Joint ventures (JVs) are one of the best ways to lure new leads and customers. By partnering with other businesses whose customers are part of your market, you have an additional profit centre of incremental income. For example, an attorney can refer his clients to an accountant, and the accountant in turn refers clients to the attorney. It’s a win/win situation, because many times a new business will need both an attorney and an accountant. Depending on which one they approach first (the lawyer or accountant), they’ll be referred to the other.
JVs can go much further than this simple arrangement, however. They can be very complex, and there can be 3-way deals going on. In fact, JV brokers make their money by taking a slice of the profits between two or more different businesses, where he has brokered the deal and set up everything between them.
The key to making these deals work is to make sure that you let a prospective JV partner know from the start that:
- You’ve discovered an additional profit centre for them that they are probably unaware of (offer projected profits, if possible).
- The additional profit centre will not detract in any way from their current income stream.
- The additional profit centre will not incur any additional costs or labor on their part to implement.
- The additional profit centre will not incur any risk whatsoever on their part.
- You will perform all of the leg work to set it up.
- They can stop at any time for any reason.
There are so many potential JVs that are possible that there’s no way to cover every conceivable one here. So instead I will give some examples. Some of them may be applicable to your business. Some may not. And, like the accountant and lawyer example I gave above, it’s not feasible for me to cover every type of business. Therefore, you should look at each example and see how it may apply to your business. These examples are designed to get you thinking creatively. By no means is this an exhaustive list. It’s designed to put you in the right mindset, where you will look at your business and others around you and see possibilities that you never noticed before.
A great course on JVs is the JV Mastery Course, by Jay Abraham and Marc Goldman. It may be out of print now, but if you can get a hold of it, I highly recommend it. If you have it, you may recognize some of these examples from the course (no need to reinvent the wheel here). Others are variations and some examples that I have personally done.
One Tip: If you try to set up a JV with a business, and they already have a deal in place with someone else, you can take that information to their competitor and say “Your biggest competitor is already doing this.” And if your partner ever decides to stop the JV deal, you can go to their competitors and say the same thing (Hint: if you let them know you are going to do that, they may reconsider). Never feel that you have to partner with one specific business exclusively. Ideally you should have JV deals going on all over the place.
You can also do JVs between your business and another, or you can broker JVs between two different businesses and take a cut.
I’ve broken these up into 4 posts of 10 ideas so be sure to look around for the others, or a way to find them 😉
1) Sell an Idea – A lawyer knew how to make a million dollars in a year with one person and three associates. Since many attorneys don’t make that much, he codified his knowledge and had someone sell it. A realtor had a list three times better than anyone else, so she trained other realtors for a fee. A lumber mill knew how to kiln dry wood and get greater quality wood in less time with half the energy cost, saving him millions of dollars. He taught his techniques to other lumber mills. If there’s something remarkable about your business, or something you know how to do better than 99% of everyone else, you have an opportunity to license or teach your skills to others.
2) JV With Your Suppliers – Your suppliers generally want you to be more successful, since it means more sales for them. They may fund sales people, mailings, extra staff, etc. You’ll never know unless you ask them.
3) Seek Out Other Business That Cater to Your Market – I used the lawyer and accountant example above. A realtor may JV with moving companies, custom framers, carpet cleaners, pest control services, lawn care companies, painters, electricians, plumbers, the list goes on. Just be sure to JV with those businesses who have products and/or services your customers may need (i.e. a realtor JVing with a video game company doesn’t make much sense).
Make a list of businesses who want and need a constant flow of leads: lawyers, doctors, dentists, realtors, home remodelling services, carpet cleaners, pest control services, etc. Broker deals between them where there is a fit to generate leads.
4) Leverage Buyers and Sellers – A business broker sent a letter to 30,000 CPA firms saying “We’ve got buyers ready to pay all cash to buy your practice whether you stay or not.” 500 people responded, so he took those 500 people out and mailed the other 29,500 firms saying “We’ve got 500 hundred firms right now that are big money makers ready to be sold. Owners will stay or not. Terms or cash is your choice.” Then it was a simple matter to match the buyers to the sellers, resulting in a million dollars worth of commissions. This is a very powerful technique that can be used in a variety of different ways.
5) Match Front-End/Back-End Products – If you sell a high-ticket back-end product, you can seek out people who don’t yet have a back-end product and JV yours via an affiliate program. Likewise, if you don’t have a high-ticket back-end product, the reverse is also true. There are plenty of expensive product and service sellers out there to partner with.
You can also broker deals between businesses selling front-end books and tapes and businesses selling back-end expensive seminars, for example.
6) JV a Sales Force – There are plenty of professional sales people that sell a variety of different products on a commission basis. It’s a snap to put an ad in the paper to get these folks to sell your products and services.
7) The Neon Sign Approach – I call this the “Neon Sign Approach” because Jay Abraham talked about a particular JV deal with a neon sign maker. He would have high school and college students drive around at night and look for neon signs that were not lit or only partially lit. Then he would pay them per “find,” and report those locations to the neon sign maker. Voila! Instant leads.
A variation on this approach could be done with motor vehicles. There are numerous services to get the names and addresses from a motor vehicle registration plate. Those same high school and college students can be on the lookout for broken taillights, body damage, cracked windshields and the like. When they find one, they write down the license plate information and give it to you. You can then supply the leads to auto repair shops, body shops, windshield replacement shops.
What if you owned a furniture store? You could JV with door-to-door salespeople and have them on the lookout for badly worn furniture. They’re already going to be in their prospect’s living room, right?
How about the furnace maintenance person who keeps an eye out for water damage in the basement? If you offered basement-sealing services, wouldn’t you want as many furnace maintenance folks as possible getting you leads?
8 ) JV Mailings – For certain product or service offerings, direct mail can be prohibitively expensive. That’s why card decks and Value-Paks are so popular. But aside from those types of mailings, you can always partner with a non-competitor (or two or three) that offer a complementary or similar product/service with the same target market as yours. By splitting the cost of the mailing, you still get your message out, but at a much-reduced cost.
9) JV Inserts/Flyers/Circulars – Similar to JV mailings, you could arrange to have your flyer, insert, or circular inserted into another publication already being mailed. This “hitching a ride” approach works best when your audience is targeted, although newspaper inserts are popular with local bricks and mortar businesses. The JV part comes into play when you pay so much per lead or a percentage of all sales resulting from the arrangement. Depending on your price structure, you can pay a percentage of the first sale only, or a tiered approach where a smaller percentage is paid for all first year purchases, a percentage of the back-end purchase, etc. You need to determine what types of deals bring in the biggest profits for you, while still providing a valuable incentive for your JV partners. And that really goes for any type of deal.
10) JV a Mini-Seminar or Teleseminar – Using the lawyer/accountant example again, the two could get together and hold a seminar for new business owners, offering a package deal for both of their services.