Issue Date: 
Monday, February 15, 2016

5 Reasons Why Joint Ventures Fail

Joint ventures are collaborative arrangements where two or more businesses decide to collaborate for a common purpose such as bidding for a tender.
There are many examples of successful Joint Ventures, such as Sony-Ericsson, Virgin Mobile India Limited, Nokia (Siemens AG and Nokia Corp), Cadbury Schweppes PLC Carlyle Group Joint Venture and Chery Jaguar Land Rover Automotive Company. They are all well-known and are very lucrative. But having a Joint Venture does not guarantee success.

There are many reasons why Joint Ventures fail and five of the most common reasons are:
1.    Lack of a proper Joint Venture Agreement. The importance of a proper JV Agreement cannot be emphasized enough. Ensure that you have a proper contract in place that covers the entire foundation of your JV.
2.    Lack of finance. If one of the parties to the Joint Venture is struggling financially it can be the downfall. The simple reason is that the struggling partner will drain the Joint Venture, not allowing the it to build up capital for challenging           times or future expansions.
3.    Control issues. In any relationship you will always find that someone needs to be the leader or the decision maker. A Joint Venture is the same - somebody needs to be in control. Ensure that the correct leadership is appointed. 
4.    Compatibility. Sometimes in the rush of securing a tender a business owner will go into a Joint Venture with another business owner who does not have the same values and ethics. This is a dangerous mistake. Remember that you           have established a certain way of doing business and that you have invested a lot in building the ethics in your business. Ensure that the Joint Venture partner that you sign up with is compatible with your policies of running a                     business. 
5.    Unrealistic expectations. Ensure that all role players are on the same page when it comes to the Joint Venture's successes. There must be clear indicators on the chances of winning a tender and also the expected profits to be                 made after the awarding of a tender and the completion of the tender. All the parties involved must be briefed on the expected profits so that there are no unrealistic expectations from any of the parties involved.

If you tend to these five critical areas in your Joint Venture the chance for it to succeed will increase immensely. 

To learn more about this and many other tender conditions please attend one of our How-to-Tender workshops. For more information on the tender courses please email Werner at werner@how2tender.com

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training

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(Re-advertisement) Supply, delivery and commissioning of electrical equipment and panels for NQF level 3, 4 & trade test 2019-04-12 11:00 LEPTVETCOL2019/ 001
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Provisioning of Catering services to RTMC Training College 2019-04-09 11:00 RTMC BID 24/ 2018/ 19
Provision of Services of an Occupational Medical Practitioner (OMP) and Occupational Health Nurse Practitioner (OHNP) for Parliament of RSA 2019-03-29 12:00 B1/ 2019
Phuthaditjhaba Department of Pension Administration Agency: Alternative Office Accommodation and Parking Facilities 329.32m² And 23 Parking Bays(3 Years) 2019-04-09 11:00 BL18/ 098
Supply, Delivery, Erection, Maitainance and Removal of Movable Infrastructure for the 2019 Presidential Inauguration 2019-04-09 11:00 HP18/ 021GS
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Hire of suitable furnished residential accommodation:6x1 bedroomed flat/apartments plus 6 secure on site-parking bays and for medical interns 4x1 bedroomed flat/apartments plus 4 secure on site parking bays at Edumbe CHC, Edumbe: Department of Health . Contract Period: 12 months and 24 months for medical interns 2019-04-15 11:00 ZNT 7859 W
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VMWare Software 2019-04-05 12:30 10401236
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Hire of suitable furnished residential accommodation:15x1 bedroomed flat/apartments plus 15 secure on site-parking bays at Eshowe Hospital, Eshowe: Department of Health 2019-04-15 11:00 ZNT 7860 W
Saldanha: Military Base: Construction of new sick bay facility 2019-04-17 11:00 CPT1019/ 18
Presidential Inauguration: Provision of Stage, Sound, Big Screen and Related Infrastructure at Loftus Versfeld Stadium Functionality Criteria 2019-04-09 11:00 HP18/ 016GS

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Must my business be registered in order to tender?

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Once, a very anxious business owner phoned me and asked if I can supply him with a CK number. I was amused by this and first asked why he asked me for such a number and secondly for what did he need a CK number for? He said that because of my Tender Manual that he bought, he thought that maybe I can help him with a CK number. Also, at the briefing session of the tender that he was responding to, the person in... Read More

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