Joint venture partnerships are an underutilized tool to rapidly grow your restaurant faster than it can grown by itself. It also helps to build brand strength and recognition while expanding your customer base.
What is joint venture? Joint venture is
a pooling of reputation, products, marketing efforts, services, or other resources between two or more companies to improve or grow companies more than they could on their own.
So let’s look at a couple of different possible joint venture partnerships. Many of your joint venture relationships will likely fall into several of these categories. Note: For ease of language I am going to discuss joint venture partnerships between two entities, however your joint venture partnerships can be with one or many more partners.
Joint Venture Marketing
Joint venture marketing is the most common form of partnership and plays into almost all of the other joint venture partnerships. It’s an agreement between both parties to market each other’s products or services. Joint venture companies typically market to similar clientele and by combining their efforts can reduce costs while expanding reach due to sharing the marketing expenses. You can use strategic joint venture partnerships to pull in market segments that are tangentially related to your product or service as well.
For instance, a restaurant serving healthy, low calorie, low additive foods can pair with a fitness club, wellness center, or yoga studio as their clients would likely enjoy healthier foods if they are interested in these services. Cooperatively, customers eating healthy food may be interested in joining a yoga group, working out, or improving their overall physical and mental health.
Alternatively, a BBQ Restaurant may look to pair their marketing efforts with a fireworks stand around the 4th of July, an area outdoor grill company, or a butcher shop. The fireworks stand and outdoor grill companies both pull in that Americana persona. The butcher company can be used to promote where you get your meat from and show your focus on local meats or small business. “When you want to enjoy our great BBQ ribs but can’t make it in, pull out your Hometown Grill and slap on a rack of Jason’s Meat Market ribs. We sell our delicious homemade sauces to-go for your home barbecue.”
You may want to partner with another business that also shares the same values and has a strong reputation. Combining your reputations into a joint venture partnership can help strengthen both brands and introduce long time followers of one brand to the products or services of the other. For instance, a golf course bar or restaurant could partner with an area investment firm or financial planner. Both of these likely target similar clientele while also sharing the prestige of both companies, assuming they are both well respected. Those supporting one company would be much more likely to support another if the company they trust gives a recommendation.
Cross Promotion of Services
Joint venture partners may wish to share their services. One common form is a restaurant that is close to a cinema or theater offering dinner and a show deals. Patrons that wish to eat dinner before their movie or show are encouraged to visit the nearby local restaurant and in doing so receive a discount on the combined price of the meal and ticket.
Best Business Practices
Joint venture partnerships do not always have to be public. You could have a partnership in which you share best business practices, standard business forms, ideas, hiring practices or more. There are several trade and industry groups out there to gain some knowledge and partnerships as well. While these groups aren’t necessarily a joint venture partnership in it’s truest from, they function much the same way. One word of caution, that should be obvious. Don’t not use these partnerships to decide on pricing or to artificially raise prices cooperatively. This is price fixing and illegal collusion and you can be fined or see prison time for it. Keeping it to best practices and problem solving and you’ll be fine.
One great way to form partnerships is through the creation or mutual sponsorship of an event. Find or create some sort of event that would appeal to both companies’ clientele while being mutually beneficial to both parties. For instance, you could plan a pub crawl where you have a special night where all of the bars in a given block have special features, rotating live music, or other festivities.
Appleton Downtown Incorporated does a mini golf outing every year in the area. Downtown bars each create a mini golf hole that they put up for the day. Prizes are given for the best score, best team name, best team costumes and more. This type of event brings business to your bar or restaurant and is beneficial to all involved.
You should have a better idea of what Joint venture partnerships are as well as several of the different types you can seek out. As we continue this month we will delve deeper into joint venture and tell you how to go about finding and contacting potential partners.