Case Study – Joint Ventures

The problem:

John is a fairly new business owner. He has 2 businesses. One is taking off and the other it seems is about to as well. He has recently been in discussion with a business colleague who has a similar business but he is certified to do certain work which this colleague doesn’t, however what he doesn’t have is the physical equipment.
He has the jobs ready to go but needs the equipment to perform it.
It’s a perfect combination to undertake the business and he thinks that a Joint Venture is the way to go.

What he doesn’t know is that a Joint Venture is actually like starting a whole new business and which requires a large amount of thought into the process for what might happen if things don’t go according to plan.

How we helped:

Luckily, John recognised with our help that it would be best to try the business relationship first as an independent contractor for this project only as he was the one that won the work and this person would simply be supplying the machinery to deliver the project.

This way they could see how they could work together before “getting into bed together” so to speak and having a complicated structure put in place, only to realise that they would later have to dissolve and go through a lengthy process – potentially without agreement

This way they could part ways at any time if it didn’t work out – which as it turned out, was exactly what happened and they were lucky that they didn’t get into a complicated legally binding relationship that could not be easily severed. Phew, lucky!