The biggest joint venture deal that I have ever done to date came by chance as Sohail Khan the ‘Joint Venture Expert’ a businessman based in Gloucestershire and Las Vegas. I was reading a copy of a national newspaper on a Sunday (like I normally do, full of great direct-response ads!) and came across a one- page full ad for a book called, ‘How To Use Your PC In Just 2 Hours’. What really interested me was reading that they had sold over 400,000 copies of this small book which got my joint venture mind thinking.

My good friend and online marketing guru, Mike Filsaime at MikeFilsaime.com, calls this ‘hyper-awareness’. When I was in New York visiting him, we had a conversation about how some people have 360-degree radar and can spot opportunities at every angle; most visionary entrepreneurs and JV experts have this amazing ability.

I ordered a copy of the book to have a look at it and also did some more research into the company which turned out to be a very large direct mail and catalog company for the ‘silver surfer or baby boomer’ market.

The Cheeky Business Proposal

Having received the book, I was excited to see the opportunities that this company was missing and contacted them with my proposal. I told them that I had purchased the book and asked whether they have a video training version of the book? ftey replied that they didn’t and I countered by saying that I had a video training course (which I actually didn’t at the time) that I thought they could sell to their existing customers who had purchased the original book.

Again, they asked me to submit a proposal to the Marketing Manager and I received an email from the Managing Director inviting me to a meeting to discuss the proposal further. Without giving away too much this was a very savvy company with an 8-figure turnover and only three employees—the Managing Director, the Financial Director and the Marketing Manager. Everything else was outsourced.

At the meeting, after discussing the joint venture proposal, I was asked to produce a copy of the video training course for them to evaluate. I had to make an excuse to cover myself and was told to get a copy over to them in the next 7 days. I left the meeting knowing that they wanted to do a deal but needed to see the actual product first.

The Beauty Of Outsourcing

Having no actual product to show them, I began trying to source the product from local manufacturers. I contacted a few and mentioned that I had clients that could sell a few thousand units of their video based training course and we just needed to be able to negotiate on the buying and selling price. Nearly ALL the companies I contacted didn’t understand the power of joint ventures and were stuck in their ‘one-size-fits-all’ mindset of a standard reseller discount which is the norm in their industry.

Having just 5 days left to produce a viable product for evaluation, I decided to shift from the manufacturers to outsourcing using www. elance.com, a website where freelancers bid for the projects you post. Hopeful this was the way forward, I posted a 5-day project for a video training course to be developed, based on the contents of the original computer book and people started bidding on the project. By day 5, I had a high-quality, tailored product created which cost me just $500 and for which I owned the rights. ftey title of the computer book was

‘How To Master Your Computer In Just Two Hours’, the video version was titled, ‘How To Master Your Computer In Just One Hour’.

The 7 Figure Joint Venture

Armed with a copy of the video course on DVD, I went to see the direct mail company for them to evaluate it. ftey loved it!

I had to convince them that it was in their best interest to promote the video course to their existing 400,000 customers first before we even considered creating more titles. Once we were on the same page, I began probing the Managing Director for some solid statistics, asking him how many people who had previously purchased the computer book would possibly purchase the video version.

Now, this company knew their statistics very well and the Managing Director mentioned that within the next 12-18 months at least 50% of the current customer base would upgrade to the video version of the computer book. OK, we now have a potential 200,000 units and just needed to lock down the percentage that I would put in my pocket.

My normal commission on joint venture deals is between 20% and 50%. In order to accept a smaller commission/royalty, I proposed a licensing arrangement where the company would do ALL the duplication, packaging and fulfillment and I would grant them a license to duplicate the product for an agreed commission to me of just $7.50 per unit sold. So, let’s recap: 200,000 units at $7.50 per unit sold is $1,500,000 for this joint venture deal. It actually took us close to 17 months to complete this deal and we did just over 201,462 units!

Sohail Khan is known as ‘The Joint Venture Expert’ a businessman based in Gloucestershire and Las Vegas.