Choosing the right joint venture partner

The ideal business partner in a joint venture is one that has resources, skills and assets that complement your own. The joint venture has to work contractually, but there should also be a good fit between the cultures of the two organisations.

Finding a suitable joint venture partner

Start by looking at existing customers or suppliers you already work with. You could also consider competitors or other business contacts.
When choosing a partner, consider:

• How well do they perform?
• What is their attitude to collaboration, and do they share your level of commitment?
• Do you share the same business objectives?
• Can you trust them?
• Do their brand values complement yours?
• What kind of reputation do they have?

Consider carefully how you will plan your joint venture relationship with a potential partner.

Joint ventures - due diligence checks

When assessing potential partners, carry out basic due diligence checks. Start by confirming their legal status and that they can enter into a joint venture.
You should also check:

• Are they financially secure?
• Do they have any credit problems?
• Do they own assets that they will be putting into the joint venture?
• Do they already have joint venture 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?

You can get information about a company for free on the GOV.UK website.

Protecting your interests in a joint venture

Before entering a joint venture, make sure you protect your business interests. You may want to work with a solicitor to prepare legal documents that protect your trade secrets and intellectual property. You should also check whether your potential partner already has similar agreements in place with their employees or consultants.