How to Approach a Potential JV Partner
You’ve decided you want to do a joint venture and now need someone to join forces with. But just how do you choose a potential JV partner? And more importantly, how do you approach or contact them? Then what? For the first timer, these are all issues that could stop you dead in your tracks. But fear not, doing a joint venture is really not that hard especially if you follow these simple guidelines.
#1 Research them to make sure they’re a person you really want to work with. This can include: a Google, a credit check, a Better Business Bureau check and even a police check, as well as talking with their competition, suppliers, vendors, landlords, customers, neighbors and staff.
#2 Learn as much as you can about their business from the same sources, so that you are well prepared and knowledgeable about their business, demographic marketing target, profit margins, problems, aspirations, strengths, and weaknesses.
#3 Initial contact. The next step can be handled a number of ways. One way is to email your prospect and tell them you’re impressed with their business and you’ve sent a proposal to them. You can use FedEx to let them know you’re serious and tell them it’ll be delivered that way. Most people don’t just toss something from FedEx. Your proposal is basically a sales letter whereby you lay out your idea and take the time to present the benefits of this joint venture to your partner.
Your other option is to pick up the telephone or send an email. The trouble with email is that if this person doesn’t know you, they may simply delete your email. A phone call means you’ll at least know you’ve made a connection. While picking up the phone is a scary thought for many, this is a joint venture, you don’t really have anything to lose.
OK… So what do you say…?
Any good salesperson knows that the pitch has to be all about what benefits the person will receive by partnering with you. Start the conversation enthusiastically with a brief intro about who you are and then jump right into what you know, and are impressed with, about their business. A little bit of honest flattery and the fact that you’ve done your research will generally get you the attention you need for the next phase…your pitch. Here is some of the information you’ll need:
- What you bring to the table
- What your partner will bring to the table
- What the potential profits are and how you came to those numbers.
- What is fair for each person involved
- How and when each person will be paid
And that’s it. Offer to send the proposal to them in writing and then give your potential partner time to think it over. Set up a time to meet or communicate again and say goodbye. Walla. That’s it. You’re done. Chances are you may have a strong indication of their interest before you hang up. If you feel it is a “no”, you’ve become familiar with the process and next time it will be easier and you may have better luck. If the answer is a “yes” – then Congratulations!
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