Why You May Want to Consider Joint Venture Opportunities

Your business may be doing well, but at some point, you may want to expand your horizons and you may want to do that through what is known as a joint venture. Joint ventures can be a great chance to expand your business, make money, and make your business more known in the public eye.

What Is a Joint Venture?

A joint venture is a task, goal, mission, collaboration, or business idea, carried out by more than one person or business. When two or more companies decide to embark on a joint venture, they both remain their own, separate companies—they’re just working together for the purposes of a common goal.

Unlike a partnership, which is an ongoing business, and its own separate legal entity, a joint venture usually has one goal or mission, and when that goal is reached, the joint venture ends. The joint venture is just that–a venture–not its own separate company or legal entity, although companies in a joint venture can opt to form a new company for the purposes of executing the goals of the venture. .

Imagine two companies working together to develop a cancer drug. Accomplishing that goal may take years—but once it’s accomplished, the joint venture is over and the companies go their separate ways.

Expansion and Using Your Assets

Joint ventures can allow your business to broaden its reach, and enter into areas or markets that it normally would have never reached. That’s because you are partnering in the joint venture with another company; each of you brings your own expertise, knowledge, customer base, or name recognition to the table, and each business in turn benefits from that reach.

While you’re doing that, each venturer can do what they do best. Maybe your business is better at science or marketing or research than your fellow venturer, and maybe they have resources and name recognition and more experienced management. Whatever each of your strengths may be, they are now combined.

Whereas your business might never ordinarily want to, or have the resources or know-how to expand into other areas, with a joint venture, you get the benefit of that expansion, by using the resources of your fellow joint venturer.

Expenses can also be divided amongst the venturers, lowering the financial risk that would otherwise exist if you went into new or unexplored business areas on your own.

Using Intellectual Property

That expansion can also help you capitalize on your fellow joint venturer’s intellectual property—meaning their name, or recognition in the public eye. This can give your business and the joint venture, instant recognition and trustworthiness to the public.

Do Your Due Diligence

Because joint ventures can last a long time, and because of the level of trust that must exist between joint venturers, it is always a good idea to thoroughly vet any joint venture partner.

Examining their finances, management, public reputation and business history are all good ideas; imagine a joint venture as a marriage albeit not a permanent one. You’ll want to make sure you’re embarking on your venture with the right partner.

Thinking of a joint venture? Let us help. Call our Fort Lauderdale business and commercial litigation attorneys at Sweeney Law P.A. at 954-440-3993 for legal help.

Sources:

investopedia.com/ask/answers/033115/what-are-primary-advantages-forming-joint-venture.asp

forbes.com/councils/forbesbusinesscouncil/2024/12/02/harnessing-the-power-of-joint-ventures-a-guide-to-success/