A joint venture proposal is a document prepared by a company to be presented to another company in an effort to form a joint venture. A joint venture is a separate company of two or more companies that do a combined business while retaining their individual original identities. It can range from working together to produce a specific product to do the complete business together. If the potential partner or the second company is interested in the proposal, it would accept it, and both companies can have access to the new markets, technologies, systems, and processes.
This proposal is an opportunity for the company to market itself and convince the other company about the benefits that can be realized out of the joint venture. This proposal is a critical document as it is a deciding factor of the deal. Therefore, it should be prepared with thoroughness and proper homework. Among the many considerations in the proposal preparation, some of them are listed here:
In addition to all these, the needs and requirements of the potential partner need to be at the core of proposal preparation and, therefore, the included details should base on that as well. However, there are few general details that are included in all the proposals, such as:
If the proposal gets rejected because the potential partner does not find it attractive enough, the time and effort of the company would get wasted. It may, then, seek another partner to form a joint venture with. However, it is a costly process.
Usually, a company uses an available template or prepares one to be customized for different potential partners. Even then, the financial numbers and forecasting along with the feasibility analysis, require a lot of effort, time, and money.
34210 Washington Ave.
4432 New York City, NY
April 6, 20XX
Dear Mr. Johns,
Thank you very much for the meeting yesterday. We are extremely excited about this Joint Venture and looking forward to it. Our company has prepared this proposal for you, with all the details. We would like your company to share your ideas and suggestions with us.
Let us know if you have any reservations or queries.
P-Pharm is a pharmaceutical company established in 1980, in the United States of America. Our head office is in New York City. We are one of the leading companies in the healthcare industry. Our vision is to provide the best quality medication to our customers, which is safe and effective. Our products are both modern and traditional.
We would like to do a joint venture with your C Candy company. The main idea is to launch products that have the quality of both the company’s goods. We would like to have a new line of medicines for kids under ten, which are flavored with a variety of candy products. The name of the company will be PC Company.
The taste in children’s medicine is a big factor. They need that extra incentive of a familiar flavor to be tricked into taking their medicines. Tasty medicine makes the experience of being sick, less stressful and also helps the parents to get their kids to take them without any hassle. The main purpose is to help children with medication adherence.
This venture could be very favorable for both businesses; it will allow a broad exposure to this market. Our objective is to make medication attractive to kids. The shape, colors, texture, and taste are very important. We want to introduce medication as well as multivitamins in various candy flavors. The end product will be in jelly form, chewable tablet form, and liquid form.
The capital contribution to PC Company will be made by both parties.
An amount of $1,000,000/- will be contributed by the P-Pharms Company.
An amount of $1,000,000/- will be contributed by the C-Candy Company.
The P-Pharm Company will be responsible for all the expenses of the medical characteristic of the product, while C-Candy will be responsible for the flavoring and molding aspect of the product. All the expenses shall be reimbursed by the PC Company.
The idea is to develop a formulation and establish process steps to manufacture an oral administrative solution of the desired concentration for consumers. Following are the phases involved in this process:
Pre-formulation: Suitable formulation that allows flexibility to explore a wide range of oral medication for IND study.
Product Structure: Come up with the design, textures, and flavors of the products. Our suggestion is we start with 4 flavors.
The texture for medication would be jelly-like and in liquid form, whereas the multi-vitamins will be in chewable as well as jelly-like form.
Testing: Formulation for a clinical test. Get approval from the FDA.
Pricing: Decide on the pricing of the products.
Distribution: Manufacture for clinical supply and distribution. Decide about the packaging and cost. A team comprising of both companies will be in charge of the distribution of the products.
Creating a Launch Plan: Take all the necessary steps needed to make sure that the launch of the product is a success. Start building anticipation through advertisements.
Marketing: we will hold conferences throughout the country, give free samples and gifts to physicians and schools and conduct promotional trials.
Starting from the date of the acceptance of the proposal and signing the contract, the profits, expenses, and losses shall be allocated as follows, at the end of each fiscal year:
P-Pharm Company 50% share
C-Candy Company 50% share
Both companies should have complete authority and discretion in the control of the PC Company.
Both the parties should manage and control the affairs of the PC Company to the best of their abilities.
The PC Company project will dissolve as soon as any of the following happens: