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Partnership Success Story: Joint Venture returns 100X in 12 months

Written by: Sarah Gerdes

Article Overview: The uniform manufacturing business is far from sexy. But any entrepreneur will tell you that a 100 times return on investment from a joint venture partnership turn heads, regardless of the industry. Blumenthal Uniforms realized the power of partnerships when it created a JV to expand its customer base, improve margins and gain a foothold in an entirely new industry.

Partnership Success Story: Joint Venture returns 100X in 12 months

Market:
Retail Distribution

Company profile:
Blumenthal Uniforms, a privately held fifty-year-old retail business servicing the clothing requirements for private and government professional service providers.

Situation:
Blumenthal had grown into a regional leader of uniforms by adhering to a commitment to one-on-one customer service. This had led to client relationships of more than thirty-five years, steady growth and good margins. However, exponential growth could not be achieved outside its existing territory without sacrificing human contact.

Issue:
Blumenthal’s executive team determined national growth with the existing business model was impossible.

Value-basis at Blumenthal:
Blumenthal has existing intellectual property in the retail sense of the word. It is one of approximately 300 uniform companies in the United States authorized to sell uniforms to the United States Post Office. Additionally, its long-standing business track record enabled Blumenthal to develop preferred delivery and pricing with vendors. Blumenthal executives realized these two company attributes would be compelling to a potential partner.

Partnership strategy:
Joint manufacturing, retail and marketing partnerships were pursued and discounted after revenue splits and customer ownership issues continued to surface. Eventually, the Blumenthal team realized a joint venture with a mail-order uniform company would provide national expansion and high revenue with nominal risk.

Partnership formed:
Joint venture with Postal Uniforms Direct in July 2000

Value proposition:
Postal Uniforms Direct (a new company) run by an established discount uniform company’s manager. Using its on-line ordering, inventory control, warehousing and distribution supply chain, Postal Uniforms Direct takes advantage of Blumenthal’s preferred vendor relationships and pricing as well as its postal uniform license. In return, Blumenthal receives an equitable share of profits without increasing output.

Risk Factor:
Low for the manager of the new entity and Blumenthal; each firm had a track record of running efficient and profitable businesses.

Initial investment:
Thirty thousand from Blumenthal, at the time a ten million dollar business and twenty thousand from the manager (partner) of Postal Uniforms Direct.

Partnership return on investment:
Initial investment returned within the first twelve months of operations. According to CEO Mark Blumenthal, his original investment has yielded a “multi-100 time return on investment”.
For more information on Blumenthal, contact: www.blumenthaluniforms.com

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  Why I Avoid Partnerships and Prefer Joint Ventures.

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Related Forum Posts
Re: [JOINT VENTURE] Want FREE Staff? Want to Scale Up Massively? - [quote="Joint Venture":3738ldxh][quote="Ringo":3738ldxh]1) Credentials? Any website? Any client list? 2) Where do you get your staff from? How? I mean if i really am going to hand over a lot of sensitive information to be handled by staff of your choosing, I'll need to know how you operate with total transparency.[/quote:3738ldxh] Ringo, 1) Send me an email with your proposal and if I like it I shall disclose all that your need. 2) That's my USP! Total transparency is a must when JVing with someone. Let me know your proposal and we may discuss it. In regards to staff dealing with your sensitive information, compartmentalize the data. Have different teams deal with only a section of the whole picture. [quote="ideasuniversity":3738ldxh]How long have you been doing this? And what are your success rate?[/quote:3738ldxh] Joint venturing? I have done JVs before and had good success. This JV? Brand new. New source of staff. Success rate? I've made a good bit money! [quote="Trent Brownrigg":3738ldxh]This same person posted this exact same post several times at another forum I moderate. Now, he is posting it here as his very first post. I consider that to be a spammer![/quote:3738ldxh] I consider it being proactive! Sorry if I have stepped on anyone's toes. Not my intentions. Look forward to reading more of your emails, Alan[/quote:3738ldxh] Let have your website.
Re: [JOINT VENTURE] Want FREE Staff? Want to Scale Up Massively? - Hi Alan, Welcome to the forum! [quote="Joint Venture":2bfdqwzb]Total transparency is a must when JVing with someone.[/quote:2bfdqwzb] What about when inviting people to send you their proposals...? Cheers, David H
other ways to prequalify a business - Hi Kevin, Yes, you can hire someone to appraise a business for it's value to justify an asking price and that the business is doing well. However, banks and loan brokers / institutes will want to review the tax returns and any other documentation they can get their hands on so they can compare it to the tax returns. When an appraiser values a business, although it could be very accurate, the lender does not consider that "official" documentation. It's best to obtain as much documentation as you can from a seller, especially tax returns and compare all the other documents to the tax returns.
Don't leave your Wallet on the table - Targetzone, Evan has great points on targeting you package. Also I read the revenue model you mentioned and i believe you are leaving a lot of money on the table. Aisde from making just $15/sale of a package you could also be making income from sales generated after the people use the coupon on their second and ongoing visits to the Service/Product company. I've sent you a PM - We can talk more advanced strategies. BTW - I'm a Dollarmakers Member and have taken the Joint Venture BootCamp 101 and highly recommend it if you wish to pursue this idea. PM me privately and we can talk.
Re: need a capitalist to hear me out - If you have solid business plan, there are thousands of Angel Investors and Venture Capitalists that will fund your project. Google "Venture Capitalist" and you will get tons of investors who are ready to fund your project


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