By establishing early on what you want out of a partnership, you’re more likely to solidify an agreement that benefits your business and limits your potential risk.
Bethesda, Maryland (PRWEB) July 10, 2014
Joint ventures with other companies may seem like brilliant business opportunities to win new work with bigger clients, but they can also put a company at risk. In the event that a partnership turns sour, a business can be set up for disaster.
In his July 2014 Huffington Post article, “Handcuffs or Rocket-Booster? Crafting Joint Venture Agreements that Launch Your Business Forward,” attorney Jack Garson discusses how to get the most out of a joint venture agreement by understanding the risks and being prepared to spot trouble. Among Garson’s top tips for entering a joint venture agreement:
- Scramble less, strategize more. When the opportunity for new business arises, you could find yourself in a scramble to make a team and get the bid. But before you even win the client over, nail out in writing how the work will be divided. The most common complaints from failed agreements come from businesses who rushed in with nothing more than fuzzy promises.
- From prices to profits, formally lay out your financials. Many companies fail to enter into a formal agreement until after the bid is won. This often leads to the larger company taking the “cake” and the smaller company settling for the “crumbs.” By failing to agree on anything formal ahead of time, the smaller company often becomes stuck with smaller profits on a take-it-or-leave-it basis. Protect yourself by determining beforehand who will do what work, how it will be priced, and how profits will be distributed in the end.
- Give yourself an out. Even if you have a formal agreement that explicitly lays out your financials and responsibilities, you are still at risk. What if your partner fails to deliver their share of the work? What happens if your partner does something illegal? Your partner’s actions could not only cost you the contract but could also expose you to a lawsuit. Give yourself a way to end the agreement and make preparations in case the venture leads to a court date.
According to Garson, the best way to protect a business is to make an agreement that can then be modified with each new partner. By establishing early on what a company wants out of a partnership, partners are more likely to solidify an agreement that benefits business and limits potential risk.
To read Jack Garson’s entire article, “Handcuffs or Rocket-Booster? Crafting Joint Venture Agreements that Launch Your Business Forward,” visit the Huffington Post.
For media interviews with Jack Garson on this and other business-related topics, please contact Marc Silverstein at 202-716-9123 or at marc[at]onthemarcmedia[dot]com.