Have you ever thought about creating a joint venture? There are many reasons people do. Some of them want to build on their company's strengths by entering into a mutually beneficial partnership. Others want to pool financial resources, use new technologies or try out a new management procedure. The main reason to enter into a joint venture is to increase capital and expand your business.

The hardest thing for small businesses is often to become established within a community. Old businesses already have firm and wide customer bases, and building a good set of regular customers is time-consuming. Many new entrepreneurs also worry about spending too much on advertising, and this can be another great advantage of creating a joint venture.

Let's look at an example of a small business taking advantage of a joint venture.

Joy designs purses using colorful materials and decorations. She loves her craft and after several years of working in an office setting and making bags on the side, she decides it's time to open her own business.

Joy's grand opening is a great success. She's found a wonderful space with lots of windows to display her wares, and her colorful banners and posters placed around town have brought many people to her store. Unfortunately, the excitement soon wears off and her sales begin to rapidly decline.

Joy is determined not to give up. She considers advertising in her local paper, but she's not sure she can afford to buy a full- or even half-page ad. And why bother if she's going to have an ad the size of her thumb in Section D? Suddenly, Joy is struck with what she thinks is a very original idea. She is considering asking her supplier to make a deal that would benefit them both. What she's thinking of is a joint venture.

Joy contacts the woman who owns the store where she gets her supplies. She's been a regular customer there and makes large orders at least once a month. She's hopeful that the owner will like her idea.

Joy proposes that she set up a display of her purses inside the shop. The owner of the supply store would receive a percentage of any sales made inside her store.

That way, both parties benefit. Joy is able to advertise her wares in an established business for free, and the supply store receives a profit for allowing her to do so. Plus, customers to the supply store get to see what a final product using her supplies looks like. The store also retains Joy as a loyal, returning customer.

Truth be told, that is a very simple example of a potential joint venture. Still, even the smallest business deals can aid both parties in growing their business and profits. Joy lucked out by choosing to do business with someone she knew fairly well and already had a relationship with.

In a real-life scenario, it can be much more difficult to convince another business that entering into your joint venture is a good idea. There is a necessary amount of trust involved, and each business has to be convinced that the other will uphold their end of the deal.

Before you make a final agreement on a JV, it's vital to spend time with your potential partner. The two of you will discuss your needs and desires and what you can realistically expect from the agreement. It is absolutely necessary to create a detailed, clear and concise business plan that lays out every detail of the partnership.

It's also important to remember that you can shop around for different partners before creating a joint venture. There are likely many different joint opportunities that could aid your business in many different ways. There's no need to jump on the first thing that comes along. You can create a shell JV before you even approach a potential partner, so that you have something to bring to the table when you talk to someone.

When you take the time to think creatively about how JVs can help your business succeed, determine who your best partners could be, and take the time to carefully plan the venture, your business can grow by leaps and bounds.