Question

Topic: Strategy

Is Join Venture Good?

Posted by emac_t on 9/19/2007 at 12:34 AM ET 125 Points
Hi Everyone,

I'm designer with 6 years experience in the Advertising Industry. 8 months back I quit my job and started my own design setup www-the-designroom.net

I actually started operation without a capital and operate from home. Till now I'm providing my services to printers, web developing companies and to a Small ad agency and represent under their company tag.

Since this is a one man show I find it difficult to handle both marketing and creative.

A company that I provide my service is willing to offer me a office space, administration and marketing and asked to join them and start an ad operation with them. Bringing business and running the business is totally upto me and they are willing to invest.

However, my intention is not to stick with them for long. Meanwhile I'm in desperate need of a Client Service/Marketing person whom I can't afford right now.

My question is: If I join them and decide to break that partnership will I be back in square one? What will happen to accounts that we build? Will I be able to continue without their support? Will I make competitors with them because they can replace me and have another designer in my place. What persontage is best in profit sharing when I handle most of the work?

Please advice.
Emmanuel.
To continue reading this question and the solution, sign up ... it's free!
SUBSCRIBE
Or, SIGN IN

RESPONSES

  • Posted by antonio.alexandre on 9/19/2007 at 6:48 AM Accepted
    There are several kinds of operation types.

    The joint venture type is one of the deepest ones and usually you only commit to it after you've had a past history of success with other types of co-operation.

    Seems to me that the company you are talking about simply wants to outsource a part of their operations. If you reach the conclusion that this is really the case, then, my advice is:
    - offer them a good agreement.
    - define thoroughly the time frame of the agreement (start, end, and ending procedures)
    - include a mutually advantageous non-disclosure agreement (for instance, you commit not to disclose details on their business to your other customers, and they commit no to "attack" your own clients, for a certain amount of time)
    -define a "finder's fee" with them: for instance, for every business they bring you they earn a percentage of the amount you charge.

    Don't jump into a JV.

    Treat them as an important customer and as an eventual partner, in the future. Build your own Brand. The first times are always the most difficult times for start-ups: you are experiencing the "pains of birth" (... then come the "pains of growing" :-)) that all entrepreneurs experience... and eventually survive to.

    Anyway, one golden rule for any kind of partnership is: it has to be a win-win situation, and all parties must feel comfortable with the agreement for it to succeed. I feel the agreement didn't even start and you already feel uncomfortable with it...

    By the way... I liked your website. Good luck.
  • Posted by Jay Hamilton-Roth on 9/19/2007 at 8:57 AM Accepted
    A couple of ideas:

    1) Since you know someone that wants to work with you, change the terms of the relationship. Make it clear you'll operate as an independent (using their facilities). Perhaps you'll barter their marketing help in exchange for your time (or will make more time available to them, or charge them less, or...).

    2) Team up with someone who's a marketing person that needs work and doesn't have creative. Have them work on commission so there's no up-front cost to having them. A good marketing/sales person should easily pay for them self.
  • Posted by emac_t on 9/20/2007 at 5:48 AM Author
    Thanks

    W.M.M.A.
    Antonio
    bswartzwelder
    Jay Hamilton-Roth
    aleobrate

    All your comments very valuable... Appreciate your time and knowledge shared.

    Emmanuel Timothy.
BACK TO TOP

Post a Comment

Related Discussions

Community Info

Top 25 Experts
(Strategy)