Forming joint ventures with your competition is a great way to increase your reach, build new income streams, and work with your competition. But like almost any choice you make for your business, there are advantages and disadvantages to forming joint ventures that you should be aware of before you get started. Note that any time you record a disadvantage doesn’t mean you should not do the thing; it just means you need to mitigate so that the disadvantage doesn’t take over.
The clear advantages to forming joint ventures are:
Expand your reach.
The easiest way to find more audience members to buy your products or to use your services is to align yourself with someone who has a big audience, too, and preferably a bigger audience than you do. When that audience notes that the person they trust to give good advice likes you, they’re going to be more likely to join your lists and buy from you.
Start another income stream.
When you work with your competition in a joint venture, it’s separate from the income you’re making at your other parts of the business. This will be an entirely new income stream that you can build.
Turn competition into a complement.
The competition can seem scary, but the truth is, the fact that they even exist means your business is viable. You can work with them, turning them into something useful or complementary to your business so that you go together like peanut butter and jelly instead of being negative.
Leverage their deep pockets.
You’re not doing this to be sneaky, so don’t take this wrong, but when you’re a sole proprietor just starting, especially if you’re starting your business as a side gig, your budget is small. The competition has already found its audience, studied keywords, and figured some things out. You can learn from all of that.
Leverage their big audience.
Your competitors have a built-in audience, as do you, that will be attracted to the same things that your audience is attracted to. When you share information, especially information that is complementary to your information, you can leverage their big audience to build bigger.
And more …the truth is, working with your competition more than you actually compete with them will not only improve your business and theirs, but it will create better products and services for the joint audience, enhancing their lives exponentially.
The disadvantages to forming joint ventures are less clear but have more to do with poor planning than that JVs are a bad idea. If you don’t do your due diligence choosing the people you work with, long or short term, you might accidentally align yourself with business owners who don’t share your same morals, principles, and values. Therefore, before you ally with another business owner, please get to know them first and always create firm contracts that spell out each participant’s rights and responsibilities to the JV before you get started.
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