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| Dec 17, 2005 6:05 pm |
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re: When Your Ship Comes In, It Might Be a "Partner" Ship |
Chris Rempel
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Great stuff Garland.
I've also experienced most of my success through joint-ventures, whether it's cross-promotion, endorsement, loyalty programs or trading services.
Joint Ventures are extremely powerful because unlike advertising, you're actually working with a certain degree of market-share and brand credibility - and your conversions via a JV will absolutely soar above traditional advertising.
Just as Garland outlined some cautions for regular partnerships, you must also be careful that your JV associations are going to complement your business - not jeapordize it!
Here are some considerations when drafting your JV contracts, and some pitfalls to be aware of:
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*** Part 1: JV Agreements ***
In most cases, a joint-marketing agreement will do for the more popular joint-venturing arrangements. Get a lawyer to draft this (or at least approve it).
Make sure your contract covers the following in clear, undisputable detail:
- Contract terms, rights and duration/termination (how long, probationary periods, qualifications for immediate termination, etc.)
- Liabilities (I would suggest having both parties disclaim liability in regards to anything that the other does or says.)
- Publicity (make it clear what can be made public about the relationship and how - if at all)
- Intellectual property and licenses, etc. (specify ownership, who retains what, etc.)
- Warranties, Indemnifications (these will vary, consult lawyer)
- Confidential or Sensitive Information (how it should be treated, consequences of mistreatment)
- Insurance/Misc Provisions (other stuff involving what to do in the event of a lawsuit, etc.)
- Payment Schedules, Details, Bonuses and Penalties
- Marketing or Cross-Marketing Schedules, Guidelines, Restrictions and Penalties
And if you want the other company to sign on willingly, make sure that the "ass covering" is equally distributed throughout the agreement.
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*** Part 2: Pitfalls To Be Aware Of ***
- No matter what kind of paper gets signed, be aware that doing business with anyone else always incurs a risk of loss, tarnished credibility or worse.
- If things get ugly, you may have to go to court, which isn't cheap
- A poorly implemented JV will burn a bridge and speak poorly of your reputation (regardless if it was YOUR doing or not)
- Regardless of liability disclaimers, you might run the risk of getting into trouble by "association"
- Be sure to account for potential chargebacks, refunds and other variables when putting together a payment schedule
- Be wary of partnering with anyone that doesn't really seem to approach the idea with a certain amount of "caution" - because any legit business will play their cards carefully.
- Look into trade laws, including tarrifs, regulations and restrictions if doing business outside of the country of your residence.
- Get the advice of a Business CPA in regards to tax strategies etc. with your new "income stream" - if you're on the monetary receiving end.
And I could go on...
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Bottom Line: Run both your potential partner/idea AND your agreement by an experienced lawyer, business coach/consultant, CPA and close personal friend that will be objective and honest with you.
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Real Joint-Ventures can be like a marriage.
It has the potential to build your company into an exponentially stronger and confident operation...
Or it can destroy what you've built and literally steal your assets.
So choose your partner carefully.
All the best,
-ChrisPrivate Reply to Chris Rempel (new win) |
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