Joint-Venture Agreements Start With a JV Contract and Mutually Agreed Upon Goals and Objectives

Knowing the value of having a joint-venture agreement that benefits both parties is important to implementing a successful JV project. The agreement (or formal contract) should have the following key elements:

First, a formal contract that outlines the scope of the project, the product and/or service offerings, the terms of acceptance, as well as specifically detailed time lines and milestones that influence the outcome of the over business relationship.

Second, create a formal strategy. Make sure within the documentation, you define each party's roles, their responsibilities regarding the joint venture and to each other and list the operational functions that each one has. Many times when you have a joint venture, sometimes people may not have skills that are required for proper execution.

You want to make sure that you fill in all the nooks and crannies so that everyone is on the same page and focus on what need to happen, when, where and for what specific reasons.

Third, document the results you are looking for before you start. Doing so will eliminate the guessing game and give everyone a chance to focus on what's important.

Fourth, engage with each other in common and meaningful goals that make sense and make sure that you time the launch of the joint venture correctly. All too often, people will launch JVs and forget about other products and/or services that may be coming to market that perhaps other partnering companies are working with, and it may cause a problem or delay in launching yours.

Finally, act on your knowledge. Make sure that everyone takes action as documented and follows through. It's not about being militant or holding everyone to specific goals; quite to the contrary.

I find it very common that when people get immersed in joint ventures, they don't take the time to follow through on the JV.

The benefits of sticking with it are:

1) You're going to find out how good your Joint Venture Partner is.

2) You will learn a lot about yourself and your business as a whole.

3) It can only benefit you to make sure you there's a formal agreement with mutually agreed upon terms and conditions.

Taking the time to think things through and act on the aforementioned knowledge will help you grow you business and achieve your goals and objectives faster.

Michael G. Perry is a published author and the owner of Coprofit.