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:
- The document needs to be comprehensive, professional and formal.
- Persuasion and convincing points are the key elements and should be given proper focus.
- The feasibility, practicality and success probability of the joint venture should be clearly stated.
- It should be kept in mind that the financial details, including the financial benefits, are usually the most important details, as chances of higher profits would woo the potential partner.
- The positive forecasted figures and future trends often become the basis of a joint venture.
- The mutual, as well as individual benefits, should be clearly indicated.
- The cover page, usually the first thing that is glanced at, needs to be attractive with all the relevant details so that it would entice the reader to read the whole document as well.
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:
- Executive summary/introduction.
- Company profile.
- Joint venture idea in terms of sharing of a system, product, technology, etc.
- The probability of success.
- Relevant details, such as the purpose, duration (if any), costs, profits, other numbers/figures, etc.
- Feasibility analysis.
- Future trends and patterns.
- Individual and mutual benefits.
- Access to new markets, technologies, procedures, etc.
- Intangible benefits, such as improved goodwill.
- Persuasive statements.
- Terms and conditions.
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.
Sample Joint Venture Proposal Template
By:
P-Pharms Company
34210 Washington Ave.
Seattle, Washington
To:
William Johns
C-Candy Company
4432 New York City, NY
April 6, 2019
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.
Regards,
James Robert,
Executive Manager,
P-Pharms Company
Company Introduction
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.
Overview
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.
Purpose
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.
Scope
This venture could be very favorable for both the 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 is 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.
Capital Contribution
The capital contribution to PC Company will be made by both parties.
Amount of $1,000,000/- will be contributed by the P-Pharms Company.
Amount of $1,000,000/- will be contributed by the C-Candy Company.
Expenses
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.
Project Phases
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:
- Development Phase
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.
- Orange
- Bubble Gum
- Strawberry
- Grape
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.
- Execution Phase
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.
- Promotional Phase
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.
Allocations
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.
Terms of Agreement
- Legal teams of both companies will have a meeting and make a contract for this venture.
- This venture will contemplate 50-50 equal partnership.
- Both parties will make an initial financial contribution to the capital of PC Company. All the contributions will be properly documented.
- Direction and management of the PC Company will be in the hands of the board of directors of the company.
- We believe that certain reserved matters will require mutual consent of the parties at the board, so votes will be cast.
- All services will be completed under a Quality Agreement.
Dissolution
The PC Company project will dissolve as soon as any of the following happens:
- In case of a bankruptcy declaration.
- Mutual agreement of both companies.
Contact Us
You can contact us with any of the following ways:
Phone: 310-53183157
E-mail: [Email]
Website: [Website]
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