Business isn’t all about money but rather a momentous milestone when a person engages in the field of e-commerce to make a living. As rewarding as it may sound that you are now making your own money, engaging in business offers you the spontaneity of the market, as well as hone your problem-solving skills in making the best out of your products or services at hand.
In fact, managing a money-making career isn’t always easy first. Small business owners tend to work 50x harder than having a normal corporate job. But seizing and manifesting on your dreams and goals and actually making a go for it is what makes every small business dream turn into reality.
But be wary of making that big step. Some people might have the greatest idea but failed to plan ahead of time, while some have the skills and talent, or even a hobby that can sell bucks in the market but doesn’t know how a business flow and works. Subtle things like that make the greatest impact on a business. The market is vicious yet your sales might not be the way you expect to be, so, before venturing out with that desire of building your brand and own business, it’s best to do some research and treat it like a battle you need to prepare for.
When you own a business, there are a lot of things to consider—thinking about the financial risks and undesirable work you have to deal with are one of the few things that just make a business owner quit his career. But there is one way that you can do for this dilemma, and that is through a joint venture.
A joint venture definition is when companies form an alliance with one another in a specific undertaking. This means that companies would get to combine resources, talent, and skills to take advantage of work capacity and efficiency.
Unlike partnerships, joint ventures are only intended for a single project or specific undertaking. Sincesince some business owners believe that the more people involved in a situation, the better the solutions and productivity.
Any business can enter into a joint venture. If you see that you’re lacking resources but managed to find another entity that would fit your indifferences, then it’s a probable solution. Indeed, a joint venture is a great way to harness the best out of two companies working together. This entails a much more efficient working space for both of the companies’ working bodies since it will keep everyone overworked since all tasks are distributed evenly—making way more room for focus and improvement.
Types of Joint Ventures
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Even though a joint venture definition pretty much sums it all up, there are still some aspects to fully learn about the art of joint ventures—its types or kinds. Whereas, a joint venture can be classified into three most common types:
1. Limited Co-operation
This type of joint venture is when the companies involved agree with business terms in a limited and specific way. This is a type of joint venture that is very common on small business owners looking for new and larger opportunities with the help of larger industries that are trusted by the market. With this, a contract with specific terms and conditions about the profit made can be discussed to know how both of them can work given the new situation of selling and merchandising.
2. Separate Venture
From the word itself, a separate venture is often made when you opt to build a new company to handle a particular undertaking. This can be a flexible option since respective shares are owned by each of the partners, as well as the opportunity to agree on how it should be managed.
3. Business Partnerships
In a joint venture definition, a business partnership joint venture can also be called a limited liability partnership (LLP). LLP is also considered a separate entity. Each partner in this joint venture is responsible for all the business earnings and losses, as well as paying their taxes on their share of profits.
Pros and Cons of Joint Ventures
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Aside from the share in profit, joint ventures also come along with their share of both advantages and disadvantages. To fully know what is a joint venture, you need to know about the advantages and disadvantages it brings to the table.
· Advantages
1. Additional Resources
A joint venture definition is classified as two or more companies forming an alliance all together to share resources and utilize them to accomplish an agreed undertaking. Given the pool of resources that both companies were lacking, they can make use of these contributions to make their goal and aspirations happen.
For example, if Company A has the greatest innovation that would change the way people consume electronics, while on the other hand, Company B is a trusted manufacturer that can make Company A’s innovation into reality, then that is a perfect time to uphold and talk about a JV, hence, simplifying a joint venture definition.
2. Flexibility
A joint venture definition is not just about collaboration, but it is also about the flexibility if offers to both parties. A JV can often be a great way to maximize the workforce and encourage the team to focus on their specialties when working in the field. Thus, with a handful of workloads being distributed evenly in both companies, this offers a flexible and efficient working environment.
3. Build Relationships
Network and relationships are also a part of the joint venture definition. Having the chance to build relationships is a great way to accept the possibilities and opportunities both of you can offer in the market. With this, you pick up new insights and marketing strategies that can help you with your business in the long run.
Other than that, building relationships outside the country is also a great way to build your brand and spread awareness. Hosting and partnering with another company from another country can help you largen your audience span, thus, generating more sales for your business once you enter the foreign market.
4. Split Costs and Profit
The thing that makes a joint venture look appealing is that every win and loss is split in half. You would not go into total bankruptcy if all things failed in your business venture. According to the joint venture definition, every cost and profit made by both companies would be split in half, unless you made changes in the policy and signed a contract about a different agreement.
Other than that, you both can decide to pay each other a base salary, whereas the remaining profits equally. In your own kind of joint venture definition, you can opt to ask for a percentage basis when it comes to breaking down the salary in terms of workload, time, or even resources used in the process.
· Disadvantages
1. Culture Differences
Companies have different sets and kinds of marketing execution, sales insights, customer service, etc. Building a company cultivates its own unique cultural beliefs and traditions accumulated as time and problems passed them by. When met with a totally different company with varying problem-solving actions, cultures from both parties often result in a clash. Thus, this is why other joint ventures tend to not come out successful due to the difference in approaches when managing and solving a problem in the project you both agreed to work on—undermining the joint venture definition.
2. Unreliable Partners
When in a business venture, not all things go according to your plan. One way or the other, your co-venturer might not even give their 100% in the project, so having an unreliable and disorganized co-venturer might knock your shot down in attaining and achieving your company’s vision for the project.
Aside from that, if you find that your newfound joint venture is not plausible anymore, it’s hard to exit from the business frame since a joint venture definition means that companies signed a contract that often specifies how long their joint venture would last. A contract like that is hard to leave, but under specific terms and conditions and kind of contract, you can leave the joint venture by talking and explaining your side to the other party.
3. Different Expectations
No matter how clear things are stated in a discussion between two parties, no company has the same set of expectations. A business may opt to agree, but some business owners always have a hidden agenda in the mix. We want to get the best out of any situation for the sake of our business, and most especially, our effort and hard-earned money. With this, it’s advisable for your joint venture definition to be transparent with your goals and ambitions of your company as well as the agreed joint venture.
Site Samples of Joint Venture Websites
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The best way to jumpstart and raise awareness of your joint venture milestone is by building a website. The booming industry of e-commerce has given entrepreneurs a wide audience to utilize when it comes to promoting their brand.
If you’re looking for inspiration for a website, here are some examples of JV websites for your viewing:
1. Malms Digital AS
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2. Hulu
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3. Cebu Lifestyle Blog
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4. Live Lite
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More Than an Alliance
A joint venture can be complex, but it can always result in a successful one with proper planning and constant communication with one another. Being open with your partner does not only make things clear and concise, but both of you are introduced to open possibilities and perspectives to make your business joint venture definition a success.
Likewise, from the pool of resources both you and the other company have to offer, there is a big chance to unlock both of your potential in the market.
If you’re planning on telling the whole world about your new joint venture, you can make a website in Strikingly today and have your website up and running within minutes.
With Strikingly’s user-friendly features, you don’t need advanced tech skills to make a website. And don’t worry, Strikingly has tons of templates to choose from so you can pick the best template that suits you and your co-venturer. It’s that easy!
Head on to Strikingly and make a website for free today!
