Starting a Joint Venture - Is it Right For You?

As a small business owner, you have tackled many challenges and obstacles to make your business a success. Many business owners have found that a joint venture is a great way to continue expanding revenues and even help grow their own business. But a JV requires attention and commitment just like any other business venture.

How do you know if a JV is right for you? Sometimes a JV opportunity comes along just at the right time for a business owner who needs a new challenge. Sometimes a JV is just the right strategy for a small business to realize a boost in revenue. But in some cases a JV becomes an added burden that does not reward a business owner as he envisioned.

Here are some basic questions to ask yourself when you are considering a JV:

Is there a need for your combined products or services? - In many cases, a JV is formed almost by necessity. A market shows a specific need that is met by the combination of services or products. An example might be wedding photography and video. Two similar artists can combine their talents to offer a great package deal for brides and grooms wanting to document their special day.

Do you have enough money and/or resources? - Try to forecast how much money and resources you would need to make a JV a success. Would you need to borrow money? Will the combination of money and resources between you and your JV partner is enough to grow and sustain a successful venture?

Are you ready to assume some risk? - Any business venture requires an assumption of risk. Are you in a place where your own business is sustaining itself and you can take additional risks with a JV? Be realistic with your expectations on risk or risk aversion.

Are you confident in yourself and your idea? - Many times a great JV starts with a great idea. If you have a great idea that could help you and a potential JV partner make additional money, then your enthusiasm will carry it through. If you have doubts about a potential JV idea, it is likely those doubts could exacerbate into failure.

Have you done the research? - Do plenty of research on your JV idea. Educate yourself and learn more about what you don't know. You may be surprised to learn that there is plenty that you do not know. You will discover new things that could help your JV become a success, and even things that will ultimately let you know that an idea is not a good one. Research is crucial to the success of a new JV.

Ultimately your enthusiasm and determination for developing a JV idea will be the key factor in the success. But before diving into a JV, be sure you are ready to tackle and handle the challenges.