Do I Need a Legal Agreement for a Joint Venture?

admin — Tue, 30 Jun 2009 03:59:23 +0000

The short answer to this question is…yes. However, few things in life are so cut and dry. Joint venture partnerships can be entered into with anyone. It can be with your neighbor next door who has an affiliate business, or with a person you’ve only read about who lives in another country. Due to the variety of joint venture partnership possibilities a legal agreement many not always be needed.

Here are a few pros and cons to signing a JV partnership legal agreement.

Pros:

-Everything is spelled out. A joint venture partnership legal agreement will leave no room for interpretation, miscommunication, errors or frustration. Absolutely everything from who handles what task, to how profits are tracked, to how each partner gets paid can be detailed explicitly. This means there will be no questions halfway through the project about who handles the next step or what profit percentages were originally agreed to.

-Less stress. When everything is clearly detailed and written down, it can take the stress off of the relationship and allow the partners to work together more amicably, and to be more productive. This can be particularly important when you’re working with someone for the first time or you have concerns about the partnership.

-Checks and balances are outlined. A legal agreement makes it possible for checks and balances to be put into place and to be followed through on. For example, if one partner is handling the marketing of a joint venture product and the payment of the profits, the other partner should have a system that enables them to keep track of the sales. That way there is no uncertainty about whether each partner is getting paid fairly.

-Payments are defined. People tend to get caught up in the money. A legal agreement will define who gets paid what, when and how, so that there is no uncertainty, resentment or questions.

- In the event of a disagreement, a legal agreement gives you recourse.

Cons:

-Trust. A legal agreement can start things off on the right foot, but in some circumstances it can start things off on the wrong foot. It can create a sense of mistrust.

-Not always necessary. A legal agreement isn’t always necessary. If you’re working with someone whom you are comfortable with, whom you have worked with before, or whom you’re friends with, then a legal agreement may not be necessary. It is fine to simply write down what each person will take care of and how you’ll split the profits and go from there.

If you choose to use a joint venture agreement, you can find many legal forms online. Simply type “Joint venture agreement” into your favorite search engine and you’ll have plenty to choose from. Some of the forms are even free.

Five Things Not to Do When Approaching A Potential Joint Venture Partner

admin — Tue, 30 Jun 2009 03:42:25 +0000

Approaching a potential online joint venture partner can be intimidating. Here are five Dos and Don’ts to get your partnership off on the right footing.

1. Don’t have a negative attitude. There’s nothing that ruins a proposal more than going into it thinking, “This is never going to work.” Or, “Why would they want to work with me?” It is self-sabotage. If you go into a meeting or contact a potential joint venture partner with a negative attitude, you’ll be right. They won’t want to work with you and it won’t happen.

Do approach your potential partner with a smile, even if you’re talking to them on the phone or sending an email. A positive and enthusiastic attitude can and will be felt, and it will make a difference. Go into a potential partnership with an eye toward the possibilities and start things off right.

2. Don’t tell your potential partner what’s in it for you. Your potential JV partner doesn’t care to hear how much you could use the extra profits, or what you stand to gain from the partnership. Put yourself in their shoes: would you like someone to approach you and tell you how much they would like to partner with you because it would help them? Probably not.

Do tell your partner what’s in it for them. Stress the benefits for them. How much are they going to make? What do they need to do? Will they benefit from building their opt in list? Will they benefit by increasing their product base? Will their credibility improve? Present your offer in the most beneficial light for your partner.

3. Don’t sell, particularly on the first meeting or communication. No one wants to be ‘sold’ to, and jumping in with a heavy pitch is a turn-off. Again, put yourself in your potential partner’s shoes. How would you like to be approached for a joint venture partnership? Chances are you wouldn’t want to hear a sales pitch.

Do praise and present. Tell your potential partner why you want to partner with them. Research your potential partner ahead of time and impress them with your knowledge of their business. Instead of giving a sales pitch, consider it as a presentation. Lay out your proposal, highlighting the benefits to your potential partner as you go. Be ready and willing to listen to your partner’s ideas – in fact, it may be a good idea to ask them questions as you go so they feel involved in the presentation.

4. Don’t expect an immediate answer. You’re excited about working out a JV partnership and that is understandable; however, you’ve had plenty of time to think about it. The idea is new to your partner and they need time to mull it over.

Do give your partner time to think about it. You can either make a date to check back in to see if they have any questions, or you can leave it open ended and contact them again if you don’t hear from them after a few days.

5. Don’t stick to your guns. Going into a partnership with an “It’s my way or the highway” mentality is a sure way to end a relationship before it starts.

Do be prepared to negotiate everything. Remember that in the long run, a joint venture partnership will still bring you profits, more contacts and customers, and a new business partner. Be willing to negotiate on tasks and profits – it not only demonstrates that you’re a smart business person, it shows your partner your willingness to work with them.

Follow these five dos and don’ts and your presentation is sure to be a hit. Good luck!

Tags:Joint Venture,joint venture partner,online joint venture,online joint venture partnership,partnership

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Do I Need a Legal Agreement for a Joint Venture?

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