What Is a Joint Venture Proposal?

Before we define what the proposal document is, we need to be familiarized with what a joint venture is all about. A joint venture is defined as a commercial partnership wherein two or more parties agree to combine their resources in order to complete a certain job. This assignment might be a new project or something else entirely. Shared ownership, shared returns and risks, and shared governance is all characteristics of this form of company setup. Business expansion, product development, and expansion into new markets, particularly internationally, are all common motivations for joining a joint venture. Despite the fact that the venture is its own separate entity, each of the members is liable for its earnings, losses, and expenditures.

A joint venture proposal is a business document that a particular company (whether it is already established or still a startup) prepares to send to another company in the hopes of forming a joint venture. Because the concept involves two distinct organizations collaborating, it may include aspects such as collaborating to develop a certain product or doing the entire business jointly. This proposal is a chance for the firm to advertise itself and persuade the other company of the benefits that the joint venture may provide. Additionally, this proposal can serve as a huge deciding factor in the planned joint venture deal between the companies involved.

What’s Inside a Joint Venture Proposal?

Here are the key components that should be written down when preparing a joint venture proposal to make this document effective:

Executive Summary. The executive summary portion is the first that is usually seen in nearly every type of proposal, not just this one. It is also one of the most important parts of the document. This part allows the readers or recipients of the joint venture proposal to immediately have an idea of the partnership that is to come and allows the company to discuss what makes entering the joint proposal with them an advantage over the competition. Alternatively, a company introduction can be used in place of this component, which discusses all the key details of the company that is submitting the proposal including the company name, the year in which it was formed, and what it does.Company Profile. After the executive summary is the company profile. This may also serve as the first key component of the joint venture proposal as an alternative to the executive summary section. A company profile is a comprehensive overview of a company’s mission and activities. This effectively sums up what clients know about the joint venture proposal’s submitting company. It’s an overview of the company, including what they offer or deliver, how they got started, their purpose, how they make or obtain their commodities and the reason why they serve their clients. The company profile should provide the receiving party with a compelling cause to enter into a joint venture with the other party.Joint Venture Ideas. This is the next key component of the joint venture proposal. What this part of the proposal essentially contains is the different types of ideas on what to do in case the joint venture is reached, such as research and development of new products and services, sharing a system that appeals to their customers and benefits them which subsequently expands their market reach, sharing products throughout the tenure of the joint venture, or sharing various types of technology that can be used in improving the way they manufacture or distribute their products or services.Probability of Success. Another key element to be kept in mind when preparing a joint venture proposal is the probability of the partnership succeeding. In its most simple definition, probability of success refers to a statistical tool that is used by different businesses to support their decision-making process. Information that is written in the executive summary/company profile may be used as a gauge by the receiving party to measure the chances of the joint venture being a complete success.Purpose. This next part of the joint venture proposal essentially discusses the purpose as to why the company is entering the joint venture proposal, which can be improving the development speed of new products or services, helping the other company’s clients, and so on.Scope. This is the next key component of the joint venture proposal and should explain the work that will be delivered as well as the joint venture project’s limits and limitations. The scope is also used to clarify the joint venture project’s most critical deliverables, which might include major milestones, top-level needs, assumptions, and any limits that may exist. In addition, this section of the joint venture proposal outlines the project’s constraints and specifies which deliverables are included and excluded from the scope.Feasibility Study. This key part of the joint venture is usually written after the scope section. A feasibility study examines all of the joint venture’s important aspects, including economic, technical, legal, and scheduling aspects, in order to determine the project’s chances of success. The joint venture project’s cost and return on investment, or if the project earned enough money or sales from customers, are some of the various parameters that might influence how practical the projects in a joint venture are. Individuals wanting to start a new business or firms planning to form a joint venture with another company should complete a feasibility study.Patterns and Trends. This can be another key part to include in the joint venture proposal. In their most basic definitions, a pattern is a set of facts that appears to recur in a predictable manner. It may be found in the asset’s history, as well as in other assets with comparable qualities. A trend, on the other hand, is a broad direction toward which something is evolving, developing, or deviating, as well as a pattern of steady change in a process, product, or situation. These are crucial variables to consider in a joint venture since they might determine how long the relationship will be successful.Benefits. This part of the joint venture proposal essentially lists down and discusses in great detail every type of benefit that the parties can have if they decide to push through with the joint venture. When both parties decide to form a joint venture, some of the benefits they can have include gaining entry into new markets and distribution networks, enhanced operational capacity, proper risk and cost-sharing with a partner company, access to more resources, such as specialized staff, technology, and finance, and greater operational flexibility.Intangible Benefits. The gains that are attributable to the improvement project during the joint venture that cannot be documented for any official reason are known as intangible benefits. These advantages are not included in financial calculations since they are neither monetary nor difficult to measure and assess, which is why they are called intangible. The intangible benefits of a joint venture might also rise or fall over time. Improved customer happiness, brand equity, and standard compliance are just a few examples of intangible advantages.Persuasive Statement. This section of the joint venture proposal is simply a statement that contains a suggestion based on a thorough investigation and analysis of data. The words stated here are written in a convincing manner rather than in a formal one, which is why this is called a persuasive statement. Persuasive comments are typically used to persuade or suggest the receiving party to join the joint endeavor. This generally entails suggesting a course of action, a strategy, or a judgment that is based on evidence and reasoning.Terms and Conditions. This part of the joint venture proposal refers to the rights and obligations of the parties involved in the proposal should they go through with it. In basic definitions, terms and conditions are important information that businesses include in their contracts, agreements, or proposals to guarantee that their customers’ rights are protected. They can protect the parties involved from legal liability or unfavorable repercussions if they are in place. Terms and conditions exist to educate parties about their rights while conducting business, and they also have legal ramifications that both parties need to be aware of.Signatures. Also called a signature block, this is the last key component of the joint venture proposal. Should the receiving party of the document be satisfied with the details that are written down in the proposal and decide to go through with the joint venture, this section of the document will include their signatures, important company details such as their name, and the date on which the signature was affixed. When the signatures are affixed, it signifies that the company agrees to enter a joint venture with the other firm.

How to Prepare a Joint Venture Proposal

As stated earlier, a joint venture proposal can make or break the chances of the parties involved pushing through with the deal, which is why it must be written thoroughly. With that being said, here are the steps to be followed in order to effectively prepare a joint venture proposal:

1. Perform a Research

This is the first step to be followed and usually takes place even before preparing the document. In this step, to establish whether or not a possible joint venture partner is a good fit, do thorough research on them. The proposal should demonstrate that the person reaching out is aware of who they are, has done their research, and has determined that they are the right fit. This not only proves the project’s appropriateness but also that the party reaching out is someone worth collaborating with.

2. Explain Intended Outcomes

After performing research on the other party and determining that they’re a good fit, it’s time to reach out to them. The first thing to do when reaching out is to explain the intended outcomes of the proposal. When describing the desired outcome and aims, describe them in terms of benefits. Explain not only what the initiative will accomplish, but what it will mean for their company. The target party should be able to see how the joint venture project will benefit them. It’s also worth mentioning how the joint venture initiative will benefit both parties.

3. Outline the Key Details

After providing an explanation of the intended outcomes of the joint venture project, it’s time to outline the key details. Some of the key details of the joint venture proposal include the scope and the objectives. When outlining the key details, as much as feasible, describe them in detail. At the very least, include a summary of the project’s objectives. Explain any details that have already been decided or are critical to the project in addition to the overall concept. Many things may be worked out later once they’ve agreed, but make a list of everything that’s essential to them so they can determine if the project is suitable for them.

4. Outline the Action Plans and Budget

The next step to be done after outlining the key details of the joint venture proposal is to outline the action plans and budget. In this step, provide thorough action plans and integrate them with the key individuals, as well as practices, in accordance with the joint venture’s common goal. As critical solutions to potential challenges on the joint venture project are considered, communicate effectively with each member. Also, include any required details regarding the joint venture’s expected budget.

5. Anticipate Questions

After providing the action plans and budget of the joint venture proposal, it’s time to proceed to this step, which also serves as the last one. In this step, Anticipate any questions the other party may have and respond to them in the proposal before they have a chance to ask them. This will save time and make deciding whether or not to participate easier for them. Take a moment to consider any possible concerns they may have and address them as well.


Is an exit strategy important when entering a joint venture?

Yes, it is. As the project goals are met throughout the joint venture, the business relationship then ends. In a joint venture, having an exit strategy is critical because it lays out a clear path for dissolving the joint venture, avoiding lengthy talks, costly legal fights, unfair tactics, bad consumer effects, and potential financial loss.

What is an example of a joint venture type?

An example of a type of joint venture is a project-based joint venture. Companies form this sort of joint venture to accomplish a specified job, such as the execution of a certain project or a specific service to be delivered together, to complete an assignment, and so on. Such collaboration is often performed between organizations for a single, specified goal, and as a result, it ends after the project is accomplished.

What is the difference between a joint venture and a consortium?

The fundamental distinction between a consortium and a joint venture is that a consortium is often thought of as a looser arrangement involving organizations that are still clearly distinct. The entities work together on a project—for example, construction firms constructing an office building—but have little influence over one another.

Whenever companies enter a joint venture, they are afforded access to the resources of the other company without the burden of having to spend exorbitant amounts of funds. Additionally, each company involved maintains its identity and can go back to its normal individual operations after the venture has been finished. Having a properly written proposal is key to the companies pushing through with the project, and in this article, there are plenty of examples that you can have a look at whenever you need help in creating this document.