quality products at reasonable prices, while needing to increase brand strength. Such an example of a joint business plan outlines a company overview, executive summary, product and service offerings, marketing strategy, market analysis, budget and financial planning.

A joint business plan may be designed for ventures rendering menu services such as lattes, espresso, coffee, cappuccinos, and sandwiches. The business plan outlines an executive summary and studies your competition , target market, marketing plan, ownership structure and operational plan.

A joint venture could be designed around offering services such as shipping, faxing, postal and copying to residents to conduct research , create debate space and generate ideas. This example of a business plan will include an executive summary, a vision and mission statement, goals, objectives, and measures, organizational structure, marketing analysis and a financial plan.

Top strategies for effective joint business plan

In a joint business venture, there are risks which include rising complexity, cultural diversity, high failure rates and language diversity. The strategies detailed below will benefit the venture in navigating the challenges through effective joint business planning.

Strategic plan

Strategic global planning is an effective business practice for entering a new market. It helps to identify opportunities and threats. Before beginning strategic planning, be sure that a joint venture is the right action for you. Compare the strengths and weaknesses of the partners to confirm a good match. Your strategic plan should explain why you want to collaborate with that partner and what you hope to achieve, how to monitor trends and collect good data. Some of the reasons you may wish for a new joint partner may be to enter a new market, geographic expansion, financing, etc.

The right partner

The choice of partner is crucial, but what is more important is understanding the effectiveness of partners in delivering on their promises. Do your due diligence on your partner’s attitude toward collaboration, performance and level of commitment. What about sharing the same objectives?

Effective communication for a great relationship

After your investigation, if you deem the partner fit, find mutual ground. Communication is the key to a good relationship. Make sure your partner understands the foundation of the joint venture and agreement. Ensure they agree on human resources, financial contributions and goals. To consolidate the stability of your venture, be upfront, honest and transparent about your objectives.

Clarify how, what, and where

Be clear on the vision, strategic plans and scoreboard to ensure that everyone is energized and united about the goal. Define a common working pattern. This has to include conflict management, decision-making, collaboration, problem-solving and technology strategies. Focus on win-win solutions.

Track performance

Is everyone putting in the hours and making productive headway? One way to gauge this information is by time tracking. One of the challenges for companies whose employees work in shifts and in different locations is tracking attendance. TimeTrack Attendance Tracking helps companies monitor employees’ work hours and leave days, so that managers can stay up to date on potential delays.

TimeTrack Attendance Tracking

Once you have set out the goals and vision for the new venture, establish key performance indicators, the data you want to track and the process to measure those performance metrics. This involves creating a joint scorecard for each metric against trends and competition. The targets you set must guard against possible problems the partners might encounter.

Build trust

Your best joint business strategy is to build trust and create value, without which your partnership is bound to fail. Trust is the foundation of every partnership. It is an important factor in business planning. Without it, neither partner can succeed. How do you manage diverse cultures, interests and languages if the partners lack trust? Trust builds team strength and encourages creativity while promoting collaboration.

Good leadership

The cost of poor leadership is so high that you must not venture into joint partnership without assurance of good leadership. Focus on building good leadership and not just creating “bosses”. Leadership presents the biggest opportunities to change the performance narrative. Create a strong leadership team, from whom all employees can learn.

A joint business venture is not without its challenges. To ensure a successful collaboration, focus on a clear strategy, excellent communication, transparency and strong leadership.

I am a researcher, writer, and self-published author. Over the last 9 years, I have dedicated my time to delivering unique content to startups and non-governmental organizations and have covered several topics, including wellness, technology, and entrepreneurship. I am now passionate about how time efficiency affects productivity, business performance, and profitability.

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Joint ventures and alliances

Joint ventures and alliances are increasingly important strategic tools for companies as they respond to market disruptions and drive innovation and growth. A joint venture can provide the benefits of collaboration without the financial risks associated with an acquisition.

Brian Salsberg

EY Global Buy and Integrate Leader

Elizabeth Kaske

EY Americas Strategy and Transactions Buy & Integrate Leader

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EY-Parthenon Western Europe and Maghreb Transaction Strategy and Execution Leader

What EY joint ventures and alliances services can do for you

Joint ventures are used in almost all major industries, but the primary objectives of the ventures vary by industry and by company. Companies may participate in joint ventures to access scale, new markets, unique technology or to share risks. The diversity of reasons for adopting a joint venture or alliance — and the variety of assets contributed to the venture — dictate that each one requires customized legal, governance and operational design. A recent EY survey shows that a majority of CEOs are contemplating forming joint ventures, strategic alliances or alternative deal structures with third parties. Yet, few corporate development departments have joint venture expertise, as they are less common than acquisitions. And, in many cases, the executives who lead a joint venture transaction often transfer to the new entity, leaving the parent company with no internal expertise to manage the next one.

We help clients by bringing a true end-to-end lifecycle approach to a joint venture or strategic alliance. We provide integrated strategy, financial, operations, tax, risk, technology and human resources capabilities, enhanced by our proprietary digital tools such as Strategy Edge, Diligence Edge and Capital Edge. Across the joint venture lifecycle, EY professionals can help companies with:

Joint venture and alliance planning

• Strategy and business plan development
• Joint venture scope definition
• Partner selection assistance
• Commercial analysis
• Financial, legal and tax structuring assistance
• Negotiation assistance and valuation of asset contributions and equity stake
• Clean room analysis of synergy potential
• Stand-alone and one-time cost analysis

Forming a joint venture or alliance

• Integration and separation planning
• Regulatory, tax and legal entity planning
• Joint venture financing
• Financial reporting planning
• Board governance and structuring advice
• Dispute resolution and exit planning
• Tax, accounting and reporting impact for different entity structures
• Parent company service agreements
• Growth and synergy realization
• Integration management
• Organizational design
• Culture, communication and change management
• Financial and tax reporting
• Partner capital management

Joint venture and alliance dissolution

• Investigation and dispute resolution
• Valuation assistance
• Tax planning
• Separation planning and execution
• Integration planning and execution
• Carve-out financial statements

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Joint-ventures explained: definition, types and real-world examples.

Discover how joint-ventures can help you fuel growth, the different types and inspiring real-world examples of some of the most successful joint-ventures of all time.

In today's fast-moving landscape, joint-ventures have emerged as a powerful strategy for companies seeking to grow beyond their core business, expand their portfolios, and explore untapped markets. They deliver growth fast, at reduced risk and enable participants to form valuable strategic alliances. 

By merging diverse strengths, sharing unique resources, and tapping into collective expertise, joint-ventures provide a unique platform for businesses to grow, innovate, and conquer new frontiers. In addition, joint venture partners can achieve greater economies of scale, leading to: 

• Reduced production costs
• Increased purchasing power

Well-established companies can also leverage their market presence to enhance the credibility and trust in the new venture, creating buzz among customers and making it easier to attract customers, investors, and other stakeholders.

To give you a better idea of how joint-ventures can help you boost growth, let’s take a look at how they work, the different types, and some inspiring real-world examples.  

Follow these 11 key steps to form win-win startup partnerships

What is a joint-venture.

A joint venture is a strategic arrangement between two or more companies where they pool resources and expertise to achieve a common goal. Each company brings a specific set of resources to the table, including the capital, technology, personnel, or intellectual property, in exchange for a share of the revenues, expenses, and control of the joint venture.

Each participating company holds a stake in any profits, losses or costs associated with the joint venture. However, in most cases, the venture itself is its own entity, separate from each of its parent company’s broader business interests.

Key aspects of project-based joint-ventures include:

• Access to new markets: Joining forces with companies in a determined target market can provide quick access to new customers and distribution channels.
• Shared risks and costs: Joint-ventures allow companies to share the financial burden and risks associated with the new venture.
• Combining strengths: Partnering companies can leverage each other's expertise, technology, or resources to create a more competitive offering in the market.
• Learning from partners: Joint-ventures provide an opportunity for companies to learn from each other, acquiring new skills, knowledge, and best practices.
• Increased bargaining power: By joining forces, companies can often negotiate better terms with suppliers, customers, or regulatory authorities.

Joint-ventures vs partnerships: what's the difference?

Both joint-ventures and partnerships involve working together towards a common goal. In fact, you might say joint-ventures are a “type” of partnership, which is why they share several similarities (e.g. pooling resources, working toward a common goal, etc.). 

To help you understand some of the key differences, we compiled them below:

Definition:

Joint Venture: A structured collaboration that establishes a new entity to pool risks, resources, and share profits.

Partnership: A commercial arrangement with reciprocal agreements like a preferred supplier-client relationship.

Joint Venture: Specific task or project.

Partnership: Long-term business operation

Joint Venture: Temporary, limited to the project's completion

Partnership: Indefinite, ongoing

Joint Venture: Limited to the scope of the venture

Partnership: Unlimited, partners jointly liable

Joint Venture: Shared among participants

Partnership: Partners share risks based on their agreement

Joint Venture: Distributed according to established agreements

Partnership: Divided among partners as per their agreement

Decision-making:

Joint Venture: Based on the joint venture agreement

Partnership: Collaborative, typically per partner's contribution

Joint Venture: Funded by participants for a specific project or new entity

Partnership: Partners contribute as needed based on pre-established agreements

What types of joint-ventures are there?

Joint venture ventures come in all shapes and sizes, with participants ranging from individuals to small and large businesses to even governments. To give you a better idea of how joint-ventures work, we’ve listed the four main types below:

Project-Based Joint-Ventures

Project-based joint-ventures are formed to collaborate on a specific project, usually with a specific goal and timeline. The participants pool their resources, expertise, and capabilities to achieve the project's goals more effectively than they could individually. 

Once the project is completed or the desired outcome is achieved, the joint venture may be dissolved, and the partnering companies may go back to operating independently or collaborate on other projects in the future.

The key aspects of product-based joint-ventures include:

• A specific goal: These ventures centre on a specific project with a defined goal. 
• Duration: Generally time-bound, concluding when the specific project is completed or the goal is achieved.
• Structure: Tend to involve a new legal entity, a contractual agreement, or an informal collaboration between the partnering companies.

Example: BP and Reliance Industries

‍ In 2011, BP and Reliance Industries announced a project-based joint venture aimed at investing $20 billion in developing offshore oil and gas reserves in India. The goal was to accelerate the building of infrastructure to receive, transport and market natural gas in India.

This joint venture combined BP's technical and operational capabilities with Reliance's expertise in the Indian market to develop oil and gas reserves in specific locations. Established with a clear aim and future end date, this is a good example of a project-based joint venture. 

Function-Based Joint-Venture 

In a function-based joint venture, companies collaborate to perform a particular business function or activity, like marketing, sales, or distribution. This type of joint venture allows companies to leverage each other's expertise, resources, and networks in specific business areas, resulting in increased efficiency and market reach.

Key aspects of function-based joint-ventures include:

• Scope: Function-based joint-ventures focus on specific business functions.
• Duration: Tend to be ongoing, as they often involve continuous business functions, while other types are typically time-bound, concluding when the specific project is completed.
• Flexibility: Companies can choose to form a separate legal entity or operate under a less formal agreement, depending on their needs and objectives

Example : Starbucks and PepsiCo

Since 1994, Starbucks and PepsiCo have been working together to produce and distribute ready-to-drink coffee beverages. This joint venture, known as the North American Coffee Partnership (NACP) , has led to the creation of popular products like Starbucks Frappuccino and Starbucks Doubleshot Espresso. The result? Increased market reach, brand awareness and profits for both companies. 

Vertical Joint-Venture

A vertical joint venture is a strategic collaboration between companies at different stages of the supply chain (e.g. manufacturers, distributors, or retailers). The main goal of this type of partnership is to optimise the supply chain by combining the unique capabilities and resources of each company, leading to increased efficiency, cost savings, and better control over production and distribution processes.

Key aspects of vertical joint-ventures include:

• Scope: They tend to focus on the synergies between companies at different stages of the supply chain.
• Objectives: Primarily seek to enhance efficiency, reduce costs, and streamline operations within the value chain.
• Enhanced coordination: Enable companies to identify potential bottlenecks, improve information flows, and streamline operations.
• Quality assurance: Enable companies to maintain better quality control, ensuring that products meet specifications, regulatory standards, and customer expectations.
• Timely delivery: By working closely with supply chain partners, companies can better manage lead times, optimise inventory levels, and ensure timely deliveries. 

Example: Shell and Cosan

In 2010, Royal Dutch Shell and Cosan (a Brazilian producer of bioethanol, sugar and energy) created Raízen a joint venture focused on sustainable and competitive biofuels. The collaboration, combined Shell's expertise in fuel distribution with Cosan's experience in sugar and ethanol production. Since then, Raízen has become one of the largest bioenergy producers in Brazil, benefiting both companies by expanding their market reach and boosting profits.

Horizontal Joint-Venture

Horizontal joint-ventures are strategic collaborations between companies that operate within the same industry or market, often as competitors. These partnerships focus on combining resources, technology, or expertise to achieve a shared objective, e.g. expanding into new markets or creating innovative products. This type of venture can provide participating companies with a competitive edge by leveraging their collective strengths and helping them mitigate risk.

Key aspects of horizontal joint-ventures include:

• Objectives: Horizontal joint-ventures primarily seek to expand market share, pool resources, and achieve economies of scale by working together to enhance competitiveness. 
• Competitive Advantage: Provides a competitive edge by combining resources, expertise, and market presence, enabling companies to better compete against industry rivals. 
• Risk Management: By partnering with companies operating within the same industry, horizontal joint-ventures can help manage risks associated with market fluctuations, increased competition, or other industry-specific challenges.

Example: Hulu

Hulu was created as a joint venture between several media companies, including NBC Universal, News Corporation, The Walt Disney Company, and Providence Equity Partners. By pooling their extensive media libraries and resources, the participating companies were able to create a competitive streaming service that effectively addressed the growing demand for online video content. Over time, Hulu has expanded its offerings to include live TV and original programming, further enhancing its position in the streaming market.

The venture enabled the partner companies to adapt to the changing media landscape, monetise their content libraries, cross-promote their brands, share costs and risks, and develop original content, ultimately enhancing their positions in the market and creating new opportunities for growth.

Final thoughts

As illustrated in the examples above, joint-ventures can be a powerful tool for companies to accelerate growth and achieve strategic goals. With the right partner and effective execution, joint-ventures can help you unlock new opportunities and lead to mutual success.

Hungry for more inspiring examples? Be sure to check out our other joint venture article: 10 joint-venture examples you should know about.

Joint-ventures help you reduce risk, pool valuable resources, boost brand recognition and increase your overall chances of long-term success. We can help you find the right partner and strategy to bring your next joint venture concept to life. 

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JOINT BUSINESS PLAN: Top 7 Secrets To Successful Joint Business Planning&

• by Kenechukwu Muoghalu
• August 14, 2023
• No comments
• 8 minute read

Table of Contents Hide

What is joint business planning, what are the benefits of a joint business planning, what is a joint business plan , #1. have a plan, #2. choose the right joint venture partner , #3. communication, #4. define the where, what, and how, #5. monitor performance, #6. build trust, #1. how ready are you, #2. choose the right partner, #3. source business together, #4. ending a joint business planning, what if i lack the skills to create a joint business plan for myself, joint business plan faqs, what should be in a joint business plan, how do i set up a joint venture in the uk, how do you split profits in a joint business.

If you have plans to join a joint business, you have to understand the ethics of this venture before you proceed. You will need to set the right objectives for the business partnership. You will also need to have a joint business plan stipulated just for this course. There are a lot of processes, but not to worry. This article has exclusively explained what a joint business plan is and how it can help your investment, coupled with a sample template that can help make your journey easier. Let’s dig in!

Joint business planning is a collective effort between a vendor and a retailer. In this form of business, the two parties will be involved in the open sharing of information. However, it allows the joint parties to reach common ground and mutually agree on the business plan. I will give it a simpler definition, I need you to understand the basics of this Joint business planning. 

A joint business plan can also be said to be an agreement between two or more businesses in order to pool their resources to achieve a goal. It’s just like two or more people running a business. A joint partnership can be initiated in any business. A sample of this can even be found in jointly owning a personal trainer business and turning it into a joint business. 

They also share the risks and rewards of the investment. The joint companies also collectively own equal shares and put their heads together to make their investment successful. They work with trends, initiatives, and forecasted market environments. 

People can choose to open a joint venture for multiple reasons. It can be due to a business expansion, a new product development, or moving into new markets, especially internationally. Or just practicing the adage that says “two heads are better than one”. 

However, it can be difficult to build the right relationship that can boost the venture. But with the right resources, which includes having a joint business plan to serve as a guide, you would scale through. You should also know that Joint business planning with partners has proven to be one of the most effective ways to drive revenue and establish joint accountability.

Having talked about what a joint business venture is, now we will talk about having a plan that will serve as a guide through your investment. A joint business plan is a document that outlines a business coalition of two or more companies. This joint business plan is divided into several sections which state the companies involved, their purpose, and their responsibilities in the business. 

In summary, you can say that the plan contains temporary activities that can help achieve specific goals. What a proper joint business plan requires is to incorporate each party and make sure they clearly understand themselves and their goals. After the plan is been created, it will need to pass through a legal review just to test its legitimacy. 

Read Also: JOINT LOAN: Definition And All You Need To Know

Mind you, this joint business plan is above and beyond a standard business plan . It can also help you plan some measurable objectives, execution tactics, go-to-market, target account lists, and more. This business plan can serve you well, especially when it is for a joint business. Keeping track of all your business activities is a must because other people are involved in the investment. You can try checking your partner’s progress once in a while against the agreed plan.

Top 7 Secrets To a Successful Joint Business Planning

When it comes to joint business planning, there are secret tweaks that can help you scale through. You know Joint business comes with risks because of its joint partnership nature. Partnership most times can be diverse language, increased complexity, diverse cultures, and frequency of failure.

That is why we have formulated the top 7 secrets to having a successful partnership. Let’s take a quick rundown on them.

It always pays off to have a strategic plan on standby in your joint business. Your joint partnership should kick off with careful planning. To aim this, review your business strategy to see if a joint venture is even the best way to plan and achieve it. Consider the businesses involved, and compare their strengths and weaknesses to determine if it is a good match. Your strategic plan has to also answer why you want to partner with what you need to achieve from it. Is it for geographic expansion, new markets, or funding? Being clear will make the parties involved work towards achieving their objectives. 

Before going ahead to choose a partner, it is wise to determine how well they perform. Find out their attitude to collaboration and their level of commitment. Find out if you share the same business objectives with them, are the people you could trust? Do they have a nice reputation? These questions are necessary to determine who you are going into business with. Do your due diligence checks and don’t spend time having lunches with them. 

After your little investigation work on your partners, and hold a common ground with them if they fit. Communication can help build a relationship. Ensure that your partners understand what the basics of a Joint Business agreement really are. Are they clear on the goals, human resources, and financial contributions? This is the time to meet them, have those one-on-one meetings with them, communicate and make the best out of it. If you fail to plan like this, your joint business won’t be stable.

Create ways of working to energize and unite the partners involved. Map out the vision, strategic plans, and the scoreboard to make sure that everyone is following a common goal. Provide a common working pattern that includes decision-making, problem-solving, conflict management, collaboration, and technology. Find a way to deal with problems that occur, and look for win-win solutions instead of trying to score points off each other. 

When your partners have reached common ground on what the goal is, then let the work begin. You and your partners should also establish a clear performance indicator that allows you to measure your performance towards the goal. You should also set targets so that you can keep track of any possible problems that might occur. 

To be honest, this is the most crucial step in these secrets. You should understand that without trust, your Joint partnership will fail. There is no need to paint the truth to make it appear nice. Every team needs trust amongst themselves. Imagine having companies merging together, having diverse cultures, languages, and interests without trust. How do you think that ship will sail? When you have trust in someone, their differences turn into strengths. You will also tend to encourage creative challenges just to promote collaboration. This is an important factor that should not be ignored in your joint business planning.

This is another important variable that needs to exist in a Joint partnership because, without it, things will fail to happen. Invest in leadership, don’t focus on the senior leader, because even those leaders at the pointy ends will do just great. The reason for this action is that leaders tend to be the biggest opportunity to shift performance. You need to have a strong leadership team. And they must trust each other, connect, listen, and engage like no other. 

Joint Business Plan Template Checklist

To summarise all that is been said in this article, we have also included a sample template checklist that can help you prepare for and plan a successful Joint business. To make use of this joint business plan sample template effectively, you have to make sure that you follow all the options listed below. They include:

This is a joint business plan template you need to check off your list. Determine how ready you are, is your business also ready for the change? You can determine this by researching on the activities of other businesses. You can also carry out a SWOT analysis of your business. Compare your working methods with that of your partners and also involve your employees, tell them about your new plan.

This is been mentioned again for those at the back. It is crucial to choose the right partner. When choosing you should consider their existing customers and suppliers, their behavioral patterns, and also the available finances of the partners. 

Know the capabilities of your partners, and discover which has a specified responsibility. It can be sales activities, marketing, or new business generation. Each company should understand what they should work for and see that they achieve it. 

Most times, we should consider all possible factors because of the fear of the unknown. Your agreement with your partners should make provisions for terminating the joint partnership. In your agreement, make sure to include an exit strategy , specified ownership of assets in the business, and distribution of any weaknesses resulting from the joint venture. 

We got you, just right in time. We understand where it pains the most and we also understand why you would have so much difficulty creating a joint business plan for yourself even with the provision of a sample template. If this is you, then you need not worry.

Creating a business plan from scratch is no child’s play. It can even be harder while trying to use an existing plan to mold yours. You don’t have to if you don’t want to, because we have created a ready-made joint business plan just for your comfort.

This business plan does not require you to spend most of your day trying to figure out one section or the other. All you need to do is to apply directly to your joint business and watch it blossom. No long talks! Grab a copy of your joint business plan here !

It is certain that having Joint business planning can be difficult and challenging with tons of risks to take. But there is always a way around every hard obstacle. If you carry your Joint partnership and nurture it in the right way while following all the rules that apply, then you won’t have a problem.

These rules can be either creating a Joint Business plan or following some basic factors that can help maneuver your way through the investment or even using a sample template. When you follow the rules and secrets that guide them, then your investment won’t be the same. If it gets too hard, then contact us here.

To acquire a successful joint business plan, you need to ensure that both parties involved are capable of understanding each other’s goals. They should also understand the nature of their business and customer requirements. When they are on a mutual level, their foundation becomes strong.

To set up your joint business in the United Kingdom you will need to check the exact legal status of the new business. You can also begin due diligence on your joint partners. Know the financial commitment and how profits can be earned.

Before splitting the profits in a joint business, you must ensure that all business partners are in agreement about the profit-sharing. It can be split equally or on a different base according to the original agreement.

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What Is a Joint Venture (JV)?

• Understanding Joint Ventures

How to Set up a JV

Pros and cons of a jv.

• Paying Taxes
• Partnerships and Consortiums

The Bottom Line

• Types of Corporations

Joint Venture (JV): What Is It and Why Do Companies Form One?

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity.

Each of the participants in a JV is responsible for profits , losses, and costs associated with it. However, the venture is its own entity, separate from the participants’ other business interests.

Key Takeaways

• In a joint venture (JV), two or more businesses decide to combine their resources in order to fulfill an enumerated goal.
• They are a partnership in the colloquial sense of the word but can take on any legal structure.
• A common use of JVs is to partner up with a local business to enter a foreign market.

nvestopedia / Sydney Burns

Understanding a JV

Although a JV is a partnership in the colloquial sense of the word, it can be formed using any legal structure: Corporations, partnerships, limited liability companies (LLCs) , and other business entities can all be employed.

Despite the fact that the purpose of a JV is typically for production or research, one can also be formed for a continuing purpose. JVs can combine large and small companies to take on one or several projects and deals.

Here are the four main reasons why companies form JVs.

1. To Leverage Resources

A JV can take advantage of the combined resources of both companies to achieve the goal of the venture. One company might have a well-established manufacturing process, while the other company might have superior distribution channels.

2. To Reduce Costs

By using economies of scale , both companies in the JV can leverage their production at a lower per-unit cost than they would separately. This is particularly appropriate with technology advances that are costly to implement. Other cost savings as a result of a JV can include sharing advertising or labor costs.

3. To Combine Expertise

Two companies or parties forming a JV might each have different backgrounds, skill sets, or expertise. When these are combined through a JV, each company can benefit from the other’s talent.

4. To Enter Foreign Markets

Another common use of JVs is to partner with a local business to enter a foreign market. A company that wants to expand its distribution network to new countries can enter into a JV agreement to supply products to a local business, thus benefiting from an already existing distribution network. Some countries have restrictions on foreigners entering their market, making a JV with a local entity almost the only way to do business in the country.

Image by Sabrina Jiang © Investopedia 2020

Regardless of the JV structure, the most important document will be the agreement that sets out all of the rights and obligations of each party to the venture. The objectives, the initial contributions of the parties, the day-to-day operations, the right to the profits, and the responsibility for losses are all set out in the JV agreement. It is important to draft it with care to avoid risking litigation down the road.

A joint venture gives each party the opportunity to exploit a new business opportunity without bearing all of the cost and risk. Joint ventures, by nature, are riskier than "business as usual," and coopetition and sharing the risk is a wise move.

If the right participants are involved, the joint venture also starts out with a broader base of knowledge and pool of talent than any one party possesses on its own. For example, a joint entertainment venture set up by an animation studio and a streaming content provider can get off the ground more quickly—and probably with a better chance of success—than either participant could alone.

Cons of a Joint Venture

Embarking on a joint venture requires relinquishing a degree of control. The vital decisions are being made by two or more parties.

The companies involved must go into the project with the same goals and an equal degree of commitment.

Extreme differences between the participants' company cultures and management styles can be a barrier to success. Will the executives of an animation studio be able to communicate in the same language as the executives of a digital streaming giant? They might, or they might line up in opposing camps.

Setting up a joint venture multiplies the number of management teams involved. If one party undergoes a significant change in its business structure or executive team, the joint venture can get lost in the shuffle.

Paying Taxes on a JV

When forming a JV, the most common thing the two parties can do is to set up a new entity. As the JV itself isn’t recognized by the Internal Revenue Service (IRS), the business form between the two parties helps determine how taxes are paid. As the JV is a separate entity, it will pay taxes as any other business or corporation does. However, if it chooses to operate as an LLC, its profits and losses would pass through to the owners’ personal tax returns, as with any other LLC.

The JV agreement will spell out how profits or losses are taxed. If the agreement is merely a contractual relationship between the two parties, then it will determine how the tax is divided up between them.

JVs vs. Partnerships and Consortiums

A JV is not a partnership. That term is reserved for a single business entity that is formed by two or more people. JVs join two or more different entities into a new one, which may or may not be a partnership.

The term “ consortium ” is sometimes used to describe a JV, and there are similarities. However, a consortium is a more informal agreement than a JV. For example, a consortium of travel agencies can negotiate and give members special rates on hotels and airfares, but it does not create a whole new entity. The agencies still pursue their own businesses independently. In a JV they would share ownership of the created entity, jointly responsible for its risks, profits, losses, and governance.

Examples of JVs

Once the JV has reached its goal, it can be liquidated like any other business or sold. For example, in 2016 Microsoft Corporation sold its 50% stake in Caradigm, a JV it had created in 2011 with General Electric Company.

The JV was established to integrate Microsoft’s Amalga enterprise healthcare data and intelligence system, along with a variety of technologies from GE Healthcare. Microsoft has now sold its stake to GE, effectively ending the JV. GE has become the sole owner of the company and is free to carry on the business as it pleases.

Sony Ericsson is another famous example of a JV between two large companies. In this case they partnered in the early 2000s with the aim of being a world leader in mobile phones. After several years of operating as a JV, the venture eventually became solely owned by Sony.

Why Would a Firm Enter Into a Joint Venture (JV)?

There are many reasons to join forces with another company on a temporary basis, including for purposes of expansion, development of new products, and entering new markets (particularly overseas).

JVs are a common method of combining the business prowess, industry expertise, and personnel of two otherwise unrelated companies. This type of partnership allows each participating company an opportunity to scale its resources to complete a specific project or goal while reducing total cost and spreading out the risk and liabilities inherent to the task. 

What Are the Primary Advantages of Forming a JV?

A JV affords each party access to the resources of the other participant(s) without having to spend excessive amounts of capital. Each company is able to maintain its own identity and can easily return to normal business operations once the JV is complete. JVs also provide the benefit of shared risk.

What Are Some Disadvantages of Forming a JV?

JV contracts commonly limit the outside activities of participant companies while the project is in progress. Each company involved in a JV may be required to sign exclusivity agreements or a  non-compete agreement  that affects current relationships with  vendors  or other business contacts.

The contract under which a JV is created may also expose each company to liability inherent to a partnership unless a separate business entity is established for the JV. Furthermore, while companies participating in a JV share control, work activities and use of resources are not always divided equally.

Does a JV Need an Exit Strategy?

A JV is intended to meet a particular project with specific goals, so it ends when the project is complete. An exit strategy is important, as it provides a clear path on how to dissolve the joint business, avoiding drawn-out discussions, costly legal battles, unfair practices, negative impacts on customers; and controlling for any possible financial loss. In most JVs an exit strategy can come in three different forms: sale of the new business, a spinoff of operations, or employee ownership. Each exit strategy offers different advantages to partners in the JV, as well as the potential for conflict.

A joint venture between companies can open the way for expansion into a new line of business by each participant at a relatively modest cost. In fact, it sounds ideal: Each company contributes its own expertise but the cost of the venture is split among them.

It's only ideal, though, if the companies have a shared vision and an equal commitment to the success of the joint venture.

Internal Revenue Service. " Tax Information for Partnerships ." Accessed Aug. 29, 2021.

Microsoft. " Microsoft and GE Healthcare Complete Joint Venture Agreement ." Accessed Aug. 29, 2021.

BusinessWire. " Caradigm Names Neal Singh CEO ." Accessed Aug. 29, 2021.

GE Healthcare. " GE, Microsoft to Launch Joint Venture Aimed at Global Healthcare System Transformation ." Accessed Aug. 29, 2021.

Sony. " Sony and Ericsson Complete Joint Venture Agreement. " Accessed Aug. 29, 2021.

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How To Create A Winning Business Proposal For A Joint Venture: Step By Step Guide

• By: Bernirr
• Date: January 25, 2024
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business proposal for joint venture

Understanding what makes a good joint venture partnership, assessing potential partners for your joint venture, how to highlight your business expertise in the proposal, outlining clear goals and objectives for the joint venture, tips for presenting a winning business proposal for a joint venture, conclusion: maximizing success with effective business proposals for joint ventures.

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Home » Business Cycle » What is a joint venture

Joint ventures

  Whether you own a multi-million dollar business or are a small business owner , you’ve likely considered pursuing a joint venture , given the financial gains such a partnership has the potential to generate. Among the many advantages and benefits of a joint venture agreement is that they allow participants to pool resources, thus maximizing profits with minimal or no new investment. But there are several types of joint venture as well as many similarities to partnerships and other types of business agreements.  

Take the time to understand this type of business relationship and study some joint venture examples . You’ll find the clarity you need to make strategic business decisions for your company’s long-term health.

Discover your own business identity to create the ideal joint venture

What is a joint venture?

The classic definition of a joint venture is a business arrangement in which two or more companies combine resources on a project or service. The length of the agreement and what resources it will include will vary. Participant companies typically agree to split any profits the venture creates. As a result, joint ventures are potentially advantageous for companies in need of expanded resources with minimal (or no) infusion of capital.

Beyond the legal definition, what is a joint venture , really? The key is trust. You’ll be working with unknown entities from different companies, and in order to accomplish your shared goals you’ll need to trust them. Trust must be earned . You will be working closely with these individuals for what could be a lengthy amount of time. Are they the sort who might betray you? You’ll need to do your homework when the prospect of a partnership first arises and decide whether or not they deserve your trust.

HOW IS A JOINT VENTURE DIFFERENT FROM A PARTNERSHIP?

There are a few types of joint venture , but none of them qualify as a partnership. The main difference between a partnership and a joint venture is that a joint venture is limited to one particular venture while a partnership is not. Joint ventures can also include corporations or entities, while partnerships are only between two or more persons .

Joint ventures are also formed for a specific amount of time while partnerships are usually built for the long term. How long can a joint venture last? It depends on the terms of the agreement and the goals of the joint venture . This type of business deal is formed with a specific goal – to enter a new market, create a new product or enhance a service. The joint venture ends when the goal is reached, so the time can vary. They are usually formed for anywhere from five to seven years.

Another way joint ventures are different from partnerships is that they are governed under the laws of business formation and dissolution, whereas partnerships in the U.S. fall under the laws of their state, usually within contract law. In a joint venture , each party also retains ownership of their property and is only responsible for expenses specific to the agreement. That’s a major benefit, among others.

What are the advantages of joint ventures?

The benefits of this type of business relationship center on the acquisition of (shared) resources without an (excessive) outlay of capital. This sharing of resources facilitates companies’ expansion into new markets, allowing for relatively low-risk, scalable business growth . 

Joint ventures are also highly flexible. Those who participate don’t need to form a new business entity to create the venture’s collaborative product. The partners are also not bound to one another after the expiration of the initial partnership contract; each business retains its unique identity and autonomy, and each may carry on business activities unrelated to the joint venture . As such, joint venture arrangements streamline the process of business innovation while minimizing its risks.

A joint venture could be the right choice for you if you want to enter a new geographic market or improve your visibility among a certain target audience . They are also useful to gain technical expertise or intellectual property that you otherwise wouldn’t be able to access or to improve the advertising and marketing strategies of both companies. What is a joint venture if not an opportunity to pool resources?

What are the risks of joint ventures?

No business venture comes without risk. The main risk of a joint venture is that when something goes wrong, both parties are held accountable, rather than only the party who was at fault. While most businesses entering joint venture agreements are limited liability companies (small businesses), each participant is equally responsible for legal claims arising from the joint venture , regardless of its level of involvement (or profit) from the venture.  

So are joint ventures 50:50? Not necessarily. Each party retains ownership of their property, and depending on the terms of the joint venture contract, you and your partners may contribute resources unevenly. This can lead to problems if the profit-sharing arrangement doesn’t adequately compensate one side or the other.  

Engaging in a joint venture may limit your opportunities to interact with other organizations, particularly if your contract contains non-competition or non-disclosure clauses or limits the use of non-specified vendors. This can end up stifling the constant innovation your company needs to continue producing value and creating the ultimate customer experience .

Whether a joint venture is worth it depends on your risk tolerance . If you do decide to enter into this type of agreement, make sure you choose your partners carefully so that you don’t drag down the quality of your own company. Teaming up with people who don’t share your company’s core values can negatively impact the way your business operates and lead to trouble with the products you produce on your own. And always take the time to draw up a detailed and specific contract.

What is involved in a joint venture agreement?

Those who enter into a joint venture need a contract that spells out the parameters of their involvement. This joint venture agreement describes the purpose of the arrangement and sets up everything both parties need to start their shared venture. This includes profit and loss details, ownership allocations and a termination clause. Other parts of the agreement can include how the venture is staffed and structured, the scope of the venture and what determines the success of the venture.

Do you need an exit strategy in your joint venture agreement? It’s tempting to think you do not – because joint ventures are made to reach a certain goal, you may think that reaching your goal automatically terminates the agreement. But you still need a strategy for how you will divide profit and loss, new assets and increased market reach once you reach your stated goals . You can choose to sell the business created by the joint venture or restructure it into a new organization. Large joint ventures can even transition ownership to employees.

How do taxes work in a joint venture?

What is a joint venture from a tax perspective? Unlike a partnership, a joint venture is not recognized as a taxing entity by the IRS. Instead, the joint venture agreement determines how taxes will be paid. If the venture operates as a separate business entity, it will pay income taxes just like any other type of business. In the agreement, the parties involved specify how they will split profits and losses and how they will pay any taxes that are due.

Types of joint ventures

There are two major types of joint venture that two or more companies might participate in. These joint ventures might affect one particular product or an entire product or service line.

1. Personnel-based joint venture

This type of partnership covers both the people themselves and the expertise they bring to the table. Several staff members from Companies A and B are placed on a project. Think multiple programmers to design or upgrade an app, or several architects to refurbish an out-of-date building.

2. Equipment-based joint venture

This type of venture involve s technology or machinery. For example, Company A lacks the manufacturing technology to produce its new furniture line. It partners with Company B, which has the necessary equipment but lacks designers. The advantages of a joint venture a greement in this example are clear: t he collaboration allows Company A to create its desired innovation without an outlay of capital, while Company B gains a percentage of profits without incurring development costs.

Joint venture examples

To really understand the answer to the question “ What is a joint venture ?” and create your own successful agreement, you must model the best . These joint venture examples involve some of the world’s most famous businesses.

• Caradigm (Microsoft Corporation + General Electric)

One of the better-known joint venture examples is the Caradigm venture between Microsoft Corporation and General Electric (GE) in 2011. The Caradigm project was launched to integrate a Microsoft healthcare intelligence product with various GE health-related technologies. 

Another famous example is Hulu, which began life as a joint venture between NBC Universal, Providence Equity Partners, News Corporation and then The Walt Disney Company. Launched in 2007, Hulu was originally conceived to run programming from these four companies and their respective subsidiaries. Hulu has since developed its own programming. 

• Barnes & Noble + Starbucks

You’ve probably noticed all of the Starbucks placed within Barnes & Noble bookstores – but did you know that’s actually a joint venture example ? Both companies win: Starbucks sells more coffee, and Barnes & Noble provides an excellent customer experience with its in-store cafes.  

• Fiat Chrysler + Google  

Fiat Chrysler and Google formed a joint venture in 2016 to develop self-driving cars. Why does it work? Google is a tech giant, but they’re not an automaker. The deal with Fiat-Chrysler more than doubled its self-driving automobile assets.

• Samsung + Spotify

In 2018, Samsung and Spotify struck a deal to make it easier to use Spotify on Samsung devices. A year later they expanded that agreement and began including Spotify as a pre-installed app on many Samsung phones – even giving consumers six months free.  

• SABmiller + Molson Coors Brewing Company  

This joint venture example involves entering new geographical markets: MillerCoors is a joint venture between Molson and SABMiller intended to distribute all their beer brands in Puerto Rico and the United States.  

Ford + Toyota

Ford and Toyota began working together in 2011 to develop hybrid trucks. Toyota brings the hybrid technology knowledge, while Ford brings its leadership in the American truck market – the perfect example of a joint venture created for access to expertise and intellectual property. 

Participating in a joint venture partnership requires your absolute A-game. Whether you’re just about to jump into business as a joint venture or have been in business for years, Business Mastery is the experience you need to grow your company and drive your success. Enroll today to discover more success tomorrow.

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FREE 5+ Joint Venture Business Plan Samples in PDF | MS Word | Google Docs

Businesses operating on their own is slowly starting to become a thing of the past. More often than not, businesses and corporations nowadays are slowly getting involved in collaborated projects with other companies in the same industry. Pooling all of their resources and combining them altogether to develop a new product or work on a new venture, operate in different markets , and increase operational capabilities. Such an idea is called a joint venture . A joint venture business allows other businesses and companies to collaborate with each other to ultimately grow and gain access to markets or different expertise that are just beyond their current capabilities. Partnering with other companies mean that they share specialized expertise such as technical skills or intellectual property. As well as mitigate the risks and costs of developing a new produc t or work on a new market.

Joint Venture Business Plan

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Businesses are not simple entities to manage, especially when you are operating two different companies trying to make them work into one single venture. It’s extra chores to keep track of everything else making sure that every component the business is covered. This is why creating a proper layout for a comprehensive plan is very important for businesses and corporations of all shapes and sizes.

A layout helps keep everybody affiliated with the business, especially managers and supervisors , on track for everything that may be encountered during the overall duration of the business, or the joint venture. A good and comprehensive plan just brings the concept together really well and make every business operation as smooth as possible. This is where business plans come into the picture. Business plans are largely important documents that any business and corporations need to have a guideline or a roadmap that a business will follow in order to achieve its goals. Operating without a business plan is generally not a good idea.

In fact, those who venture without one, doesn’t seem to last for very long. Creating and sticking to a well written business plan can have a wide range of benefits for your company such as being able to come up with ideas without investing too much resources in it. To properly get to know what a business plan is and how it works, take a look at these joint venture business plan samples that we have listed right below. After getting to know much about the document, you can then use these as a guide or even as a template for the development of your own plan.

• Google Docs

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A business plan is an essential document that should describe how a business would define its objectives and what steps it would take to achieve its goals. A business plan lays out a rough map for the whole company to follow from different standpoints of different departments. Marketing, financial, and operational. Business plans are largely important documents that is usually used to attract an investment even before the company has established an impressive track record, like trying to attract prospective business partners for the joint venture. Although these are more useful for new businesses and companies, every company should be able to establish a well written business plan.

This should enable them to review and periodically update to see if the established goals have been met and how the circumstances that they are currently working with. A good business plan should be able to outline all the projected and estimated costs of the joint venture and the pitfalls of each decision that the management makes. Even among similar companies in the same industry, it is quite rare for business plans to be identical in composition. Companies tend to have their own way of dealing and approaching their own business prospects, even in a joint venture.

The length of a business plan varies greatly depending on the nature and scope of the joint venture that you are currently covering. Usually all of the information should fit into a 15 to 20 page document. Although no two joint venture businesses are alike, they do work with almost all of the same elements. Below are some common elements of a business plan which will be discussed in more detail.

• Executive summary This section outlines all the company and the information related to the joint venture’s mission-vision values, company leadership, employees, operations, and location. The executive summary should essentially talk about what the company is, the nature of the business, and all the other necessary basic information.
• Products and services This section is where the joint venture should outline the products and services that it will offer. It includes pricing, product lifespan, and the benefits which customers receive. Other factors that can be included in this section are manufacturing and production processes, patents, and proprietary technology.
• Market analysis A company needs to have a clear idea of the target customers and their demographic. It should outline who or what the competition is and will give you a better idea on how stay ahead of them.  It will also describe the expected consumer demand for the product of the joint venture and how difficult it would be to take advantage of the market.
• Financial planning The company should include its financial planning to attract the readers of the plan. Financial statements, balance sheets, and other financial information that can help with gauging the attention of the audience. For joint venture business plans, managers will have to present the target demographic and the estimated income within.
• Budget Every company needs to have a proper budget in place. Including costs, staffing, manufacturing, development, marketing, and all the other movements that require expenses.

A joint venture is a project that which two or more companies pool their resources and combine them to gain a significant advantage in the market.

• Situation analysis
• Product or service positioning
• Setting objectives

A joint venture business can typically last anywhere from 5 to 7 years. Depending on the terms that have been agreed upon between the participating companies.

Something that you should remember is that business plans are not supposed to be static documents. They should remain ‘live’, susceptible to change and adapt overtime. Adapting to the changes to the circumstances that the joint venture is working with and updating the business plan when necessary. It should be growing, evolving, together with your venture.

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AllianceBernstein, Societe Generale Launch Cash Equities & Research Joint Venture Bernstein

(RTTNews) - AllianceBernstein Holding L.P. (AB) and French financial services provider Societe Generale S.A. (SCGLF.PK, SCGLY.PK) announced the official launch of their joint venture Bernstein, a cash equities and equity research business.

The companies had announced the plan to form the joint venture in November 2022.

The closing of the deal has been approved by the relevant regulatory and antitrust authorities. The new brand capitalizes on the Bernstein name with a Societe Generale Group byline.

The new JV Bernstein employs over 750 staff and provides institutional investors, corporates and financial institutions with premier investment insights into North American, European and Asia Pacific equity markets.

Robert van Brugge, previously CEO of Bernstein Research Services, has been appointed CEO of Bernstein. Stephane Loiseau, previously Head of Societe Generale's cash equities business, appointed as Deputy CEO of Bernstein.

The joint venture is organized under two separate legal vehicles with a head office in New York covering North America and a head office in London covering Europe and Asia. These are complemented by major hubs in Paris and Hong Kong, and multiple regional offices.

Societe Generale and AllianceBernstein have agreed for Societe Generale to eventually own 100% of both entities after five years.

With Bernstein, Societe Generale will now offer its clients a comprehensive suite of global services across the equities value-chain.

Slawomir Krupa, Chief Executive Officer of Societe Generale, said, "This joint venture illustrates Societe Generale's capability to develop innovative pathways to further expand our client offering as we increase our value proposition for the benefit of our investor and issuer clients, leverage synergies within our Group, and grow our revenues sustainably."

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Tata Technologies Shares Jump 7% On Plan To Form Joint Venture With BMW

Reported By : Aparna Deb

Last Updated: April 02, 2024, 11:28 IST

New Delhi, India

As of Tuesday, the closing price of the shares stands at Rs 7.13.

In the new company that will be incorporated, each partner will hold 50 per cent stake.

Shares of Tata Technologies Ltd, a subsidiary of Tata Motors Ltd, rose 7 per cent on April 2 after it announced a joint venture with BMW Group for the development of software for the German luxury automaker. In a filing to stock exchanges, Tata Technologies said the joint venture would aid BMW Group in engineering premium products, delivering great digital experiences for its customers and propelling its digital transformation journey.

On April 2 at 10:25 am, Tata Technologies’ shares were trading 7 per cent higher at Rs 1,123.15. The all-time high of the stock is Rs 1,400.

The focus would be on delivering automotive software, including software-defined vehicle (SDV) solutions for its premium vehicles and digital transformation solutions for business IT, Tata Technologies said.

“This collaboration between Tata Technologies and BMW Group represents a shared vision of innovation and excellence in automotive engineering and digital solutions,” it added.

Tata Technologies said it would initially incorporate the company as a wholly-owned subsidiary. Once closing conditions (including merger control approval) are met by both parties, BMW shall invest in the said incorporated company to hold 50 per cent of the post-investment equity share capital in that entity.

“From the inception of this joint venture, 100 trained and experienced Tata Technologies professionals will ensure robust and immediate contributions to software projects. Call and Put Option to shareholders, Shareholder Reserved Matters, Deadlock and other standard clauses on management of the company, governance and administration, exit, have been included in the joint venture agreement,” it said.

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Reporting by Phuong Nguyen Editing by Mark Potter

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Meta pushes back on US FTC's bid to amend 2020 privacy settlement

Meta Platforms has rebuffed an attempt by the U.S. Federal Trade Commission to amend a 2020 privacy settlement, noting that it had voluntarily disclosed two technical errors related to its Messenger Kids app to the agency.