Small businesses may want to consider joint ventures

3/17/2011

With the economy on the mend, many big corporations are looking to either acquire or enter into joint ventures with smaller businesses. For the small company owner, a joint venture provides a number of possible benefits, Inc. magazine reports.

The key is identifying joint ventures that will work for your company. Not all joint ventures will be good matches. Entrepreneurs should take a good look at the company offering to enter into a joint venture before committing to it. If there are no clear benefits for the business owners, they should steer away, even if the acquiring company has brand recognition or is incredibly profitable.

"Find out if they have been in a joint venture before and how those arrangements worked out, ideally by interviewing the companies they partnered with," Dr. Henry Chesbrough, executive director of the Center for Open Innovation at UC Berkley's Haas School of Business, told the source.

Additionally, small business owners shouldn't agree to a joint venture just because they are struggling to make ends meet. Taking out commercial loans may be better alternatives to this in the long-run.