When entering a joint venture, especially in the construction industry, there are several things you MUST take into consideration before signing on any dotted line. After all, while the agreement can be mutually beneficial, building anything as part of a joint venture can be fraught with risks that may leave you both out of pocket and with nothing to show for it.
A successful joint venture will have a well-planned strategy, strong partnership, and equal, or at least clearly defined, contribution and a process to integrate the work quickly so one side doesn’t, or can’t, lag behind. It’s important to respect the other party’s work culture, while also ensuring both parties are held accountable throughout each step of the process.
Pro: Learn from your peers
One of the great things about working with another business is to learn about their company’s work culture. Regardless of how they operate, you’ll definitely learn a lesson or two and be able to adopt these into your own operation.
Pro: Access to a new audience
Every business has their own unique audience, so by teaming up with another company, you gain the opportunity of exposure to a whole new market. To capitalise on this, ensure you have a team dedicated to creating positive stories and interest around your brand during this time.
Pro/Con?: Shared risks
In a joint venture, your financial responsibility and work load are shared – automatically decreasing the burden of both on your team… but this only works when your weaknesses are their strengths and visa versa. If there is an unequal distribution of contribution and skills, one team will end up taking on more work, which can lead to a breakdown of the partnership.
Con: You’re just too different!
While on paper your two companies may look like the ultimate dream team, when push comes to shove, it becomes apparent that you’re unable to negotiate and that the two different management styles and work cultures are completely incompatible.
Con: Communication failure
The key to a great joint venture is communication, to ensure both parties are constantly on the same page. The moment one party fails to keep the other in the loop, cracks will begin to appear. Let your pride get in the way of clear, honest communication, as the other party may hold the key to resolving your issue… and isn’t that half the point of creating a joint venture in the first place?
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