The path from a freelancer to an outsourcer. How?

Question

Freelance

Good day, colleagues.
Now I am freelancing (odesk, .net web and desktop) and I have come to the stage when the amount of work exceeds the physical capabilities of 1 person, so I need to think about what to do with it. I want to have in my head a clear development plan for the next N years. It is logical that you need to look for those to whom you could subcontract part of the work, what to do with one person or, in extreme cases, with two, it seems clear - outwardly for the customer it will look like the same freelancer, only the income level will most likely drop noticeably . Then I need to move forward, and here I have a kind of stupor, with an increase in the staff of the "studio" a project manager appears, in order to feed everyone, projects of medium complexity should no longer cost $ 1000-1000, but $ 5000-10000 for the same amount of functionality . How is this jump in the cost of projects made? On clothes, for example, I very rarely see such budgets. Old clients? It is doubtful they are accustomed to the old prices.
I managed to interrogate one owner of the studio, he works like this: an office is rented in one large American city and offline advertising is launched, while orders are made in a small Russian city in the back office. This scheme works, but is it really the only one? And there is no desire to contact the offices.
The final goal is to have a remote / not remote outsourcing studio of 4-5 employees. The question is, where to take orders in this case? I would be extremely happy if the owners of such offices tell me something.

Answer 1

you have very strange questions.
what is the difference between 2 hired people and 4, yes, no, the difference is already going to 15-20 when you just don’t have enough time to talk to everyone in a day.
So if you manage with 2, why are you afraid of 4?
It is very stupid to assume that he changed the country and everything ran there.
Here my neighbor has the country of Thailand and he works at 70 bucks an hour.
I have Russia and I work for 50, I can change for 80 if I want, your price tag depends on you, and not on whether you are in India or not.
Another acquaintance with the country of Malaysia, also works for 50 bucks, but at the same time he earns $ 16k a month, sometimes I look at his profile and admire, he also sometimes gives me work.
Apparently, you have been freelancing for several years and, let's say, you have reached some heights and a rating of 30 bucks per hour or 1000 rubles per hour for good measure.
Let's say you've hired 4 people at full time, you're the 5th and set a salary for them of 1000 bucks.
You are already smart and the price of the project for you is not taken from the ceiling, but consists of the number of hours multiplied by your rating of 1000 rubles per hour.
Let's say everything is going very badly for you, you have been looking for projects all month and always find only one for 5000 bucks, well, you are breaking into a cake, but at least you cannot find the second one.
What does it look like to you inside?
The project costs 5,000 bucks = 150,000 rubles, that is, you need 150 hours for it.
There are five of you and roughly speaking 150/5 = 50 hours for a brother, that is, approximately 6 working days.
As a result, you get a project at the beginning of the month,
work all five of you for one week and hand over the project on Sunday, then the five of you smoke bamboo for 23 days until the end of the month, you don’t have a second project, everything is bad with this as described above.
At the end of the month you have 5,000 cash bucks, 5 people, we give out a thousand bucks to everyone. in the bottom line, you kicked the bullshit for more than three weeks, anyway, everyone earned their money, they worked productively for one week, everyone is happy.
But here the dilemma is you want to earn more.
Let's assume the same situation that everything is bad for you and the same project.
We take 4 more people, but not full-time, but for a week, that is, a salary of a quarter of a month $ 250, suppose that everything is very bad and you had a wholesale discount for the time of employees for a month, we just raise salary by 20 percent just like that, we get $ 300
We work for a week project on Sunday.
We get 5000 cash bucks, we pay the salary of 4 employees 1200 bucks. We pay ourselves a salary of 3800 bucks, which is about 115 thousand rubles. Well, overall they did a good job.
Suppose that your business improved a little and you found the second project in a month, so this month your salary is already 230 thousand rubles, in general, the scheme does not require any scaling for 4 projects per month or 460 thousand rubles of salary, then you need more people, and there are already probably more problems.
This is what pure mathematics looks like.
It's perfectly valid for, say, 5 $1,000 projects instead of one $5,000 project.

Answer 2

When they start throwing work, the best way is to raise the price.
By the way, many customers on Odessa have a completely normal practice: to pay 5-10 dollars to programmers from India, 15-25 dollars to programmers from Russia and 50-60 dollars to programmers from the USA. Even if the complexity of the work is exactly the same in each case.
Here is the owner of the studio, whom you managed to interrogate, just pretended to be an American programmer. And it is completely logical and normal that he is paid several times more than others, because everyone thinks that he is from the USA, because he has an office and advertising there. And in Russia he pays much lower rates to local workers. At the same time, for these workers, the rates look quite decent by local standards. And he simply takes everything that is left after expenses.
I write like a normal small-time freelancer — I haven't been overwhelmed with work there yet. But I just read and analyze a lot of proposals. It is from here that I believe that this is how things are. By the way, I saw it very often - in plain text they write that they will pay a maximum of $ 20, but "if you are from the USA, then here is a link to a vacancy for those who are from the USA." You open the link, and there the prices are exactly twice as high with the same requirements.
In general, this is a very difficult moment when you start to take additional people in your pair / triplet / quartet. You already do a lot of work, and then organizational moments fall on you, and sometimes even sleepless nights, because your partner disappeared / got drunk / grandmother got sick, and the work needs to be done, because it is you who is responsible for the work done. It turns out that you spend even more time on work, but you no longer receive money. And it’s no longer “working 4 hours a day, and the rest of the time doing your own business,” which is what they dream about when they start freelancing.
It is best to save money, and then turn it around - invest in a startup; give it to a brokerage office (not play it yourself, but give it to them and let them spin with them and pay you the promised 100% per year); put in a bank at interest; create a content site, hire a mediocre copywriter there, invest in promotion and put ads there, which in the end will pay for everything, etc. - in general, all those things in which you need to take a minimal part. This is all risky, of course, but if you invest them in several different places, then there is a better chance that they will generate income, and not just burn out.

Answer 3

You have a very interesting question, I myself think about such thoughts (though in the future in 1-2 years).
It seems to me that it is worth trying first with 1 person to start, then two, and then already up to 4-5 to grow. And in the case of 4-5 people, you will completely cope with the position of sales manager + project manager yourself (although you will have to code less).
As for your familiar owner of the studio: a very good model, in my opinion. True, I don’t think that he really rents an office (it’s expensive and pointless in this case): it’s just that you need some kind of address to open a company, and in America they open companies to virtual addresses (that is, you pay a little money, the address yes, no office).
Regarding sharp jumps, it is better to do everything smoothly, both in terms of staff growth and cost growth. With the latter, everything is simpler: if the old customers, then you can justify the price increase by inflation, increased costs and the fact that there are more projects and new customers pay more. I did this, and quite successfully (increased the price by 30%). After all, for old customers, you are an old performer.

Answer 4

The fact is that 2 employees and let's say 5 employees is just a huge difference in risks. 2 workers can cancel at the same time and several projects taken will be killed and the accumulated reputation will disappear. This is very likely. And with five, it will most likely be possible to hire people at a critical moment. So there is a difference.

Answer 5

expand on Russian rates and grow a team, and then find a sales colleague in the states (something like a representative office) who will sell your team at American rates