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Do you always go for a 50/50 share on expenses and sales when engaging into a JV partnership?

by contentwriting360 Banned
3 replies
I'd like to start some offline businesses (ones which target the local market) through JV partnerships. Do you offer 50/50 share or there are factors that you need to consider to determine your percentage and that of your partner? If there are factors that you need to consider first, can you give me an idea on what those factors are?

This will be my first. Please advise. Thank you.
#50 or 50 #engaging #expenses #partnership #sales #share
  • Profile picture of the author AlexR
    JV's are negotiated and all are potentially different. It depends on what each party is contributing. For example, do you need funds or someone with skills that you don't have?

    A JV is something that you should also seek legal advice for because there has to be a bail-out clause for both parties and a determination of the rights of both parties.

    Just to clarify...do you really mean Joint Venture or Partnership. There is a difference between the two.

    This link may provide more info for you. Joint venturers v. Partners: Do they owe the same duties to one another? | ClearLaw Legal Bulletin | Australia.

    EDIT The link is to Australian court rulings, but may be similar in most countries.

    Alex
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  • Profile picture of the author Andy Fletcher
    Going into a venture like this 50/50 simply because there are two people involved is like saying there's a 50% chance of surviving leaping off the Empire State Building because you either live (50%) or die (50%).

    Your first step is to produce a basic business plan. Not some 100 page document an MBA might dream up but a few pages outlining the business. What work needs to be done? What expenses are there? How will you get customers? What will you charge? etc.

    With this in place you have a rough outline of what's going to be involved and what you expect to get out of it. Base on this you can divide up what's needed in terms of time, money and skill and also the upside.

    Until you have this in place all you have is a wing and a prayer and the end result is likely to be resentment in one party or another when it becomes apparent that one person is putting in far more than the other. Or worse, both parties build resentment when one is putting in far more hours and the other is producing far better results in less time.
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  • Profile picture of the author contentwriting360
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    Alex and Andy,

    Thank you for those good and valid points. I already have a basic business plan in place. As a first-timer in this venture, I believe I just wanted to hear your thoughts. So, thank you. )
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