Joint Venture Negotiation Tips
Joint Venture Negotiation Tips
When you want to negotiate the terms of a successful, win/win Joint Venture, there are a few basic guidelines that I have learned through the years that will help you to optimize the opportunity and maximize the chances of a successful Joint Venture that can lead to many more. More importantly, with the right approach you can build and maintain a good, solid relationship, whether the JV is successful or not!
First, do a lot of homework on the type of business you’re dealing with, its unique problems, profit margins, challenges, back end and resources. You can use the Internet, speak to the competition, read industry publications and talk with company employees, vendors and customers. Also, speak to fellow Joint Venture Forum Members at your locals meetings, on the Internet and on your Members Only Conference calls. Six degrees of Separation means everybody knows people and you’re looking for contacts that can fast-track your information collection and due diligence.
Next, do serious research on the person you’re dealing with. Naturally, you should be negotiating with the decision maker. What is his or her “Hot Button”? What do they really, really want? What keeps them awake at night? What are their values, hopes, dreams, fears and aspirations? WHY do they want what they say they want? How much and what will it take to really get their undivided attention? You need to craft and personalize the JV to take full advantage of this knowledge to offer the ultimate benefit, a deal which is too good to be refused.
Is this person knowledgeable about the mindset required for a successful JV? Give him JV information to prepare his mind. Suggest he joins the DollarMakers JV Forum / attend a DollarMakers JV Broker Bootcamp. Members have also realized the efficacy of giving then a copy of my book, Joint Adventures, to read in preparation to the negotiation.
Also, make sure you reduce the cost and risk on both sides to the absolute minimum, as well as the time required to make it work. Do this by leveraging existing resources instead of creating / buying / building new ones. That way, if things don’t work out as expected, nobody loses and the relationship remains strong, without resentment or regret.
Get the opinion of at least two respected mentors / Mastermind Partners / Fellow JV Forum Members before presenting your case to your potential JV partner.
Finally, put everything in writing. This clarifies issues and responsibilities, duties, payments, time of payment, conditions and expectations. You could also mention the fact that things might not work out as expected, and what will occur under those circumstances. Clear communication is essential.
Always be positive, relaxed and unattached, and be prepared to walk away from any JV if you’re not comfortable or if the return on investment is not deemed worth the time and effort it requires, always bearing in mind the big picture. This attitude will strengthen your position.
Have a question for Robin? Ask or leave a comment below!