Finance 19 October 2018

6 reasons why a joint venture reduces the risks for startups

In a joint venture, you’re running your own business, but the backer is in the background
Starting a business can never happen without some level of risk. The wise entrepreneur will recognise that. The skill is in reducing the risks as far as possible.

And risk rears its head very early in the process of launching a business. it’s there in the primary decision of how to formulate a venture. Think about the three startup options that most people consider first.

Sole trader when it comes to risk the clue is in the title. Sole you’re completely alone. Not a great place to be.

A partnership? How do you even choose your partner? Friends, family or business acquaintances are tempting but there’s a lot of evidence to suggest that such relationships are fragile, to say the least.

And then there’s a franchise. That’s where youll take all the risk – but youll still be working for someone else’s brand and to someone else’s rules.

That’s a bunch of risks before you start. In a joint venture, there are positive advantages that reduce the risks at the outset, and as you grow. Here are six for starters.

  1. Know-how

A joint venture puts you into business with the backing of people who know about starting up businesses.?

  1. Autonomous doesnt mean alone

In a joint venture, you’re running your own business, but the backer is in the background with all the advice and mentoring you need – when you need it.

  1. Cash flow won’t be a crisis

Cash flow is a massive risk for startups. A good joint venture relationship helps you smooth out the roller coaster ride of outgoings and income.

  1. Getting on with the job

it’s like an invisible risk the business of “business”. As a new boss of your own business, it’s easy to be pulled into the myriad of administration, taxation and vexation that comes with the territory. And it means you take your eye off the ball.

In a joint venture, you get the back up to free you up to get on with what you do best. Which is growing your business. The risk is removed.?

  1. The facts of life


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