Hello Freinds!
When in a recession, keep calm and acquire, but when that fails, a joint venture is the next best thing.
So go get your Bob Ross wig, and let’s draw up some business.
What Is A Joint Venture and Why Are They So Powerful?
A joint venture (JV) is an agreement that mutually benefits two or more businesses with complementary resources or overlapping customer avatars.
Complementary resources can be products, services, assets, software, customer lists, social followings, and equipment.
Overlapping customer avatars means that all parties target or cater to a similar customer base.
For example, let’s say that your avatar is mountain bikers, and you own a few brick-and-mortar bike shops.
You could ask a helmet company to pitch your bikes to their email list (email drop) in exchange for a cut of any sales that they bring in.
You could do the same with any other biking equipment.
And then pitch them in an email drop to your list as well.
Now, why is this strategy so powerful? Both sides are taking something that they already have and sharing it for a win-win.
JV’s are also perfect with companies that only contact their customers once!
Examples of this are service companies for uncommon services like plumbers and electricians.
Or companies that only sell a single, one-time use product.
The Caveat
If JV’s are so great, why aren’t there more of them?
It comes down mostly to common entrepreneurial psychological fallacies or lack of skills like:
Poor communication
Low self-trust
The ability to trust a direct competitor
Being the big-cheese and wanting to do everything alone
Overcomplicating the legal side
“Do long term business with long term people” – Naval Ravikant.
This simple rule will quickly deal with any road bumps that come up in a JV.
JV’s let both sides grow their business for basically zero out of pocket.
They are thus allowing you to get more creative with how you solve business problems.
While the thought is fresh in your mind, map possible JV opportunities that your business could take!
Source:
https://www.acquirescaleandexit.com/what-is-a-joint-venture-and-why-are-they-so-powerful/
9 Questions For Identifying A Great JV Partner
All of these questions are related to email marketing.
These questions instantly give you a green or red light on whether you should move forward in an email drop or not.
An email drop is where you promote your product on someone else’s list.
These questions let you know how warm (engaged) the potential partner’s list is at a high level.
Question 9 is nice to have. You won’t be approaching someone for a JV if they don’t have your customers.
But asking if their list is tagged in a way that will benefit your offer is the perfect transition into more granular conversations.
What percent of your list is buyers vs. visitors/leads?
How big is your email list?
How often do you email?
How often do you get sales from the list?
What percentage of your list are repeat buyers?
What is the average price of what people on your list pay for?
What kind of promotions do you send your list, and how often?
How often do you purge your list?
Is your list segmented for xyz?
These questions will allow you to quickly filter through your pipeline and focus on actually closing deals.
If you found value in the post share it with a friend and check out the rest of the blog.
Source:
https://www.acquirescaleandexit.com/9-questions-for-identifying-a-great-jv-partner/
21 Ways On How To Find JVs (Joint Ventures) in 2022
If you’re looking to grow your business externally with as little money out of pocket as possible, here’s how to get started.
First, take inventory of all your assets and skills, for example, email lists, pixels, courses, tools, skills, and team members.
Next, ask yourself who already has my customers? And mind map it right away!
Third, make a list of everything that you need or wouldn’t mind more of—for example, content, emails, tools, software, and people.
Now that you’re armed with what you have to offer, what you need, and complimentary verticals, make your way through this list:
App Stores – Software developers have an email list at the minimum.
Authors in your niche or complementary vertical – if you’re up for it, you could even offer to co-author a book with them. If they’re a best-selling author, you could do all the work to leverage their title and following.
Podcasts – I tunes and Spotify are trending right now.
YouTubers.
Radio Shows.
Affiliate marketplaces like Click Bank.
Social media group owners, for example, on Facebook, LinkedIn, and Meetup.
Sponsored ads anywhere, the big ones being Instagram, Facebook, Google, and YouTube.
Facebook Ads Library.
Google search: __ top sites.
Newsletter publishers mailing lists.
Blogs.
Product launch affiliate boards.
Medium.com.
Article publishing sites like eHow.
Paid Mastermind groups.
Paid events.
Tradeshows.
Your personal contact lists.
Your collective social media network.
Anyone with an active social media following on any platform. This has been coined as influencer marketing and when you’re starting out it’s better to partner with micro-influencers that are easier to work with and have more niche followings.
ASE gets 10% of any revenue generated from this list. (Haha, I’m joking)!
JVs are a blast, but if you want to take it to the next level and acquire any of these businesses that might be potential partners, give us a holler.
Source:
https://www.acquirescaleandexit.com/21-ways-on-how-to-find-jvs-joint-ventures-in-2021/
How To Start A Joint Venture Negotiation
If another company has something that you need and you have something that they need.
How do you start the negotiation?
Here are three steps for starting productive joint venture negotiation.
First things first, start with a pleasantry or short casual conversation. Depending on who you’re talking to.
Two examples of pleasantries from the Selling to Vito book are “thanks for taking my call” and “you’re just the person who’ll appreciate this.”
For example:
You: Vito?
Vito: That’s me.
You: Thank you for taking my call. Have you ever thought about partnering with a bicycle company to sell more helmets?
Selling to Vito techniques should be used when talking with a C suit member or busy high performers.
If your contact is a bit more laid back and open with their time, start with casual small talk. Like how was your week? Or where are you calling from?
Follow what Jordan Belfort teaches and don’t fly off into Pluto, And talk about the price of tea during COVID.
In less than a minute, acknowledge their response. And transition into the reason for your call.
You: Hey, is this John?
John: Yes
You: Hey John, this is Ed. I was calling you about partnering with a bicycle company to sell more helmets. How’s your week going?
John: Good, I’ve been busy.
You: Same here, so have you ever thought about partnering with a bicycle company to sell more helmets?
2. Now, from here, you want to let them talk while taking control of the call.
To set the trajectory of the call, you could say, “based on my research, it seems like there is definitely an overlap in our customer demographics. I’m just going to ask you a few short questions to see how we could best leverage each other’s resources.”
They will either say yes or that they have to get off the phone. At that point, tell them exactly how many customers you have to offer them and schedule a follow-up call.
Vito: I have a meeting in 2 minutes.
You: Our email list has 20 thousand hyperactive subscribers that you could sell your helmets to. Could I email you my open time slots for next week?
If you missed a part of their email, verify it, and correct it, you might not quickly get a second chance.
3. The third thing that you must do is understand their pain and business with strategic questions.
How many helmets have you sold over the past year?
How big is your email list?
How much of last year’s sales were from your email list?
What are your top forms of lead generation?
What is your best-selling product?
The key here is to poke the first pain point that you get.
If they say they only sold 5 thousand helmets over the past year.
Say, ouch, that sounds rough, why is that?
They’ll say something like the competitor came out with a new line.
You would want to use a Chris Voss label here.
“The competitor came out with a new line?” – with a confused tone.
They’ll go into more detail, and you’ll label whatever they say.
It seems like the competitor is eating up your market share.
They will acknowledge you, and at that point, you will go into the benefits of a joint venture between your businesses and go for the close.
If you’re interested in any of the three books mentioned here, check them out on Amazon:
May your next negotiation be a masterful one!
Source:
https://www.acquirescaleandexit.com/how-to-start-a-joint-venture-negotiation/
How To Get To No Faster In Negotiations
Are you struggling with getting people to listen to you?
Chris Voss has stated that getting to no is more important than yes because no makes the other side feel in control.
As an entrepreneur or salesperson, you’re negotiating 24/7. So, it’s in your best interest to get the other side more open to what you have to say.
Getting a no first has been used by presidents, FBI negotiators, and countless other effective communicators.
In this post, we’ll provide you with three formulas that you can start using today to get people to pay more attention to what you have to say.
Would you be opposed to?
We put a man on the moon; would it be impossible to?
It seems like _ are you comfortable with that?
Would you be opposed to?
Would you be opposed to listening to our coaches to make the program work for you?
Would you be opposed to acquiring xyz competitor?
Would you be opposed to testing our service for free for 7 days?
Would you be opposed to having an accountability partner?
Letting someone say yes by saying no is priceless. In all four examples, we got a no that commits the other side to take action, making it one of the final questions you want to ask or the last question you want to ask before getting a commitment.
We put a man on the moon; would it be impossible to?
We put a man on the moon; would it be impossible to try this other manufacturing method?
We put a man on the moon; would it be impossible to leverage credit in your situation?
We put a man on the moon; would it be impossible to track every hour of your day?
This is a spin-off from Sara Blakely’s “We put a man on the moon could we try?” Her version is for getting a yes. But if you haven’t been able to get your one no out of a negotiation yet, it’s perfect.
Here we pushed someone out of their comfort zone or asked for something out of the ordinary.
It seems like _ are you comfortable with that?
It seems like you don’t have a process for getting customers at will. Are you comfortable with that?
It sounds like you let your diet get out of hand. Are you comfortable with that?
It feels like you’ve been in business for two years with little results. Are you comfortable with that?
This third formula is an extended label from Chris Voss. Where he asks:
It seems like
It sounds like
It feels like
For our formula to work, it has to be a negative label; that way, when you ask if they are comfortable, no is the only option. This can be used after the first pain point is revealed.
But you can’t label without fully understanding what you’re labeling. So, if a pain point comes up, pretend that you’re a doctor. Your patient says that their shoulder hurts.
You could say, “do you know why that is?”
When did this start happening? Or use a Chis Voss mirror, which means repeating what they said in 3-5 words in a concerned tone. In this case, your mirror would be, “your shoulder hurts?”
Regardless of how you dig deeper, always go a minimum of two levels deep before mirroring.
Source:
https://www.acquirescaleandexit.com/how-to-get-to-no-faster-in-negotiations/
The 4 Key Drivers of Business Decisions
Get the other side’s attention even if you’ve never done a deal before.
In Selling to Vito, Parinello goes over 4 main topics that businesspeople are always worried about.
And they are:
Making more money
Increasing efficiency
Saving money
Maintaining compliance
If you can connect your deal’s benefits to those areas, you’ll get more interest from the other side.
Now let’s go over how to use each of these in an acquisition or joint venture negotiation.
If you’re reaching out about a potential joint venture, focus on the key benefits and not the features.
For example, you could create a menu of your digital footprint as below:
20,000 email list
5,000 on Instagram
10,0000 on Facebook
7,000 on Twitter
Then explain how a cross-promotion would make the other side more money, fill up their funnel, and save them advertising money (by stating what you charge to promote others, but they don’t have to pay it).
Waiving your regular fee makes your deal a no-brainer.
Now, what if you’re trying to acquire a business instead of partnering with it?
The most important thing here is not to approach the deal head-on.
If you can build a relationship pre-acquisition as a consultant, you’ll get a lot less push back.
When you decide to pitch the business’s acquisition, bring up if they’ve thought about an exit strategy?
Then go over how selling to you would make them money and save them money, time, and headaches during their transition.
The only flaw that I see with these 4 areas is that they only cover the business side.
You still have to ask questions to make sure that the deal is a win-win.
The two books that will help you the most with that are Socratic Selling, and Never Split the Difference.
Here are a few questions that you could use in an M&A negotiation.
How can we structure this deal so that the workers that will be affected are happy?
Have you thought about an exit strategy?
What is most important to you when looking at a potential buyer of your business?
Source:
https://www.acquirescaleandexit.com/the-4-key-drivers-of-business-decisions/
Hopefully, you enjoyed that Free JV Master Class, and you ought to share it with a friend if you found value in it.
Post Of The Week
🚀We put a man on the moon 53 years ago!
And luckily for you, closing M&A deals isn't rocket science, and it can be systemized!
ASE has a dedicated professional for each bullet point in our assembly line.
And in all honesty, having your own financial ducks in order is one of the fastest ways to leverage other people's money (OPM).
To that respect, ASE also has The Become Lender-Ready Program and a complimentary Financial Education Platform.
Our Deal Assembly Line is only a tiny part of our Become Your Own Private Equity Firm Consulting Kit.
If you're making more than $500k a year in sales and want to take your business to the moon DM me, and buckle your seat belt for take off!
.
Now here is some clarification on a few of the points in our infographic.
The Debt Coverage Service Ratio (DSCR) is how many times per month a company's net profit can pay for the debt service used to acquire the company after an M&A transaction is closed.
Integration is the final phase of the M&A lifecycle, where you optimize the company with systems, marketing, and by rallying the troops.
The Entrepreneurial Operating System (EOS) is an operating system for businesses that has proven to get companies higher multiples upon exit over and over.
Profits First is a model that flips the profit equation into Sales - Profit = Expenses.
Hopefully, this post connected some dots for you whether or not you work with us.
And tag us in a social media post if you implement any of this and get results; we love seeing others win!
Here is our deal criteria, resources, vetted buyers list, capital sources, and companies for sale in case you need help with anything:
You ought to bookmark this link; it's a live Rolodex.
And it's best viewed on PC for a clickable table of contents on the left.
Deals Of The Week
Here are all of our off-market companies for sale and a list of vetted business buyers:
https://docs.google.com/document/d/1wU2ZctV_KZnNDPpS_NNpLNp2nhNMLxOn5YbVZIwlyQU/edit?usp=sharing
Best viewed on PC for a clickable table of contents on the left.
And bookmark the link. It's a live Rolodex!
A friend is searching for multifamily units/portfolios with 60 doors on the US mainland.
Financial Architecting Tip Of The Week
The ASE Fleet's Financial Architecting Tool #6
Merchant Cash Advance (MCA)
"A merchant cash advance, also called an MCA, provides alternative financing to a traditional small-business loan. With an MCA, a company gives you an upfront sum of cash that you repay using a percentage of your debit and credit card sales, plus a fee.
Merchant cash advances are best for small businesses that need capital immediately to cover cash-flow shortages or short-term expenses. But this type of financing can carry annual percentage rates in the triple digits and create a difficult cycle of debt. Generally, you should consider all other small-business loan options before an MCA."
Source: NerdWallet.com (https://www.nerdwallet.com/.../smal.../merchant-cash-advance)
ASE has a short application for you to see if you qualify.
Deal Trophy Of The Week
Business Buyer Of The Week
Oldie but goodie. This buyer just asked us for even more deals!!!!!!
Our cash buyer is looking for Facebook Groups, YouTube channels, and profiles on Twitter, Instagram, tiktok, snapchat, telegram, blogs, podcasts, etc. Within the following niches:
Investment/trading - equities, options, forex, crypto, etc.
Angel investor, fundraising, etc.
Credit repair/restoration
Tax Debt, IRS resolutions, etc