Joint Ventures and Strategic Partnerships have always been high on the agenda and form an integral part of any thought through construction marketing plan. Since 2007, when the recession started to take affect, JV’s have become an essential ingredient for survival.
Many Construction Company bosses have side-stepped the idea of a JV for fear of losing their company identity. Activities of the contractor and client organisations can become almost seamless where connected and distinctions easily blurred. JV’s can be expressed in a variety of settings.
For instance, the contractor supplier relationship where sub contractors become virtually part of the contractor’s business and are treated as such.
Framework Agreements are a form of JV where the client guarantees the contractor work over a five year term having gone through a process of pre-qualification. This form of partnership is loose and normally of short term benefit.
Then there are Approved Lists where Local Government or Public Organisations approve a limited number of contractors for future tender opportunities. These are often worked on a strict rotation basis, and can also be frustrating when large numbers of contractors are included in the list.
The best form of JV is where two, or more, companies come together around a common interest offering complimentary services that are mutually beneficial. This form of connection is good for business, because clients these days are looking for a one stop shop that offers a full range of solutions to their business project.
It’s worth spending quality time seeking out partnerships like this. They can be long term and highly beneficial to both parties. For instance, a sub contractor who specialises in mechanical works like plumbing, heating, ventilation and air conditioning, could offer a comprehensive service to a main building contractor if they were partnered with an electrical sub contractor. Most builders these days would prefer a complete M & E service.
There are ways of finding good partnerships that I deal with more comprehensively in my Masterclass 24 Video Course and accompanying Worksheets. In short, collaboration is now the preferred method of operation because both contractor and client benefit from the level of co-operation and trust that can be developed and this can genuinely support the development of each other’s interests.
Steve Flashman is a Marketing & Business Development Consultant in the Construction Industry. He is a writer and broadcaster and has produced a groundbreaking Masterclass Video Course for personal and staff training