How to Joint Venture Between Two JV Strategic Alliance Partners


Knowing the true value of having a joint venture between two separate entities is a very important step that you should strongly consider at the beginning of the joint-venture process. All too often when two parties get together, many times one party is not really aware of what the other party is doing to make the joint venture between the two parties successful.

What's important to understand is that when you move forward in time, there are certain parameters that you can operate a joint venture within that will make a huge difference on the relationship.

The five parameters you must be thinking about are listed below:

First and foremost, make sure that you have some type of contract or mutually agreed upon understanding that binds you with the joint-venture partner and ties in specific goals and objectives that are related to the joint venture, itself.

Secondly, make sure that each party knows what the correct strategy is, how the strategy will work and also make sure that you define each others' roles, your responsibilities and set some timelines that will help you in the process. Sometimes people will use Microsoft Project or other project-management software applications to help with the overall strategy.

Thirdly, make sure that you interact a lot on the front end of the joint venture. Once a joint venture is implemented and people become engaged, you want to make sure that there's a lot of dialogue between both parties and that the back-and-forth transmission of information and knowledge is really set forth from the get-go.

Another key is to have formal expectations. If you can set expectations on the front end of the joint venture and have more of the divide-and-conquer approach, you'll find that the joint venture works a lot easier when expectations are defined well in advance.

One thing you're going to want to avoid is the "what if" syndrome. You don't want people asking "what if?" or "why?" You want to be able to define it, and what that presents is "management by exception." Management by exception is good. It helps both parties identify their roles and responsibilities, and only deal with the exceptions, so keep that in mind.

Also know that during your first joint venture, you're probably going to make a few mistakes. But by getting things down on paper and having a formal plan written, you'll find that the joint-venture process is really easy between two parties when they team up together.