1. Joint Business Plan Madhurjya K. Dutta 1mk_dutta Sept 2010

2. Joint business and partnering What is joint business two or more businesses pool their resources and expertise to achieve a particular goal. The risks and rewards of the enterprise are also shared. Joint business also about business expansion, development of new products or moving into new markets, particularly overseas. What joint business could give you: more resources greater capacity increased technical expertise access to established markets and distribution channels 2mk_dutta Sept 2010

3. Types of joint business Depends on what you are trying to achieve. co-operate with another business in a limited and specific way separate joint venture business, possibly a new company, to handle a particular contract. 3mk_dutta Sept 2010

4. Joint business - benefits and risks Businesses of any size can use joint business to strengthen long-term relationships or to collaborate on short-term projects. A successful joint business can offer: access to new markets and distribution networks increased capacity sharing of risks and costs with a partner access to greater resources, including specialised staff, technology and finance A joint business can also be very flexible. 4mk_dutta Sept 2010

5. Problems are likely to arise if: the objectives of the business are not totally clear and communicated to everyone involved the partners have different objectives for the joint venture there is an imbalance in levels of expertise, investment or assets brought into the venture by the different partners different cultures and management styles result in poor integration and co-operation the partners don't provide sufficient leadership and support in the early stages 5mk_dutta Sept 2010

6. Plan your joint venture relationship Before starting a joint venture, the parties involved need to understand what they each want from the relationship Any deal should: recognize what you each contribute ensure that you both understand what the agreement is expected to achieve set realistic expectations and allow success to be measured 6mk_dutta Sept 2010

7. Assess a new potential partner, you need to carry out some basic checks: Are they financially secure? Do they have any credit problems? Do they already have joint business partnerships with other businesses? What kind of management team do they have in place? How are they performing in terms of production, marketing and workforce? What do their customers and suppliers say about their trustworthiness and reputation? 7mk_dutta Sept 2010 Choosing the right joint venture partner

8. Create a joint venture agreement Set out the terms and conditions in a written agreement. This will help prevent any misunderstandings once the joint venture is up and running. A written agreement should cover: the structure of the joint business, eg whether it will be a separate business in its own right the objectives of the joint venture the financial contributions you will each make whether you will transfer any assets or employees to the joint venture ownership of intellectual property created by the joint venture management and control, eg respective responsibilities and processes to be followed how liabilities, profits and losses are shared how any disputes between the partners will be resolved an exit strategy 8mk_dutta Sept 2010

9. Make your joint business relationship work Communication Sharing information openly, particularly on financial matters Establishing clear performance indicators Flexible relationship. 9mk_dutta Sept 2010

10. Sample Format 10mk_dutta Sept 2010

11. Outline for a Joint Business Plan 1. Executive Summary Include a summary of the discussions to capture the investor’s attention, the summary should be no longer than 1-2 pages. 2. General overview Outline the nature of the business, the location, the finance requirements, the time frame required to establish the venture, and the duration of the venture if it has a limited life (e.g. a supply contract) 3. Core business Outline the core business of the joint business partner(s) and explain how the proposed enterprise is compatible with their current operations. If the business is in a new industry, the plan must outline the reasons for the diversification 11mk_dutta Sept 2010

12. 3. Business overview It should contain details about you and your joint business partner and include a biography of experiences and expertise. In what industry does the business intend to operate? Who are the competitors? Have any other businesses recently entered or exited the industry? How will the business be profitable, and what are the growth opportunities? 12mk_dutta Sept 2010

13. 4. Product or Service Line Describe specifically what your joint business will do. What product or service will be provided? Are there any unique features or benefits of your product or service? Describe the benefits. That is, what will the product do for the customer? 13mk_dutta Sept 2010

14. 5.Management Who will manage the overall operations of the Joint Business? What will be the specific duties? What other employees will be required and for what purpose? 6. The Market To be specific about your marketing strategies and goals, as well as how you and your Joint business partner will work together to tap into potential customers. What types of people will buy your product or service? List examples of current clients you sell to (or if you are just starting up – people you have spoken to who have expressed interest in buying from you) What territory will you cover, or sell to? How will you inform customers about your service or product? How will you promote your business? Who are your competitors?Who are your suppliers? 14mk_dutta Sept 2010

15. 7. Operational Plan How and where are your products or services produced? Explain your methods of: Production techniques and costs Quality control Customer service Inventory control Product development 15mk_dutta Sept 2010

16. 8. Marketing Objectives Describe your product introduction, improvement, or innovation Describe your distribution plans. Describe your pricing objectives. Describe your advertising and promotion efforts. Specific about your marketing strategies and goals, as well as how you and your joint business partner will work together to tap into potential customers. Any additional information 16mk_dutta Sept 2010

17. 9. Financing and Revenue How much money do you have, and what is the actual amount of money you need to start your joint business (start-up budget)? How much money is needed to keep the business open (operating budget)? Prepare a realistic budget. Funds needed short-term How the joint business will use the funds, and what this will accomplish for growth. Estimated return on investment 17mk_dutta Sept 2010

18. 10. Exit Strategy How do you plan to get yourself (and your money) out of the business? How will investors get their money back? 11. Risks and Assumptions What will you do if your market develops either more slowly or more quickly than anticipated? How will you react to competitor challenges such as under pricing or new products that make yours obsolete? How will you react to favorable or unfavorable changes in the industry? How will you react if there is a labor shortage or other labor-related issue? How will you react if there is an erratic supply of products or raw materials? Any additional information 18mk_dutta Sept 2010