The ideal business partner in a joint venture is one that has resources, skills and assets that complement your own. The joint venture has to work contractually, but there should also be a good fit between the cultures of the two organisations.
Finding a suitable joint venture partner
A good starting place is to assess the suitability of existing customers and suppliers with whom you already have a long-term relationship. You could also think about your competitors or other professional associates.
When assessing the suitability of partners, you generally need to consider the following:
- How well do they perform?
- What is their attitude to collaboration and do they share your level of commitment?
- Do you share the same business objectives?
- Can you trust them?
- Do their brand values complement yours?
- What kind of reputation do they have?
Consider carefully how you will plan your joint venture relationship with a potential partner.
Joint ventures due diligence checks
IWhen looking at new potential partners, you should carry out some basic due diligence checks. Start by examining their legal status and making sure that they have the right to enter the joint venture. You should also ask yourself:
- Are they financially secure?
- Do they have any credit problems?
- Do they own assets that they will be putting into the joint venture?
- Do they already have joint venture partnerships with other businesses?
- What kind of management team do they have in place?
- How are they performing in terms of production, marketing and workforce?
- What do their customers and suppliers say about their trustworthiness and reputation?
You can carry out a check on a company by using Companies House WebCHeck service.
Protecting your interests in a joint venture
Before you consider signing up for a joint venture, it's important to protect your own interests. You can draw up legal documents to protect your own trade secrets and intellectual property rights. You may want to check if your potential partner already has similar agreements in place, either with their employees or with consultants.