How to Structure a JV Deal

The way to structure a joint venture (JV) deal is fairly simple. First of all, if it’s just a JV opportunity like you’re holding a tele-seminar together and agree to split the profits, then really what you want to do is have one person handle the money and then divvy it out through an account that you both have access to. That’s probably the way that I would do it. However in the planning stages get something in writing. You could have verbal emails going back and forth, just stating how everything’s going to work, so that just in case your joint venture doesn’t work out (not saying that it won’t), but you need to protect yourself and have proof of your agreement in writing.

Basically, if I’m planning on having a long-term business relationship with my JV partner I create a corporation with that individual. It may sound extreme but it’s not. This is what I do when I plan on making several deals with this person over a fairly long period of time.

What I do is we open a corporate bank account together. All the money from the merchant account goes into that bank account and then it gets divvied up from there. This is a good this to do because we have the corporation stating who owns what, so that way we make sure that everything’s getting taken care of properly and equally.

Now if you were going to do it what happens is whenever anybody purchases from you, your merchant account will send an email to both you and your JV partner at the same time to let you know that you’ve both got orders. Merchant accounts are excellent at tracking this type of information which makes it fairly simple when doing partnerships like these. However, it also can be taken care of at the shopping cart level. If you share access to a shopping cart, this can also track orders and notify you both of sales. So that’s another option as well.

But one major point I want to make very clear is to make sure that one thing you do when you are splitting the money is that you are taking out the merchant account fees. It will cost you about 3% on the way in for each transaction and 3% on the way out. So, if you have any refunds or anything like that, you want to make sure you take out that money on the way in and the same goes for the money on the way out. It’s really important for you to do that.

Either way,having a system to track orders is the best way to ensure a smooth business partnership where you can easily track what’s going on. This is the best way to keep a tab on your business.

Warmest regards,

Matt Bacak

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