by JITW » Thu May 03, 2012 4:55 pm
I had a side business for 3 years using Indonesian programmers banging out custom MS access and excel shit, got my first gigs from elance then by word of mouth. Made some good scratch, ended up selling the biz to an American-Chinese-Indonesian dude. To this day I still use freelancers in India, Romania and Indonesians for my businesses - but I have been steering most of my work to Filipinos lately with great results
You have to be good at project management, know enough about the work your local programmers are doing so you can track progress and set clear deadlines for them.
If you do this with the intention of traveling or living overseas I would suggest that you set up a Hong Kong corporation with a PayPal account to limit/eliminate your tax liabilities and increase the amount of business related deductions you can take
I wrote a book a while ago about how to make money while traveling or living overseas (that I ended up not doing anything with) that had a short chapter on this exact subject
Here it is for anyone interested:
CHAPTER 48: Become a Freelancing “Middleman”
In the last few sections, you've learned about the different ways to make money as a freelancer online. But what if you want to have total freedom from doing the actual work? What if you want to offer services that you don't have skills in (like programming or advanced web design)?
There's an easy solution to this problem. If you want to have all the benefits of doing freelancing online, without actually doing any of the work, then you can become a freelancing middleman.
As a freelancing middleman (or middlewoman), you'll do the work of getting the work and the jobs, and then you'll pass it on to other providers. You'll take a cut off the top and be the supervisor of the projects.
Using Local Labor
If you are living in a part of the world where the locals are pretty good with the English language and have some of the skills you are looking for, your work pool for your freelancing jobs is at your fingertips.
Working with local talent is one of the best ways to set this kind of business up. You'll have face to face contact with the people you are hiring and you'll have a positive impact on the community you are living in. In many of these countries, they can live very nicely on something people in the Western world would see as low pay.
Finding Subcontractors in Your Area
Before you actually go out and find the jobs, it's a good idea to find your labor first. Getting your subcontractors in place before you find the work will help you make sure that you won't have to do any of the work yourself.
Places like colleges and universities are some of the best places because the students generally speak good English and need the money. Every university in the world has a Computer Science department no matter how backwards and technically behind the country is. In Computer Science departments, you'll be able to find web programmers, web designers and graphic designers.
To find some subcontractors at the local college, just stop in and speak to a professor in the Computer Science department. Tell him that you are looking to hire some students for a short term project. Make it a point to give the professor a 10% cut of the project after the job is done.
You can also find subcontractors from your local contacts. Let the people that you know in the local area that you're looking for people with a certain skill set. It's important that you make friends wherever you are living anyway.
Once you've got a good list of prospects, it's pretty much like any other job interviews. Ask them about their experience and have them show you examples of their work. Go with the person who has the best work and seems to be the most reliable. After all, your reputation is at stake.
After you've accepted them as your provider and you start working on a project, you can set some ground rules. For example, when I do this, I usually let the subcontractor know to call me once a day and email me an update of what they have done so far. I also set a time frame of what I expect to have finished everyday.
How to Make Money As a Middleman
Making money this way is very easy once you get your subcontractors in place. For example, let's say you win a bid on a job for 2000 dollars and it takes around a week to finish. Then you then pay (lets say you used 2 locals) 200 dollars each (that’s the equivalent to a half a months salary for a computer programmer in places like India or Southeast Asia!). Then you just made 1600 for partially doing nothing!
You need to have a bit of technical know how if you are doing something highly technical but don’t worry, if you don’t just have someone back home check out the final product before you send it to the client. This way you can make sure someone isn't pulling the wool over your eyes.
If it is something really complicated like a custom made program or some sort of business market study I just shoot out an email to everyone that I know and ask them if they know anyone that specializes in whatever I am bidding on.
This way I can get it double checked before I deliver it to the buyer. If that doesn’t work then I put out a job on elance or guru.com for a technical review/quality control and pay them around 20% of what I bid.
~JITW