Construction Joint Venture

The Advantages of a Construction Joint Venture

Joint ventures are hot. In the business world today, a lot of people are beginning to see the advantages of joining a joint venture. If you are thinking about forming a joint venture, then you ought to think about construction. What are the advantages of construction joint ventures?

1) Spreading the risk – some contractors would not take on a big project because of the risk involved. By forming a construction joint venture, you can spread the risk around and concentrate on building the project. People in the construction business are terrified of taking risks as buildings mean really big risks. Although the profits in the construction business are huge, some contractors are just plain unwilling to bear the burden of that risk alone. A construction joint venture can make a contractor more comfortable with the idea and would convince the contractor to take on the project. Being a part of a construction joint venture would mean that you are taking some of the risk, but that risk sure is smaller than what you would have to carry if you are alone.

2) Expertise – different contractors have different areas of expertise. We all know that projects often need different components in order to be built correctly. BY combining the talents of two contractors in a construction joint venture, people would be able to make sure that every aspect of the building is covered. This means that the chances of finishing the project are raised. Remember the saying “two heads are better than one”? This is a good application of that adage.

3) Organization – there are various times when a contractor’s expertise is called upon in order to finish a project in a foreign country. Now, that contractor could choose to fly in the equipment that he will need as well as the men. However, that decision could prove to be more expensive than useful. What the contractor could do is form a construction joint venture with a local contractor and make use of that contractor’s already established organization to build things according to his or her expertise. Sometimes, things can be much simpler if we choose to share, right?

4) Politics – as many people know, there are a lot of politics involved in the construction business. By forming a construction joint venture with a local contractor with useful connections, a foreign contractor can get past all of the red tape quickly and get down to completing the project.

5) Freedom – unlike other forms of business, construction joint ventures give much more freedom to the people involved. As we all know, the completion of a project often depends on the degree of freedom which the contractors are given. By joining a construction joint venture, contractors can get past the usual corporate chit-chat and get down to the actual construction work. This means that the work is done faster, less effort and time is wasted, and more money is earned.

These are just some of the reason for forming a construction joint venture. To be sure, there are a lot more, but hey, aren’t these enough to convince you? Construction joint ventures are simple in terms of paperwork, organization, risks, and returns. Also, by engaging in a construction joint venture, you are given the chance to be a part of something a whole lot bigger than your self.