Joint Ventures are probably the best things that ever happened to business. When you dabble in joint ventures, you merge your skills and business competencies with some other business person, making way for a more profitable (combined) venture. Since a lot of businessmen see the advantages of having joint ventures, they make joint ventures left and right. A big mistake, says business consultant David Guest from Melbourne.
A good business mentors will tell you to slow down and wait a while before making another joint venture. Though it seems to be a good shortcut to success, a joint venture gone wrong can wreck havoc on your business. Instead of doing your business any good, you could just end up with a bad business deal.
Below are some of the pitfalls and dangers of selecting the wrong joint venture partner.
- Boundaries may be crossed. If you about to enter into a joint venture, make sure you have a good take on your new partners personality. There’s nothing worse than discovering too late that they fall apart under stress or are just plain irritating. A clash of personalities will often lead to confusion, communication breakdowns, processes falling apart and general chaos. Beware, says business consultant David Guest a mismatch here can lead to one or the other party in a joint venture taking everyone by surprise by taking over the whole process, leaving you behind. Speak up if people are offending you or doing things that you don’t agree with. This is business, it’s not personal!
- You may not have the same business values. One of the main problems with joint ventures, that business coach’s report, is when it becomes obvious that the partners don’t see eye-to-eye on service delivery standards or quality. The main things of difference based on your business values. For all you know, you may be after service and profits while he looks at your venture as a profit-making machine only, quality forgotten. If this is the case, reevaluate, pronto. There may be a way to proceed that you can both agree on as being special to this JV that doesn’t usually happen in your business.
- You may be doing more than your fair share of the work. There are some partners who without realizing it will let you carry more than your fair share of the to-dos. Steer clear of these opportunistic people whenever possible or if it’s too late confront the situation. The reason you are on a joint venture in the first place is to lighten your burden and share the risk of a mutually beneficial deal. Make sure that you have a list of things to do upfront and split it between you and your partner as equally as possible.
- You got stuck with a sponger. There are some people who use joint ventures to get free business mentoring, advice on how to run and operate their business and at the same time, cash in on what ever comes out of the joint venture. These types of people can be very draining because it feels like they take, take, take! Most of the time they give up before you reach success and in the end, you’re the one who’s done all the work. As soon as you recognize you’re in a JV with someone like this do your best to renegotiate the terms of your agreement so that you the amount of work put in (actual tasks done) determines the amount of reward from the arrangement that is paid out. Hopefully, this will not happen to you and if it does you’ll be quick enough with a solution that protects you from the downside.
It’s common knowledge that joint ventures can work to your advantage and many business coaches and mentors will encourage you to investigate them. Even so, there is a need for one to be extra careful going into a joint venture no matter how lucrative deal sounds. That’s because every businessman has a vested interest in his own business outcome, so you want to be on the look out for anyone who has the same desires and ambitions as you all the time. While they may not be a suitable Joint Venture partner today, there’s always the future to be thinking of.
Evaluate each proposition first, or better yet, get help from a business consultant, like David Guest in Melbourne before engaging in doubtful joint business deals.