super1 — 2011-04-14T16:35:45-04:00 — #1
Hello. It won't be located in Asian country, it would be in one of the cheaper EU countries with great work and business ethic, wages might be a little more than in Asia, but still very competitive. For instance you can hire good web designer for 800Eur/month (taxes included). Php developer up to 1000Eur/month.
The difference from staff leasing companies would be that people in need of employees would not be leasing them from me, instead they would be the owners of the company themselves. In other words I would help them with everything - setting up the company, hiring employees (trial periods to see if employee is good enough), managing the office and everything else.
For instance someone needs 2 full time magento developers. They let me know it, I find these developers and set up the company (its cheap to set up, main costs would be computer+software and monthly office rent). Thats it. The advantage for the customer is that he owns the company, instead of just leasing staff. So all the control in their hands.
My question is - where are the best places to look for people interested in something like that?
sagewing — 2011-04-14T18:44:02-04:00 — #2
That business is referred to as the establishment of offshore development centers, and it's fairly mature in India and China. My initial reaction is that if you are setting up a shop with 2 Magneto developers who are being paid 1500/month there isn't much room for you to profit - it's just too small a deal to be lucrative because if I'm only spending 30k a year on developers how much would I possibly pay for help setting it up? Also, those smaller deals are going to be harder to get because if I only want a handful of developers it's not worth setting up my own shop.
Now, if I'm supporting a product and I want a permanent development center with 9 developers, two managers, an administrator, 2 quality assurance people, and a designer than there is some opportunity for someone to make some money because I'm willing to spend some serious cash on the deal.
These things also vary widely from country to country. Having dealt with hundreds of offshore vendors in my career for many clients, I can tell you that each country has it's own challenges and reputation amongst the world. It may be politically incorrect in some eyes, but the marketplace tells us that people who want to do business in China are concerned about quality, people who want to do business in the Ukraine are worried about ethic, people who are interested in Thailand are concerned about infrastructure, etc.
So, depending on what country you are in you can sharpen your strategy accordingly.
super1 — 2011-04-14T21:05:53-04:00 — #3
Hi, thanks for thorough reply, I appreciate it. It would be in one of the Baltic countries. Well 2 developers is just an example, it may vary depending on what exactly customer needs. Actually I did not think about my personal earnings from this venture yet, I was thinking of doing my first project for free. In return I would expect my first customer to be my reference (If he is satisfied with my services I would use him as reference for my new clients). Do you think its good idea? Or do you think people would get suspicious if I offered this service for free (well not 100%, for the references)?
sagewing — 2011-04-14T21:09:04-04:00 — #4
Which country are you talking about, and why are you being secretive about it?
If I were hiring someone thousands of kilometers away to handle some very important business for me, I would want them to be professional and experienced - not free.
If you aren't thinking about your personal earnings, what are you thinking about? What is the business model?
super1 — 2011-04-14T21:20:36-04:00 — #5
My business model would be that I earn monthly salary as an office manager. Or might be fixed one time fee for the service (if for some reason the don't need my help running the office).
Yeah I thought that free service does not sound very professional and it may scare away. I have experience managing freelancers and running business in general so this venture would be (technically) pretty easy for me. The key is finding people interested in this, thats why I was contemplating free (or cheap) service idea for the first customer. As I assume references is pretty important in this field ( as you said you need someone professional and how do you know I am professional if I don't have references )
sagewing — 2011-04-14T21:45:25-04:00 — #6
I'm still a bit unclear about what your service would be. An office manager is not qualified to establish a development center for an offshore team, and managing freelancers isn't really the qualification a client would be looking for.
A consultant who will set up an offshore development must provide sills/services such as:
- local business registration, permits, and corporate entity formation
- legal representation for copyright/trademark protection, disclosure and non-compete
- commercial real estate/office procurement
- integration, communication, and change management
Managing freelancers is easy, and not very unique. But the ability to create a business as a satellite of a business in another country is a different story.
super1 — 2011-04-14T21:49:28-04:00 — #7
Thats exactly what I am going to offer (sorry if I mislead you, English is not my native tongue).
sagewing — 2011-04-14T21:53:23-04:00 — #8
Ahh, so what experience do you have with those things?
super1 — 2011-04-14T22:03:30-04:00 — #9
I have all the experience needed to set up a shop like that, I own 2 small business for myself. I also helped to set up over 20 businesses for other people (as a consultant, I write business plans and also help them during the whole business set up process). You make it sound like a big deal but like I said it would be pretty easy set up. The only thing is proving to somebody that I am capable of establishing offshore development center. And that would be references. And you can not get references until you set your first center up. How would I get my first client - there is the question. Can you advice where to look?
ted_s — 2011-04-15T01:43:43-04:00 — #10
While it may seem straight forward to you, to get that first client... or the second or third or thirty is going to require you to, as Sagewing put it, be able to articulate your offerings very, very well. If you can't do it here that's a problem (unless you're just trying to keep your business insights close to your hand, that's ok).
For example, if your English is less than perfect, you should consider targeting a location that speaks a language you know very well. One of the main benefits of having a middle man in outsourcing is to have a contact that understands you -- and not just the words you write down but their meaning and cultural references. If I say "that's hot" and your response is to ask me how a website could be above a normal temperature, you are not the person I want to be working with.
References are important but they are not an end all solution that you make them out to be and they certainly do not trump having a clear offering. You need both.
So, before you go seeking clients let's work on what you're going to offer them in services and what they would have to give you in costs. What makes you different than others? What markets will you target? How would you help my company grow and make more profit tomorrow?
sagewing — 2011-04-15T11:30:54-04:00 — #11
As someone who is in the same business that you are trying to get into, let me say this:
I think you need to sharpen your communications if you want to get business. This kind of client is very reliant upon trust - that's the theme of offshore development is that it's remote and the client will feel empowered and far away so they need a trusted resource.
You first mentioned your credentials like this: "I have experience managing freelancers and running business in general so this venture would be (technically) pretty easy for me."
Then you said: "I have all the experience needed to set up a shop like that, I own 2 small business for myself. I also helped to set up over 20 businesses for other people (as a consultant, I write business plans and also help them during the whole business set up process). You make it sound like a big deal but like I said it would be pretty easy set up. The only thing is proving to somebody that I am capable of establishing offshore development center."
But already you have lost my trust and I question your credentials. The reason is that if you truly owned two business and had set up over 20 businesses for others, written them business plans, etc. you would have a much clearer and coherent idea of what you are doing.
For example, a big part of any business plan is the definition of the service/product. Another big part is the definition of the market and your intended way of reaching that market. Someone who had written many business plans would not stumble so much in defining their business, until someone else posts a list of specifics and you say 'yea that's what I will do'. Someone who had written many business plans wouldn't go to an internet forum and say that maybe they'll do the first project for free, ask how to reach those people, etc.
At the very least, you would have SOME formal idea of what you are doing and how to reach clients.
Further, when someone asks an experience business person about their credentials, they will know how to answer even if they haven't actually done the service that they want to offer. They cite the experience that they DO have with specifics, they cite educational achievements, etc.
If you want someone thousands of miles away to pay you to represent them in business, you are going to have to increase your professionalism and be much, much clearer about who you are, what your experience is, where you are, etc.
super1 — 2011-04-16T11:16:10-04:00 — #12
Guys, you misunderstood something here. You are telling me how to present the whole thing and that I did not do it well, but I was not pitching here on the forum. If that was my sales pitch of course it would be called weak.
I was merely asking your advice on what are the best places to find people to pitch to. For instance should I directly contact software/IT companies? Should I go to international IT trade fairs? Or maybe most important thing is to create a website with business offer lined out and rank it in the first page of google for related term like "offshore development center"? I was asking merely that... Can someone give straight answer to that or not?
Ps: I also disagree with you Sagewing on one thing. A year ago I helped up to set up a restaurant for my relative. Before that I had not even much idea of how much turnover average restaurant makes per day. I had perfect business sense, but I had no idea specificly about restaurant business. It took me couple weeks of research and 3 month to get restaurant up and running. After that I set up 4 restaurants for my clients professionally. I did not get paid for the first one, but I started charging for my services after that (I showed my first restaurant to them and that was enough to persuade that I was capable of doing that).
So I disagree that "someone who has opened 20 businesses must know exactly how to open any niche business". It takes some research, and I am just at the very first step of that.
ted_s — 2011-04-16T13:58:20-04:00 — #13
Well this is a discussion forum so when people ask for help, the community responds with what it thinks is helpful... If we feel your offering is not going to fly, no amount of promotion will get you success. If that's not of interest to you, ok, but understand that's how an open dialogue will work -- we have to learn about you to help you.
Build a service offering, whether it's with a website, print materials, powerpoint presentations on past projects [likely all of the above] and go pitch.
The better you are connected to who you are pitching too, the better the results. If you have contacts who would be interested start with them.
IT and corporate tradeshows are going to be much more competitive and require a slicker presentation, a better spin & story.
You can build a site and promote it to people looking on google and elsewhere but again, that's much more competitive than finding businesses you have a connection too. If you get into the A vs B game you need to look very, very good which is hard when you're up against established players.
Cold Calling is a number game and the numbers are not in your favor -- if you get to that point you've got something else wrong.
sagewing — 2011-04-16T14:46:33-04:00 — #14
Ok, fair enough. So, my feedback will be revised like this:
1) Sitepoint.com seems a quite poor place to look for this kind of feedback unless you are looking to do very small deals (like the '2 magento developers' deal that you mentioned). This audience mostly consists of freelancers, professionals who work for larger companies, and very small shops - there are some larger players but they are few and far between. So, if you can define exactly who you are looking for it will be easier to reach them, but I doubt you'll find them here.
2) To my eye, your communication style, the level of question you ask, and writing still suggests that your experience is overstated.
3) Your request for a 'straight answer' to the question about how to find clients is reductionist. You need to create a much more complex question and expect a much more complex answer to get it right. I spent 10+ years becoming a consultant with an established reputation in the offshore world, and my phone is ringing quite a bit. But it's not just simple path that got me there.
4) Your restaurant example has the same problem as your other communication - it lacks detail. WHAT DID YOU DID when you 'set up a restaurant'? That could mean setting up an entity, creating a menu, leasing a location, any lots of other things. Very vague.
Unless you can provide some very clear information about WHAT YOU DO (exactly), and WHAT YOU HAVE DONE (exactly) and what you are hoping to do next, you can't really expect a 'straight answer'.
super1 — 2011-04-16T15:06:48-04:00 — #15
By the way forgot to ask. What would you expect to spend in this situation bellow? I know it all depends on country and many other things, but give me a rough ballpark of what would you expect pay for this service:
I would say add 15% on that, what would you say? So 30K for developers and 4.5K to me. Would that make any sense? Too much? Too little?
sagewing — 2011-04-16T15:09:38-04:00 — #16
I'm still not sure what I'm paying you for. Why would I be paying you monthly? So, it's WAY too much. Do I also have to pay a lawyer? accountant? What are you doing for your money?
For EUR1500/month I can get a php programmer locally, anyways.
super1 — 2011-04-16T15:37:08-04:00 — #17
Can you recommend any place that is more suitable for this kind of feedback?
sagewing — 2011-04-16T15:47:42-04:00 — #18
I can recommend some other places where you'll probably be told that your questions are vague and clumsy, but that sort of misses the point. It sounds like you need someone to help you devise a business plan.
super1 — 2011-04-16T15:51:25-04:00 — #19
As I already mentioned I am just doing my very first bits of research before even considering creating business plan.
I would appreciate that. PM if posting other resources may be against forum rules.
sagewing — 2011-04-16T15:54:32-04:00 — #20
I was being sarcastic, actually. My advise is to sharpen your question rather than shopping your question around looking for a quick answer.
I am pretty much an expert in exactly the business you want to get in to - establishment of offshore development centers so I think I understand this world well. Clear communications, sharp offerings and crystal clear descriptions of services are absolutely key in this field. I hope you'll take that into consideration!
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