BusinessWeek: Using a Joint Venture to Expand

Bloomberg BusinessWeek
By Monica Mehta

Small businesses can benefit from formal and informal partnerships. Both sides should be clear on the terms of the deal from the start

In an environment where capital is scarce, I urge small business owners to consider collaborating with other businesses to reach new customers or broaden their offerings without the cost of developing additional expertise or hiring more employees. Unlike a merger, a joint venture lets two companies maintain separate identities. They can enter into the partnership understanding that it may be short-lived and predicate the steps to unwind it. To give you a sense of how such arrangements work, I spoke recently with two entrepreneurs who described the nuances and offered their advice.

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