How to prevent bigger companies from taking advantage of you in Joint Venture?

Discussion in 'Growing and Managing a Business' started by mikewelsh, Sep 27, 2009.

  1. mikewelsh

    mikewelsh
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    Everyone knows that when it comes to Joint Venture, it has to be a WIN-WIN situation. Sadly, this is not always the case. Bigger companies tend to "win" more than smaller companies.

    Take for example my business,
    -We're providing a mobile content service where we JV with a media partner. The content is new and yet to be launched anywhere
    -We create and manage the contents (paid contents), they just advertise the contents on their media/network
    -We divide the revenue we get from the contents

    My problem is the media companies (big boys) always wants a bigger cut. Their justification is that their ads spaces are expensive. Well, our contents are not cheap either
     
  2. Fergal

    Fergal
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    Welcome to Business Advice Forum Mike and thanks for posting.

    It might be worth having a look to see if you could advertise your content at a lower cost than the JV option. The disadvantage would be that you would probably have to pay for the ads up front. However, if you can find low cost advertising you just might be able to keep a higher share of your revenue. Have you considered ad networks such as Google Adsense?

    Have you spoken to different media companies to see if any of them would be prepared to offer you a deal, with a lower revenue share for them?

    What type of content are you selling, is it general or focused on a particular subject area or niche?
     
  3. seanstevens

    seanstevens
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    I suppose some of it comes down to how much need to enter into a JV?

    If it is something that you do not think you can do without then does it really matter how much revenue / profit you share as long as you are making some?

    Can you do the same job without the JV? take into account the extra costs versus the extra revenue / profits you could make.

    A JV is a big step and if you are going in with a bigger company they will have certain expectations that you will have to meet otherwise you can end up with extra costs or termination fees.
     
  4. jumeira123

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    It is always better to prepare a detailed contract before coming under JV.That would save you from a lot of troubles.
     

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