Stronger Together: How Joint Ventures and Strategic Partnerships Can Help Small Businesses Win Bigger Projects
By: Owner & Attorney, Michael Jonas, JD, MBA
Small businesses often face a frustrating reality when pursuing larger contracts. A project might be a perfect fit in terms of skills or community impact, but the opportunity requires more capacity, experience, bonding, or financial backing than a single small firm can reasonably provide. This challenge shows up frequently in the construction industry, where project size, insurance requirements, and past performance thresholds can quickly eliminate smaller firms from consideration.
One solution that larger contractors have long used is the joint venture agreement. Increasingly, smaller companies are exploring how similar structures could allow them to compete more effectively by working together. One of our partner organizations, NAMC-Oregon, suggests this to some construction industry businesses who are looking to secure larger contracts but struggling to do so alone.
At Narwhal Law and Business Strategy, we often talk with contractors, consultants, and community-based businesses about ways to collaborate without losing their independence. Joint ventures are one of the most powerful tools available for this.
What Is a Joint Venture?
A joint venture is a formal collaboration between two or more companies that come together to pursue a specific project or opportunity. Instead of one company acting as the sole prime contractor, the participating businesses combine their resources, experience, and capabilities to perform the work together.
In construction, this might look like:
A smaller contractor partnering with another firm that has specialized equipment
Two minority-owned firms combining their past performance and workforce
A technical contractor teaming up with a project management firm
Companies sharing bonding capacity or financial strength to qualify for a larger job
The joint venture itself may operate through a simple contractual relationship or through a new entity created specifically for the project.
The key idea is that no single company has to carry the entire burden alone.
Why Joint Ventures Are Common in Construction
Construction projects often have structural barriers that smaller firms struggle to overcome independently. These may include:
Bonding requirements
Minimum revenue thresholds
Past performance requirements
Workforce capacity
Equipment or specialty trade capabilities
Large prime contractors frequently address these issues through joint ventures because it allows them to combine strengths across multiple organizations.
For smaller contractors, the same concept can create a pathway to larger opportunities while still maintaining ownership of their individual businesses.
What a Good Joint Venture Framework Typically Covers
A well-structured joint venture agreement does much more than say “we’ll work together.” It outlines how the collaboration will actually function.
Key provisions often include:
Roles and responsibilities: Who performs which parts of the work and who manages the project.
Profit and loss allocation: How revenue, costs, and risk are shared among the partners.
Decision-making authority: Who has authority over key project decisions and how disputes are resolved.
Project management structure: Which partner handles scheduling, subcontractors, reporting, and compliance.
Insurance and liability allocation: How risk is shared and how insurance coverage will apply.
Exit and contingency planning: What happens if a partner cannot complete their obligations or if the project changes.
For construction projects in particular, the agreement may also address licensing requirements, bonding arrangements, and compliance with public contracting rules.
Other Ways Companies Collaborate
Joint ventures are not the only way companies collaborate to pursue larger work. Depending on the situation, businesses may also consider:
Teaming agreements: A preliminary agreement between companies that intend to pursue a project together if the contract is awarded.
Prime and subcontractor structures: One company serves as the prime contractor while others participate as subcontractors.
Strategic alliances: Longer-term collaborations between firms that frequently pursue projects together.
Mentor-protégé arrangements: Programs that allow emerging businesses to partner with more experienced firms to build capacity.
Each structure has different legal, operational, and risk considerations. The right approach depends on the size of the project, the relationship between the companies, and the requirements of the contract or procurement process.
Building Capacity Through Collaboration
For many smaller firms, collaboration is not just about landing one project. It can also be a way to build experience, strengthen relationships, and gradually increase capacity over time.
A thoughtfully structured partnership can help businesses:
Expand their project portfolio
Build past performance credentials
Access new clients or markets
Strengthen workforce capacity
Share knowledge and operational expertise
Over time, those experiences can position firms to compete for larger work independently.
Why Structure Matters
While collaboration can open doors, it also introduces complexity. Without a clear legal framework, disagreements about roles, payments, liability, or project management can quickly create risk for everyone involved.
That is why it is important for companies entering into joint ventures or similar collaborations to invest in clear agreements that reflect how the partnership will actually operate in practice.
A well-drafted agreement helps protect all parties while creating a structure that supports successful project delivery.
Final Thoughts
Small businesses often assume that large projects are simply out of reach. In reality, many companies successfully access those opportunities through collaboration.
Joint ventures, teaming agreements, and strategic partnerships can allow smaller firms to pool their strengths, share risk, and compete for work that would otherwise be unattainable.
When structured thoughtfully, these collaborations can benefit not only the participating businesses, but also the broader communities they serve.
At Narwhal Law and Business Strategy, we regularly work with contractors, nonprofits, and mission-driven businesses to design collaboration frameworks that support sustainable partnerships and responsible growth.
Because sometimes the best way to move forward is not alone, but together.
