Joint Ventures, also referred to as JV’s are surprisingly overlooked by many business owners. A joint venture is simply where businesses or individual team up to utilize each other’s customers and resources.
For instance a mechanic could team up with 4 independent garages by providing them with cost effective repair and maintenance services. The mechanic could go one step further by asking the garages to refer them as their preferred mechanic. This would enable the mechanic to generate a large proportion of his work through the garage directly.
You need to identify a need for the partner that you are going to work with, in the mechanic scenario you could work on the car dealerships cars at a reduced rate, visit auction houses with the purchaser from the car dealership to reduce their risk in buying a car with evident major issues and refer your customers that want to sell their car to the car dealership.
As you can see, after a quick brainstorm there are multiple areas where both companies could help one another overcome challenges, reduce risk and produce new customers.
When it comes to referral settlements there are several options in how you could come to a structured agreement. It could be that the car dealership receives 15% commission for every customer they send your way; alternatively you could provide a free service for every 3 new customers they send your way. It’s always best to have a flexible approach when it comes to joint ventures and to always have a ‘team-outlook’.
Joint ventures do not just work for mechanics and car dealerships; they work for almost every type of business:
> Architects & Property Developers
> Property Developers & Estate Agents
> Estate Agents & Interior Designers
> Interior Designers & Web Designers
> Web Designers & IT Companies
As you can see, each profession tends to work with another. Joint ventures work best when they are built with businesses that encounter your potential customers most frequently.
Building a client base is an expensive yet essential aspect for every business. Joint ventures can be a great source of additional customers so it is worth considering your options before you go an invest thousands into new advertising campaigns.
The majority of businesses that are doing well in your area are likely to have joint ventures already set up. Don’t take this as a negative point, look at it positively because in order to succeed within your industry you should emulate some of the aspects other successful companies are doing, and in turn might find that your company begins to enjoy greater success.