The most important thing about creating a lucrative joint venture is to carefully prepare and think out every part of the partnership. This means you must put every detail -- and that means every detail -- down in writing! There are three written documents that everyone creating a joint venture must have in order to get started, follow the road to success, and eventually break the agreement if necessary.



The three vital written documents you must create when entering into a joint venture are: 1) a JV agreement; 2) a business plan; and 3) an exit strategy.

The first document, the agreement, is really a contract. You and your partner will create a legal document that outlines and defines the entity you are forming. It will list the goals of the venture, each side's responsibilities, how long the JV is expected to last or the circumstances that would lead to its demise. It also will cover how revenues and profits will be split, and everyone will want to know that up front.

Because this is supposed to be a binding legal document, each party will want to have his or her lawyer review the final copy before anyone signs. You might even want to enlist legal help in writing the documents. Ensuring it is legally viable will protect everyone's interests.

If you do decide to go it alone and create your own original contract, it's a good idea to consult the Web for templates and tips and hints. The vast amount of information you will need to cover, plus all the foresight you must have into any eventuality makes it easy to miss some things.

The business plan absolutely requires the participation of both partners. The plan is the document that spells out the goals of the JV, how you'll get there, and what both partners bring to the agreement, among many other important aspects. Your business plan will also be used to acquire funding, such as loans or investments, if they're necessary.

Even if you don't need a loan, you do need a solid business plan. You will refer back to this plan when you're planning new ventures, and you will look to this original plan to see how well you're meeting the goals you set out in the beginning. The plan also lays out many of the practical aspects of your business: marketing, human resources, communication, etc.

When they're done right, business plans can be long -- and often complicated. If this is your first time creating a business plan, it is advisable that you do plenty of research or hire a professional writer. There are writers who do nothing but write business plans for people just like you, and they are easy to find on the Web. Plus, a professional-sounding business plan has a greater chance of getting funded, if that's what you're after.

Finally, you will need an exit strategy. This might seem harsh or as if you're setting yourself up to fail, but just think if something happened and you didn't have one. The average span of a joint venture is about seven years. No one can tell the future, and there's no telling how your circumstances might change in the mean time. It's always best to be prepared in case you have to dissolve the partnership quickly.

A proper plan for an exit strategy will protect both partners' assets and trademarks. If you brought a trademarked item into the partnership, you want to make sure to leave with that trademark intact. Even better, if you decide to sell the JV for a profit, you want to make sure the profit-sharing details are square from the start.

The exit strategy will line out in definite terms what each partner will leave with. Most exit strategies also include a list of possible events that would lead to the dissolution of the partnership, such as meeting specific goals, a rise or fall in the economy or a sale of the JV. Again, since this document is legally binding, it is advisable to have a lawyer peruse it for errors or things you might have overlooked.

When you go about it the right way and put all these aspects of your JV in writing, it will ensure that you walk out of the agreement with everything you had when you walked in. Creating these documents also reveals a sense of your professionalism and commitment to success. Most important, they will keep you and your business partner from fighting a nasty legal battle if and when the partnership is over.