When times are tough you need your friends to help you through the crisis. This current recession has been tough on engineering companies. Potential clients have had a tendency to hold on to their money until the recovery begins. In today's markets that recovery is taking a lot longer then usual.
The numbers are down across all sectors of the economy, and the turn around, well at best is stagnant. Land development and the construction industry have seen a massive reduction in projects. If you are like most engineers in the private sector you have definitely filling the pinch.
Already for most engineering firms the time has come to start creating new products and services to market in non-traditional markets. These engineers are using a business agreement that has not always been used to its fullest potential in our profession. Joint Ventures or Alliances is nothing more than banding together with other like minds and technologies. Groups of engineers, architects, contractors, and others have begun to form formal groups to create new business opportunities.
Joint Ventures or Partnerships have been traditional used to propose on large government contracts. In fact, the government has encouraged smaller firms to band together. The federal government has termed this type of arrangement as partnering. Usually architectural and engineering firms have teamed together to propose on A/E contracts.
Due to the poor economic conditions, engineering firms are now finding new ways to joint venture with other types of companies to create new business opportunities. You can now find engineering companies partnering with manufactures to produce new products. Environmental engineering firms are partnering with construction companies to offer remediation and clean-up services.
So why is a Joint Venture an option in tough economic times? Well the truth is that Joint Ventures are a good option in any economic situation, and can be very lucrative for all of the members.
There are 8 main reasons for an engineering firm to Joint Venture with another firm:
1. Develop a new market - If your traditional client has been from the land development and construction industry, you may have found it extremely hard to find new projects over the past several years. If you have not already, you might need to start looking into other markets that want and need your services. Partnering with a company with a large client base outside of your market maybe a good idea at this time.
2. Develop a new product or service - You may want to kick start a new service, but you realize that you don't have all the technical expertise to fully develop the product or service. You may want to partner with a company to fill in the design gaps until it is ready to bring to the market.
3. Develop and share Technology - You might be able to find unused equipment and technologies in another company that they may be willing to share with you to assist in developing a new product or service.
4. Combine complementary Technology - You may find that the niche market you want to enter has a massive need beyond your firm's ability to fill. In this situation, you may want to partner with another firm to with similar capabilities to fill that need.
5. Pool Resources to develop a product or service - You may be able to find other technical companies who are willing to share their staff, equipment, or space to assist you in developing that new product or service.
6. Acquire capital - You may be able to find someone who has the necessary capitol to spend on your marketing efforts to launch that new product or service.
7. Execute government contract - Traditionally, engineering firms have joined forces with other companies to bid on government contracts. This trend will continue. If your firm has never been awarded a government contract, then you have only one choice partner with someone who has. After being a sub-contractor on 4 or 5 contracts then you can start bidding on your own. The government likes working with someone that knows their process.
8. Access a Distribution or Sales & Marketing capabilities - You may have a very small firm that just doesn't have the necessary marketing expertise, capabilities, or staff, but you have an excellent product or service that you know the market really wants right now. It might be a good idea to partner with a marketing firm to assist you in getting the word out to your targeted clients.
So, if you are looking for an opportunity to increase you company's ability to deliver a new service or product to the market, it might be a good idea to look for Joint Ventures opportunities to quickly gain leverage in those markets.
Thanks To : Civil Engineering Forum Best Selling Products Sterling Silver Jewelry by TSW Review Any Thing
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