Some common questions that come up for people who are unaccustomed to the Joint Venture mindset can deprive them of the wonderful benefits of this powerful business tool. Preconceived ideas, misconceptions and biases, often the result of collectivist conditioning, about what is ethical and right, deny them access to the potentially exponential value and reciprocity inherent in the JV mindset. This is not surprising, given the fact that most small and medium business owners, and especially employed (and self-employed) people still operate with cumbersome, expensive and risky industrial age business paradigms that limit, tire and frustrate them. Think cold calling, fear of competition, scarcity thinking, risky advertising and marketing, high overhead, selling time and minimally productive “business networking” meetings.
“I can’t ethically refer someone or some product or service if I am receiving compensation for any resulting business.” Yes, you can. In fact, when the service provider pays you for the referred business, thereby radically reducing his risk and acquisition cost, his price and exposure are lower, resulting in a better deal for the referred customer. The vendor is paying to acquire the customer anyway. Instead of risky advertising that often doesn’t work, why should he not pay for results instead of promises and thereby stay in business long enough to provide the on-going service and support he is promising to his customers? The marketing and advertising choices of any vendor have nothing to do with his customers. And in a capitalist society you are allowed to be paid, compensated and rewarded for any value that you create.
“I have to disclose the fact that I am being compensated to the person I am referring.” You don’t. It’s none of his business, any more than your private budget is or Profit and Loss Statement is. When someone is thirsty and you direct them to the water vendor, they don’t care what your relationship with him is. They will be offered a product or service by that vendor and they will decide whether or not to accept it. If they do, you are entitled to be paid by the vendor. He should not hike his prices to accommodate your referral fee / commission, but even if he does, that is between him and his new prospect / customer. People do business by choice. Nobody is being forced or coerced.
“But I have always given people referrals and I never get paid.” That’s fine. Would you like to get paid? You don’t have to, of course. It’s like paying for a $25 meal with a $100 note and being too embarrassed and confused to take your change, or working for your boss for a whole month and then suggesting he keeps your salary to buy his wife a nice gift. Good for socialists and leeches, but not for real entrepreneurs.
“But I have been told I have to focus on my core business and I don’t want to be distracted by doing other business (JV’s)” Joint Venture should be conducted with minimal time, cost and risk. They don’t distract but they do create value and improve relationships, which will automatically decrease your customer attrition rate and increase referrals, goodwill, average transaction amount, and more. In addition, they will create multiple streams of passive income for you at a 100% profit margin, straight to your bottom line. If you learn from dinosaurs you will probably share their lifestyle. Don’t take advice from turkeys an expect to soar with eagles.
I know it’s hard to break free of restrictive, outdated conditioning, so we have created an ongoing support system that will help you shift your mindset and understanding to a place where you work smart and not harder. Consider joining the DollarMakers Joint Venture Forum. Don’t get shook up – hook up – with winners.
Joint Venture Jitters by Robin J Elliott - To learn more about this author, visit Robin Elliott's Website.
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David Barr
David Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business.
David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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