It’s effectively a commercial agreement between two or more participants, usually entered into in order to achieve specific business goals such as launching a new type of business or selling products into a new market.Įach company maintains their separate business structure and legal status opens in new window, with joint ventures sometimes creating a new, jointly-owned child entity that is effectively at arms reach from the parent companies. It’s full of tips on energy efficiency, dealing with late payments, and accessing finance guidance to support your business, whatever the future holds.Īt its most basic, a joint venture is when two or more businesses agree to work together. To help make things a little easier we’ve created the Start Up Loans Guide to Business Resilience. We know it’s a tough time to be running a business or starting a new one. It pays to understand what joint ventures are, as well as their advantages and disadvantages. However, they aren’t without their pitfalls and poorly conceived partnerships can harm both parties. Joint ventures can dramatically increase the reach and scale of both businesses while reducing the risk. Joint ventures are usually formed by two businesses with complementary strengths.įor example, a technology company may create a partnership opens in new window with a marketing company opens in new window to bring an innovative product to market.Īn overseas business could join forces with a local distribution company in order to sell its products in that local market opens in new window. Today’s business often collaborate with other companies on joint ventures – pooling their resources and expertise to develop new products, expand into different markets opens in new window or increase operational capabilities.Ī joint venture allows businesses to grow and gain access to markets or expertise beyond their existing capability.īy teaming up with another company, many small businesses use joint venture agreements to share specialised expertise, such as technical skills or intellectual property opens in new window, as well as spread the risks and costs of developing a new market or product.
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