Category: Joint Business Relationship
Summary & Overview
A Joint Venture (often abbreviated JV) is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. The venture can be for one specific project only, or a continuing business relationship such as the Fuji Xerox Joint Venture. This is in contrast to a strategic alliance, which involves no equity stake by the participants, and is a much less rigid arrangement.
(Note: “Joint Ventures” are common in the world of Internet marketing but usually do not involve the establishment of a new business entity as described above. The “Strategic Alliance” definition below is a better description of our industry’s view of a “Joint Venture”.)
A Strategic Alliance is a formal relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations.
Partners may provide the strategic alliance with resources such as products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property. The alliance is a cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts. The alliance often involves technology transfer (access to knowledge and expertise), economic specialization, shared expenses and shared risk.
Setup Time
Less than 1 Hour.
Ongoing Maintenance
None.
Cost
Most are free although you will be sharing a percentage of the revenue generated by the Joint Venture arrangement.
Speed of Results
Depends on the Joint Venture arrangement.
Basic Use
Joint Ventures are common in the world of Internet Marketing. Simply stated, a “Joint Venture” is an arrangement between you, the marketer, and another business owner who has created a significant customer base/customer list. In exchange for your Joint Venture partner promoting your business, product or service to their customers, you agree to share your profits with them.
Done correctly, this is a win/win/win scenario.
- YOU WIN as these sales will cost you nothing to acquire. While you are sharing the back-end revenue from each sale with your Joint Venture partner, this is about as close to “free money” as it gets. Plus, you have now acquired a new customer with the possibility of future sales, an ongoing revenue stream, or even future passive income.
- Your JOINT VENTURE PARTNER WINS as they are providing something of value to their customer list and earning a portion of each of the resulting sales simply for sending out an email or two.
- The CUSTOMER WINS because you are providing a product or service of value to them.
Basic Action Steps
The most common Joint Venture relationship is with an established Internet Marketer who has created a significant customer list. It’s important for you to understand that every time you give a website your name and email address, you have joined their email subscription list. If you haven’t subscribed to any email lists yet, you should consider subscribing to a few just to see how the relationship is built between marketer and customer or prospective customer. You might consider setting up a separate email address just for list subscriptions so you can quickly scan and review incoming emails for content and style without constant interruptions. Set aside time to open this email account and research effective list communication but don’t get distracted.
To begin researching potential Joint Venture partners:
- Look for email list owners in a niche that interests you. Keep in mind, you are not necessarily limited to the “make money from home” demographic. Google both short keywords (ex: red dogs) and long-tailed keywords (ex: red dogs with long ears and short tails) and look at your search results for websites that might be a good fit for you.
- Look at the website and determine if it (a) resonates with you and (b) is building an email list by asking for a name and email address. Then ask yourself this one important question: “will people who subscribe to this list be interested in the product/service I’m offering?”.
If the answer is no, move on.
If the answer is yes, subscribe to the list and then locate the website owner’s name and contact information, which is usually easy to locate on the website. If not, you can search for the website’s registration information on www.whois.sc.
- Contact the website owner, preferably by telephone. Confidently introduce yourself and tell them you’re interested in a possible “JV” with them. Tell them quickly what you are promoting and give them a website to review if applicable. Also tell them the profit split you are offering. As you would expect, this is a highly negotiable number. If you’re dealing with a smaller website/list you will generally be able to agree to a 30% cut for your JV partner. Larger and more established websites may require 50% (or higher) for promoting your product/service to their list. While you want to be respectful of your prospective JV partner’s time, it’s also important to remember that people want to business with people they like. Give them a feel for who you are as a person and keep your focus on how this will benefit them and their list.
- Once you have agreed in principal to the terms of your Joint Venture, put it in writing! With every Joint Venture arrangement you are building a network of future business partners. You want to ensure all parties are clear on the terms of your agreement in order to avoid any miscommunication or misunderstanding.
- Prepare the email to be sent to the list. Most times your Joint Venture partner will write this email themselves, with some input from you, as they have built a relationship with their subscribers over time. The fact that they are recommending your product or service will be much better received by their list than if they receive an email from someone they’ve never heard from before.
- Pay your JV partner as soon as you are paid!
Basic Tips & Tricks
While Joint Ventures in the world of internet marketing are generally limited to email and website promotions, Joint Ventures actually happen every day in the world around us.
Any time you see one business promoting the products or services of another business, that’s a Joint Venture in action. You don’t have to limit yourself to other internet marketers as possible Joint Venture partners. Consider the possibilities and get creative!
Almost any business owner will entertain a Joint Venture if the financial incentive is there for them and they believe their customers will benefit from what you are offering:
• Provide a stack of “Product” DVDs or flyers to a local realtor …
• Ask a pizza delivery restaurant if they’d be willing to put a sticker advertising your product/service on their pizza boxes …
• Hire a college student to blanket a neighborhood with door hangers or fliers in exchange for a percentage of each sale.
The key is to begin to think like a marketer and see strategic marketing relationships that are outside of the box!
Disclaimer: Michael Wyrosdick is committed to providing you with the highest quality tools and resources to support your business. You should, however, conduct your own due diligence before purchasing any products or outsourcing any projects as Michael Wyrosdick cannot guarantee the services or products as provided by third party vendors.
Related Marketing Strategies
• Email Invitations
• Warm Market
Questions, Comments, Feedback & Suggestions
For questions about Joint Ventures, please send an email to resources@michaelwyrosdick.com with “Joint Ventures” in your subject line.
