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Joint Venture and Partnership? Another way to add multiple income streams to your pocket.Have you considered a joint venture or a partnership to add an additional source of income? Consider the benefits, and make sure you understand the pitfalls. What’s the difference? While both generally have the characteristics of: 1. shared management, 2. the power of each party to obligate the other party or parties, in the business, and 3. division of profits and joint responsibility for losses, they mainly differ in that partnerships contemplate a longer term, more full-scale relationship than a joint venture (JV). JV's, traditionally, anticipate a specific and limited business purpose and/or period of operation, so after the purpose is completed, bills are paid, profits (or losses) are divided, the business arrangement is terminated. What are the benefits? Although there are numerous potential benefits to entering into these business arrangements, for a small business person or an individual looking for multiple income streams, they both are ways to: A word of caution, however: you may be tempted to jump into an arrangement with a friend, family member or even acquaintance based on a perception of a shared purpose and a desire to earn extra income. Yet joint ventures and partnerships need to be considered thoroughly. Keep in mind: on any given day, you may have misunderstandings even with those that know you best and love you the most. How many times have you said something, only to later find that the person you were speaking with completely misunderstood what you were saying, or took it completely differently than the way you meant? This is a frequent problem in business relationships as well.
Business Partnerships - Why Partnerships Fail
Overall, engaging in this type of business enterprise may be an excellent way to enter into a new business or bring an additional income stream to your current business. Consider it carefully!
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