How to Create an Effective Joint Business Plan

For two businesses to form a joint venture, they need a plan that outlines the nature of the business coalition. A joint business plan defines the state of the companies involved, the purpose of the joint business and the partners’ responsibilities.

A joint business plan describes all the activities that these business ventures must carry out to achieve specific goals.

The relationship between the two parties and their goals must be clearly understood. After creating the business plan, it must go through a legal review to test its legitimacy. In your business planning, you work together in a collaborative relationship toward mutually agreed terms.

Business planning for joint ventures helps the parties leverage resources, reduce costs, combine expertise and/or enter foreign markets. A well-defined joint business plan is vital for any agreement and business strategy.

 

 

What is a joint business plan?

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A joint business plan is a document that defines a merger between two or more companies. It describes the purpose and responsibilities of each partner in the incorporation. You may also see it as a collaborative process of planning where a supplier and retailer agree on both long- and short-term goals, including growth, finances and shared initiatives for profitability.

The purpose of a joint business plan is to design a win-win strategy for increasing consumer sales. This plan allows the partners to build a formidable relationship with retailers for mutual support and benefits. Having agreed upon goals, both parties share insights on a common vision for better support, customer growth, enhanced process and improved sales.

Business planning depends on interested parties sharing their plans with defined mutual growth opportunities. The partners can detail and share strategic planning, growth strategy, tactics and any area of competitive advantage.

The joint business plan is created once a partnership agreement is mutually beneficial and defined. Parties would draw up, approve and sign a formal contract before the execution of the plan. This is followed by a periodic review of joint scorecards based on necessary performance metrics to fine-tune strategies.

The joint business planning process comprises every possible logistic, including human resources planning and how to reach project milestones. Resource accountability is vital to building trust. Your best tool for transparent resource use and accountability is a resource planner.

If the employees of the venture will need to go to a different location, the venture will likely have difficulty planning their tasks and locations. TimeTrack Auto-Scheduling provides joint ventures with a transparent planning tool that reduces effort and enhances error-free shift planning.

Types of joint business plans

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Standard plan

This is often referred to as the working plan. It offers an overview of the company, outlines its goals, and details when and how entrepreneurs wish to achieve the goals. Such a plan helps secure funds, investments or loans. Within the plan, you could specify how you will use investor funds and their potential profits.

What-if plan

Sometimes things don’t go as planned in business. The what-if business plan defines the various roadblocks that a company might face as it strives to achieve its business objectives. The venture is largely at the whims of external factors, including the supply chain and stock market. You need to outline a predictable scenario to let business partners know how to recover their funds.

One-page plan

While a detailed plan is vital, there are instances where you will need to provide an abridged version of your plan. This one-page business plan outlines the summary of demand, solution, model, management team and action plan.

Start-up plan

A business plan for entrepreneurs, especially those in the early stages of their business planning, will need a start-up business plan. It is designed to give potential investors the bigger picture and outline how you want to achieve your goals. It often includes an executive summary, background, product and service descriptions, market analysis, costs and financial projections.

Expansion plan

This is a business plan that’s necessary when you need to scale your business and identify the necessary resources for its development. These could be financial investment, an additional workforce, new products or raw materials. This plan will detail the business background, needed resources and how they will contribute to growth and business expansion.

Operational plan

An operational business plan revolves around near-term goals, especially those you will work towards achieving within a year. It defines the activities your venture will focus on and emphasizes the role of the workforce and budgeting in achieving the operational goals. In most situations, the heads of departments are key participants in the operational plans because of the need for approval in achieving the goals.

Strategic business plan

This is different from the others because it focuses on how departments can work together. This venture plan is more comprehensive and requires senior-level approval before implementing goals. This plan answers the questions of how to achieve goals, what resources are needed and the execution plans for achieving the goals.

Companies that benefit from a joint business plan

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A joint venture exists mainly as a contract between new cooperating partners. In forming a joint venture, each of the business partners agrees to the assets they will bring to the table and how income and expenses will be shared.

While a joint venture is a corporation between two or more entities, each of the companies, be it an individual, company, corporation or group of individuals, still has its original legal status, though not all joint ventures result in a new business entity. These companies could be sole proprietorships or partnerships, limited partnerships, corporations, limited liability companies or non-profit organizations.

Examples of a joint business plan

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Perhaps you have an online venture selling high-quality products at reasonable prices, while needing to increase brand strength. Such an example of a joint business plan outlines a company overview, executive summary, product and service offerings, marketing strategy, market analysis, budget and financial planning.

A joint business plan may be designed for ventures rendering menu services such as lattes, espresso, coffee, cappuccinos, and sandwiches. The business plan outlines an executive summary and studies your competition, target market, marketing plan, ownership structure and operational plan.

A joint venture could be designed around offering services such as shipping, faxing, postal and copying to residents to conduct research, create debate space and generate ideas. This example of a business plan will include an executive summary, a vision and mission statement, goals, objectives, and measures, organizational structure, marketing analysis and a financial plan.

Top strategies for effective joint business plan

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In a joint business venture, there are risks which include rising complexity, cultural diversity, high failure rates and language diversity. The strategies detailed below will benefit the venture in navigating the challenges through effective joint business planning.

Strategic plan

Strategic global planning is an effective business practice for entering a new market. It helps to identify opportunities and threats. Before beginning strategic planning, be sure that a joint venture is the right action for you. Compare the strengths and weaknesses of the partners to confirm a good match. Your strategic plan should explain why you want to collaborate with that partner and what you hope to achieve, how to monitor trends and collect good data. Some of the reasons you may wish for a new joint partner may be to enter a new market, geographic expansion, financing, etc.

The right partner

The choice of partner is crucial, but what is more important is understanding the effectiveness of partners in delivering on their promises. Do your due diligence on your partner’s attitude toward collaboration, performance and level of commitment. What about sharing the same objectives?

Effective communication for a great relationship

After your investigation, if you deem the partner fit, find mutual ground. Communication is the key to a good relationship. Make sure your partner understands the foundation of the joint venture and agreement. Ensure they agree on human resources, financial contributions and goals. To consolidate the stability of your venture, be upfront, honest and transparent about your objectives.

Clarify how, what, and where

Be clear on the vision, strategic plans and scoreboard to ensure that everyone is energized and united about the goal. Define a common working pattern. This has to include conflict management, decision-making, collaboration, problem-solving and technology strategies. Focus on win-win solutions.

Track performance

Is everyone putting in the hours and making productive headway? One way to gauge this information is by time tracking. One of the challenges for companies whose employees work in shifts and in different locations is tracking attendance. TimeTrack Attendance Tracking helps companies monitor employees’ work hours and leave days, so that managers can stay up to date on potential delays.

Once you have set out the goals and vision for the new venture, establish key performance indicators, the data you want to track and the process to measure those performance metrics. This involves creating a joint scorecard for each metric against trends and competition. The targets you set must guard against possible problems the partners might encounter.

Build trust

Your best joint business strategy is to build trust and create value, without which your partnership is bound to fail. Trust is the foundation of every partnership. It is an important factor in business planning. Without it, neither partner can succeed. How do you manage diverse cultures, interests and languages if the partners lack trust? Trust builds team strength and encourages creativity while promoting collaboration.

Good leadership

The cost of poor leadership is so high that you must not venture into joint partnership without assurance of good leadership. Focus on building good leadership and not just creating “bosses”. Leadership presents the biggest opportunities to change the performance narrative. Create a strong leadership team, from whom all employees can learn.

Conclusion

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A joint business venture is not without its challenges. To ensure a successful collaboration, focus on a clear strategy, excellent communication, transparency and strong leadership.