Sohail Khan is known as the world’s premier Joint Venture Expert. In the past few years alone, Sohail has generated millions of dollars in revenue for himself and his clients using various joint venture strategies. He speaks regularly to audiences around the world on the topics of guerilla marketing and joint ventures, and has consulted for dozens of corporate and educational organizations worldwide. Sohail is also the co-author of the #1 international bestselling book Guerilla Marketing and Joint Ventures with the late Jay Conrad Levinson, whom many refer to as “The Father of Guerilla Marketing.”
When it comes to creating joint ventures, Sohail definitely has an impressive track record, but that doesn’t mean that his journey as an entrepreneur has been an easy one. In 2008 when a large IT group that Sohail had sold a majority stake in his online training company to went bust, Sohail lost everything (including his 12 bedroom house and his Ferrari). But it didn’t take long for him to get back on his feet. The following year, he earned over $1.5 million using the same joint venture strategies that he teaches his students today.
During the dot-com boom in the late 90’s, Sohail was working independently as an Information Technology (IT) consultant in the UK. It was an exciting time to be in that industry, and the demand for his services was strong. But when the dot-com bubble started to burst in 2000, many people blamed internet marketing and IT consultants, leaving Sohail with a dwindling number of opportunities to pursue.
After the crash, Sohail switched gears and created an online computer training company. He remained the CEO of that company for several years until he sold a majority stake in the business to a larger IT group in 2006. During that time, he read a book called Getting Everything You Can Out Of All You’ve Got by Jay Abraham, which he says completely changed the way he thought about marketing. “That’s the book that changed my whole mindset about how marketing works”, says Sohail. “One of the things I read in the book that Jay spoke about strongly was strategic alliances and joint ventures.”
There were many valuable concepts shared in that book, but one that really stood out for Sohail was the idea that you could get other people to promote your product or service without paying them anything upfront, by offering them a percentage of sales revenue instead. Eager to put this concept into action as soon as possible, he decided to approach one of the largest IT recruitment firms in Europe at the time. “I literally sent them an email that said if I could increase your profits without increasing your expenses, would you be interested?” Sohail explains. “They got back to me and said of course we would.”
At the time, Sohail knew that there was a decline in the economy, so the number of job opportunities for IT professionals was slim. The recruitment firm made money by promoting jobs to their database of IT professionals via their newsletter, but since there were few jobs to promote, that revenue stream was suffering. When Sohail met with a group of managers at the firm’s headquarters in London, he proposed a joint venture. In exchange for promoting his computer training courses to their database of IT professionals, he would split the sales revenue with them. Everything would be tracked by an affiliate program, so Sohail would know which sales came from their promotion. Based on the size of their database and the conversion rate of his website, he was able to provide an accurate estimate of how much revenue their company would generate. Excited by the idea, they agreed to participate. “It was amazing”, says Sohail. “In our first year of business we did something like $80,000 or $90,000. In our second year, we did close to $400,000 with just one joint venture. And that really opened my eyes up. I thought wow, if we could increase revenue this much with one partner, how many partners would get us to a million dollars? … Basically, I was hooked.”
“There are more opportunities in a downward economy than in an upward economy to make money.”
When most people think of the term joint venture, they tend to think of it primarily in the context of internet marketing, where people swap promotions of each other’s products or programs to each other’s lists in exchange for a commission. But there are many other contexts in which a joint venture can be created. According to Sohail, joint ventures are simply collaborations between two or more companies who have complementary products or customers. Therefore, Sohail does not view companies who operate in the same industry as competitors. He views them as potential collaborators or partners.
As a Joint Venture Broker, Sohail looks for opportunities to bring competing companies together to form a partnership of some kind. He then helps to structure that partnership and oversee it, commanding a fee in the process. Participating in a joint venture can be very lucrative for everyone involved, because each player gets to leverage the other player’s resources for the greater benefit of everyone involved. “It’s about sharing complimentary skills, products, or resources to create a win-win-win situation”, says Sohail. “A win for company 1, a win for company 2, and a win for the customers.”
The first step to creating a joint venture is to identify who your ideal joint venture partners are. Start by researching other companies who offer products or services that are complementary to what you offer to your customers. Think about what your customers buy before they buy your product. Think about what they buy after they buy your product. “The idea is to team up with other people who can supply different products or services to your customers and vice versa”, says Sohail.
Once you’ve identified a potential joint venture partner, the next step is to figure out what they want. What’s in it for them? What objectives are they trying to meet? How will partnering with you help them to grow their business? According to Sohail, the best way to get someone’s attention is to offer them something of value. Figure out how you can add value to someone, and then approach them from that position of wanting to add value.
“It’s all about building connections”, Sohail explains. “I train Joint Venture Brokers and the first question they ask me when they come to my program is when can I make a million dollars? And I say it’s not about making a million dollars. It’s about your connections. You’ve got to spend your time building relationships and connections and in turn those will turn into money.”
When Sohail lost everything in 2008, he went from being a multi-millionaire living in a 12 bedroom house and driving a Ferrari to being totally broke. Fortunately by this point he had a knack for spotting opportunities in the marketplace and structuring lucrative joint venture deals. Determined to get back on his feet financially, he set a goal in 2009 to earn $1 million in 12 months using joint ventures.
“When you have that joint venture mindset, you see opportunities all the time.”
While reading a newspaper on a Sunday morning, Sohail spotted an ad for a book about learning to use a PC. “I saw this one page ad for a book called How To Learn The PC In 2 Hours”, says Sohail. “At the bottom of the book it said sold over 400,000 copies, so obviously they had over 400,000 customers who bought this book.” Sensing an opportunity, Sohail contacted the company that sold the book to ask if they had a video version of it. When they told him that they didn’t, he asked them if they would be interested in selling a video training course on the same topic to their customers. When they said yes, he told them that he had a video that could be used for that purpose and asked to schedule a meeting with them.
“The thing about a JV (joint venture) is it’s all about the distribution”, says Sohail. “People think that they’ve got to have a product first, but if you can get the distribution, that’s how you do a successful JV.” When Sohail showed up to the meeting, he didn’t have a video to show them, but they were still interested in the opportunity, so they gave him 5-7 days to come back with a video. If they liked the video, they agreed to promote it to the 400,000 customers who bought their book. Distribution was essentially secured, pending the approval of Sohail’s (yet to be created) video training course.
After that meeting, Sohail immediately began searching for someone who had a video that he could become a re-seller of, but he couldn’t find anyone who was willing to agree to the terms he required. Instead of finding someone who already had a video, he hired a freelancer to create one for him, based on the content in the book. When he met with that company for the second time, he showed them the video that he paid a freelancer to create, and they loved it. Actually, they loved it so much that they ended up extending the offer to their entire database of 4.2 million customers. Sohail negotiated a licensing deal whereby he was paid $7.50 for each unit sold, and the company handled all the production, packaging, and fulfillment. They were able to close that deal within 30 days, and when all was said and done, they sold over 200,000 units. Sohail earned over $1.5 million from that one deal.
Sohail has proven many times over that joint ventures are an excellent way to create lucrative opportunities in any industry, regardless of market conditions. But they key to implementing this strategy successfully will depend largely on your ability to connect with others and build mutually beneficial relationships. Unfortunately, very few people are taught how to establish and maintain professional relationships with others effectively. You’ll likely see examples of this the next time you attend a networking event or conference in your industry. It can often seem as though everyone in attendance is participating in some sort of competition to deliver their elevator pitch as many times as possible and collect as many business cards as possible. They leave the event feeling proud for having met so many people, but in reality very few, if any, of those connections ever become lasting relationships.
Over the years, Sohail has become a master at building relationships with influential and successful people in a variety of industries. But he didn’t develop this skill overnight. After many years of practice, Sohail has discovered what he considers to be one of the most effective ways to approach someone. Here is his advice:
This is a great technique becomes it gives the person you’re talking to the opportunity to tell you about themselves, and most people love talking to people who are interested in them.
After you’ve spent a few minutes learning about how someone got started in their industry, ask them what some of their current projects are. Find out what their specific goals are, and if there are any challenges they are presently facing. Your objective at this point is to try to find a way that you can help them.
If you meet someone who is not compatible in terms of business for you, or you don’t think that you will be able to help them yourself, ask permission to introduce them to someone else in your network that could. Most people are very appreciative of a warm introduction to someone that can help them accomplish their goals.
“You have to stand out from the crowd if you really want to be successful as an entrepreneur.”
Enter your name and email below to join our growing community of lifestyle entrepreneurs, and receive instant access to our Lifestyle Business Startup Checklist.