What is a joint venture? Great question! A joint venture (or strategic alliance) is an agreement between two or more businesses to help each other attract more clients and expand their businesses.

In this video tip you will discover the 5 keys to making your joint venture a success:
1. Select the right joint venture partner
2. Offer value to your joint venture partner/s
3. Give your joint venture partners a trial or sample
4. Organise all the marketing materials needed
5. Look after your new clients

PS: In this example we have a hairdresser and a coffee shop owner forming a joint venture. Don’t laugh at the characters:-), it’s a visual learning experience!

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Christo: Hey, what are you doing?

Franziska: Hello. I’m just working in my salon, you’re stepping on to my client.

Christo: Oh, right. Working in your salon.

Franziska: Yeah, just cutting somebody’s hair.

Christo: You’re a hairdresser?

Franziska: Yep. She’s going to a wedding and I’m just making her look nice.

Christo: Oh, good. She looks beautiful. I’m from down the street; I have a cafe just down the road.

Franziska: Oh, nice.

Christo: Yeah, I brought you a coffee.

Franziska: Oh, thank you. You look like you need a haircut.

Christo: Oh, nah. I was thinking, you know, I see you’ve got a successful salon here and you seem to do a really good job. And you got a lot of fantastic clients, amazing clients. I think we could do some sort of strategic alliance together.

Franziska: Strategic alliance, what’s that?

Christo: A strategic alliance…

Franziska: It’s a good coffee.

Christo: Thank you. Well, a strategic alliance is where two of us, two business owners team up and what we could do is, I can make the experience for your clients even better by offering you… I’m alright. Free coffee to give to your clients, no catches, no anything, I would just give you a bunch of vouchers that you can give out to your good clients, if you want, maybe to your best clients.

Franziska: Yeah.

Christo: And, uh, you can give them, let’s say, if you wanted to, if they spend over $50 they get a free coffee, you can send them down, I’ll look after them and give them the best quality of service. And, uh, that way, all it does really for me is, gives us a bit of exposure and it’s a great way for you if you could offer a bit of extra value, what do you reckon?

Franziska: Yeah, well, my clients would love that, I think. Because they sit here for a couple of hours and I think that they would be really happy to get free coffee. I can’t believe that you’re generous, but I guess you’re doing it so that you get new clients, is that right? So that people can come back for more coffee, is that why you do it?

Christo: Yeah, well, to give you the honest truth. I approached you and explained to you that it’s a free value so you can give more value to your clients, of course. And then, you can give them a better service, but it is true, yes. And, I know that, the clientele that you get, I think that they’re the right kind of people, so I want to team up with a business like yours because you’ve got people with money. They look like they’re obviously looking after themselves, they’re willing to spend a little bit.

Franziska: Yeah.

Christo: I’m not saying that you… Because your salon is a top quality salon.

Franziska: Yeah.

Christo: And, uh, so, they’re the kind of people that I’d like to get in to my cafe. And usually when people have a coffee, they’ll bring a friend. So, therefore, I might sell anyway and I can show them how good the coffee is, as you saw.

Franziska: Yeah, I like it. Fantastic.

Christo: Then, they’ll keep coming back for more.

Franziska: That’s fantastic! I love that. So strategic alliance, so what do you need to look out for when you select a strategic alliance partner?

Christo: Ah, very good point. A strategic alliance can be done by any business, just about any business with another business. So, what you can do is you look for a business that has a clientele that you would already like. I don’t know why I’m talking. I guess you look for a business that has the character… Clients that you would like to get.

Franziska: Yeah and okay, cool. And then, you offer massive value, so, you as a strategic alliance partner, you offer massive value to a business that is non-competitive and has the similar target market.

Christo: Yeah, exactly.

Franziska: Cool, what else?

Christo: So, see the target market. The closer the business is to working in a similar field will actually be better too. So, let’s say, it’s a… You know if you work with a… If you’re a business coach, you could team up with a bookkeeper. So you’re in the same field of improving business or people who are spending.

Christo: Or a nutritionist might team up with a gym owner because the people that are going to the gym, they’re the ones spending money to look after themselves, they are more than likely to spend on nutrition as well.

Franziska: We’re not very close in the business, are we, though? Because you sell coffee and I make people look good… You make them coffee to make them look good.

Christo: I keep them awake and I give them joy. Now, yes, you’re exactly right, it doesn’t have to be the same business in the same area, of course, just the same clientele. And of course, you’re going to ask the business in the right way. So, as I approach you this morning, just a way to offer value, bring value to that alliance partner’s business. So you approach them and offer them value that they can pass on to their clients. So it looks like it just comes from the business owner, I want this to look like you’ve paid for the coffees for your clients.

Christo: And that’s even going to be more beneficial to me because it looks like you regard my cafe so highly, that you pay, you know, to send your clients there.

Franziska: Yeah.

Christo: So, I’m going to make it look like it’s on you.

Franziska: Yeah. I wouldn’t lie to my clients, though. Like I wouldn’t say paying for the coffee. I think I would just give them the voucher and say, “You can go for a coffee.”

Christo: Yeah, but you can go on and say, “As a valued client of Magical Salon, you’re entitled to a free coffee.”

Franziska: Awesome. Okay. What else do we need to do? This is it? Are we doing it?

Christo: This is it, we’re doing it.

Franziska: Are you organizing any marketing or are am I organizing anything?

Christo: I’m going to organize all the marketing materials, so you don’t have to worry about a thing because you are now my alliance partner, I’m going to put together some flyers, very easy. It’s a low cost option. I’ll deliver those to you, you can hand them on, very easy straightforward. Thank you, done deal?

Franziska: Done deal?

Franziska: So, what would I like you to do is think about if you have seen a strategic alliance in action or if you have done a strategic alliance yourself, with your business. And post below a comment about how you did it or if you have seen one, what did you like about it? Thank you so much.

Christo: Thank you very much.

Franziska: Cheers.

Christo: Cheers.

Franziska: If you like this video, please share it on your social media networks. You can share it on Facebook, on Twitter, on Google Plus, you can even like the video below. And also, please leave us a comment below just so you help us spread the love. And share it with your friends and family. Thank you so much.

Christo: Yes, and if you would like more marketing tips and tricks for small business, go to BasicBananas.com and leave your name and e-mail address and we will definitely send you some cool stuff.