Lots of marketers throw around the term "joint venture" when what they often mean is "you'll promote my stuff and I'll promote yours." While that's a good way to get more sales if you can partner with someone who has a good list of people who will be interested in your products and services, there are other ways to joint venture that will be much more profitable for you.
Let's take a look at some of the different levels of joint venturing and partnerships that you can have within your business.
Promotion with another marketer
First off, there is the simple idea of doing a promotion with another marketer. You've probably seen these, where you get a bunch of e-mails on the same day from different people that all say the same thing or are about the same product launch?
The key to make your promotion stand out from the crowd is to only agree to do these if your subscribers get something special that no one else is getting. It might be an extra bonus, a free consultation, whatever. But that's the thing that's going to show your list that you're the person to buy from, because they're getting a deal they couldn't get anywhere else.
Joint venture for services
The second level of joint venturing is doing a joint venture for services. Think of all the money producing tasks that you don’t have time to do or you don’t have the affinity for.
Each of these and more can become a joint venture of sorts with trusted individuals who will help you make more than you could make on your own. In fact, that’s one of the criteria for a good joint venture for a service is a task that can be paid out of additional profits and measured that way. I like that.
For example, I know one friend who joint ventured with a telemarketer to run a phone room. He pays them a large percentage per sale for the events and high-end products they sells and that’s it. This venture brings in millions and millions of dollars of additional revenue but he doesn’t have the headache of babysitting and training a bunch of telemarketers.
Product launching partnership
Another good example from my own business is something I called a “product launch partnership”. I got someone to do those things related to my product launch that I didn’t want to do or didn’t have time for (since I was off running with the Bulls in Spain that Summer!). Tasks included such duties like blog posting, setting up affiliates, editing video for your launch site, dealing with technical aspects and so on.
When paying your joint venture partner – you want to be generous because you probably couldn't have done what you wanted to (or at least not as quickly) without that person's help.
Dividing partnership profits
The final level of joint ventures is when you actually have a partnership or joint business with another marketer.
The ideal partnership relationship is based on both people in the relationship working from their strengths. If you are thinking about a partnership out of fear, to cover some weakness in your own business expertise, that might not be the best way to go, but if you find a partner who compliments your skill set nicely, you'll be in the best shape.
Business partnerships like this can take many different forms and use a wide range of profit splits. Even if you go with a 50/50 split, it's unlikely the work will be completely split 50/50 all the time.
It's important to be very open with your potential partner as you consider a formal relationship and once you're in the relationship as well. It happens a lot when partners don't communicate that one will get resentful that he or she is doing all the work and thus will stop working to "show" the other person, which leaves your partnership and your profits in shambles.
This is just one reason it's important to get your agreement in writing. Now I am not an attorney nor do I play one on TV – but what’s worked for me is putting the basics down on paper (or in an email). You don't have to pay a lawyer big bucks to write out a 30-page contract outlining every last aspect of your partnership.
If nothing else, e-mail your partner about how the work and the profits will be divided and get his or her agreement. Then at least if there is ever a dispute or some confusion about what was agreed to, you'll have some kind of document to go back to.
Once you strike a deal and it’s a fair deal you need to be emotionally prepared to write out big checks to your partners (if you’re the one handling the money). I’ve written out monthly royalty checks that most people with real jobs would be jumping for joy to receive in salary for the entire year. You have to remember that this money wouldn’t have been possible without your partner and keep reminding yourself a deal is a deal. (Obviously if the deal is really lopsided you should renegotiate.)
Be careful about letting resentment creep in just because you are paying your partner large amounts of money. You might be tempted to rationalize and skim off a tiny percentage here or there. It’s possible to rationalize almost any behavior but my best advice is don’t do it no matter how tempting it is to cut a corner.
Finally, your reputation is going to be directly and indirectly associated with your partner. Just like the old Chinese proverb – “Man who lies with dogs, wakes up with fleas.” I’ve been very careful of who I endorse, associate with, partner with, etc. because it takes only a minute to lose your hard-won reputation.
I’d rather have a percentage of something than 100% of nothing. That’s one of my driving philosophies is I can create a bunch of different joint venture projects (some will be big hits and others won’t) but I’ll have multiple income streams and multiple partners all working together with me.