Joint ventures are a common way for individuals to invest in business or real estate. In the simplest form, one will provide the labour and work the opportunity while the other one provides cash and remains silent. Here are 7 steps to follow to ensure success:

1. Solidify the Relationship
Review your independent goals. What would success look like in five years time? Are your goals compatible? Is the joint venture partner willing and able to leave their money in the project for 5 years? Are they expecting a yearly return?

2. Review track record
Review your track record in business or investing if you are the one putting in the effort. Do you have systems in place? Can you manage people? What marketing skills do you have? Do you have a business plan?

3. Show Opportunity
Show them the details of the business or the investment and indicate why you believe this is a good deal for both parties.

4. Due diligence checklists
Show completed analysis of all your due diligence. Have you completed a SWOT analysis (strengths, weaknesses, opportunities, threats)? What do the numbers say?

5. Joint venture arrangement
Walk through the joint venture worksheet. This is the simplified overview of the full JV agreement and it outlines each party’s responsibilities and how potential situations will be handled when they arise. If there is consensus proceed to the full JV contract.

6. Independent advice
Have the joint venture partner review all documentation and agreements with their accountant and lawyer for approval.

7. Keep informed of progress
If the joint venture partner is silent keep informed of progress with regular updates.

Joint venture arrangements are a common way for people to make an entry into a business or investment. By following these 7 steps, there will be more chance of success.