Image by JJM, courtesy of Present Outlook

Contents

• How To Make Money With Nothing – Part 1
• How To Make Money With Nothing – Part 2

What is a Joint Venture

Joint Venture (JV) is also known as ‘business deal’, ‘strategic alliance’, or ‘strategic partnership’. Probably the simplest definition is that Joint venture is a win-win strategic partnership between two or more businesses or individuals who agree to leverage each other’s resources in order to achieve common economic objectives. Resources could be in the form of technology, relationships, access to existing customers, expertise, knowledge, credibility, employees, facilities, finance, etc.

For example, let’s say I’m a Nutrition Therapist and you’re a Personal Trainer. I own a customer list of over 10,000 people who regularly buy my products about nutrition, but my customers are constantly asking me for exercise and fitness advice.  This is not my area of expertise, so I tell my customers to find a fitness expert on their own. One day however, you approached me and asked me to evaluate your books, DVDs and CDs to see if they’ll benefit my clients. I found that your products perfectly complement my own, so we strike a deal and agree that I will recommend your products to my customers and if they buy from me, I get 30% commission for every sale made.

You can easily see how this simple arrangement solved everyone’s problems:

• My customers were frustrated because although they’re getting fantastic nutrition advice from me, I didn’t really know how to best serve them when it came to exercise and fitness using my own expertise alone. But this problem was solved easily and quickly.
• You gained access to over 10,000 people already hungry and ready to buy what you have to offer. You did this with no advertising fee, no expensive and time-consuming marketing campaigns, no cold-calling, no frustrating and long sales process. In fact, you didn’t even have to pitch to them! Because my customers trusted me, they automatically trusted you by virtue of my recommendation.
• I was able to keep my customers 100% happy and healthy by adding immense value to them, plus I got richly rewarded for every sale!

This is a happy ending, but what if you don’t have a business, customer or products of your own? Or what if you don’t have anything at all? Well, if you had the right knowledge you would have been able to spot the problem as an opportunity, and introduced the Personal Trainer’s products to the Nutritionist, and made the deal happen. This is what brokering is. You could have taken a 10% commission from each side, totalling to a 20% commission for every sale made. This is possible by making a few phone calls or sending a few emails, and you would have solved all of their problems, too. If it hadn’t been for you, they would still be making less money.

The Need for Joint Venture Brokers

Strangely enough, JV is usually perceived as something that only big companies do, maybe because we read about them in the news. For example, AutoAlliance International is a JV between Ford and Mazda; MSNBC is a JV between Microsoft and NBC Universal; Sony Ericsson is a JV between… yup, Sony and Ericsson.

You’d think that because the BIG Players are doing it all the time, small players will be doing it as well. However, there is a lot of evidence that the majority of small businesses and solopreneurs don’t practice JV as often as profitably possible, probably because of limited beliefs, having the scarcity mindset, or a simple lack of financial education.

That’s why there is a HUGE need for Joint Venture brokers – ordinary people who can spot problems as opportunities and pull together the best suited people and resources to form effective solutions. Joint Venture brokers need no product of their own or business or resources of their own, just an ability to solve problems and identify resources. They simply spot the jigsaw puzzle, find the pieces that fit and put them all together, so to speak. The only catch is that in most cases, JV brokers need to educate the business owners they deal with. But that’s OK – all that’s needed is present the no-risk solutions in a compelling way.

Characteristics of Successful Joint Venture Brokers

Right Mindset

As with any endeavour worth pursuing, one must have the right mindset in order to be successful. A successful JV Broker understands that in order to serve well, she must focus on other people’s interests and take time to find out what other people really want, so she can give it to them. Successful JV brokers are not like the usual salespeople you encounter who try sell to you whatever they are selling regardless whether you need their product or not. In contrast, JV brokers simply help people get what they want quickly, easily and cost-effectively.

Know How to Listen Well

Successful JV brokers don’t focus on convincing you how great they are. Instead they focus on YOU and how they could best serve you. They understand that people are either motivated by avoiding pain or seeking for more ways to enjoy more and more pleasure. They know that if they listen close enough, they’ll find out what pains other people are trying to eradicate or what pleasures they want to experience. Other people’s problems are opportunities for JV brokers. Other people’s resources are resources they know how to leverage.

Trustworthy

Successful JV brokers understand that they get paid an amount directly proportionate to the value they are able to give, so they continually seek to add more and more value to more and more people.

They do what they say they will do. They are generous and focus in WIN-WIN arrangements. They are professional and yhey understand that the relationships they have are far more valuable than anything else so they proactively nurture their relationships.

How to Arrange Potential Joint Venture Deals

Brokering JV deals is actually quite simple. It’s best to start with your already existing relationships. Robin J. Elliott calls this your NEER – Naturally Existing Economic Relationships.

When approaching people to present your case, all you really need to do is make them understand how they will benefit from your proposal with little or no risk. Consider this approach that Robin J. Elliott of Dollarmakers advocate:

“If I bring you access to markets, prospects, buyers, customers, advertising, that you never had and I had to turnkey it all, do all the work, and you had no risk, work or cost, could I take X% of the found money/profit/incremental profit?”

Some business owners will refuse to give you a commission worth your time, if at all – but only because they don’t understand, so you’ll have to work on educating them that x% of something is better than 100% of nothing. They need to understand that effectively, what you’re bringing them is money they could have never have had, so they really are better off working with you.

Most of the time you need to get business owners understand the following concepts in order to get them to fully see the sense in splitting profits with you, the JV broker:

1. Customer’s Life Time Value (LTV) – is how much profit a business can make out of one customer as long as that customer remains a customer. This takes into account the potential referrals that customer can make. Drug pushers know this that’s why they will often give away lots of initial freebies because they know that once you’re addicted, you’re theirs.
2. Acquisition Cost – is the cost of getting a new customer. We all know that trying to reach new prospects and converting them into buyers can be a long and costly process, but a  well-executed joint venture can easily address this problem.
3. Customer Attrition – the amount of lost customers, often expressed in percentage. Again, through a JV deal, businesses can easily reactivate their long lost customers in a cost-effective manner.

Of course, there are unbelievably ignorant people out there who are still in business and they will say no to your proposals even after you try to educate them. The best thing around this is to simply move on and approach their competitors.

That’s it for today! On Part 3, we’ll explore examples of Joint venture deals and how we can broker such deals.

If you have any comments, questions or suggestions, feel free to post them below.

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Related posts:

1. How to Make Money With Nothing – Part 1
2. How to Make Honest Money With No Risk, Fast
3. How to Make Money with Nothing – Part 3