I want to create new business model, even this business is not new, it is 100 billion business annually and growing rapidly, but my business model is a little different.
I am willing to create offshore software development company, due to lower development costs in third world countries I can help my clients to save up to 60% on their software development costs.
I have more than 10 years of experience in software development and have good developers team.
I want to keep my head office in UK, and legal representation in USA, Australia, Middle East and Asia. I am okay at technical side and looking for business development and marketing guys to join me. I want to keep it open for every person who want to join at 50% share basis without any investment.
If John do partnership with us, he brings a project of 50K and we save 30K after all expenses then we both will get 15K.
same as David becomes a partner and brings a project 200K and after successfully delivery if we save 120K then it is 60K for each.
As even hundreds person becomes partners with me every person will get 50% of his own projects. Member A' profit will not impact on member B.
I have good management tools for it to keep the process transparent and keep the track of expenses of each project individually.
But I am worry if there is some legal issue with this kind of business model and what are the other cons and pros?
I am looking for your kind advise.
Yes, there are many legal barriers to your proposed business model. First is diversion of funds. Who pays whom and how that money is redistributed and in what currency is a big issue for taxes among other things. Your equity share of the profit is completely unreasonable unless you are providing a lot of administrative services as well as assuming a significant portion of the liability. There are many issues around the ownership of the intellectual property that is changing hands, especially across borders. Depending on the country, there may also be issues around being classified as an illegal pyramid scheme, depending on the details of how your partnerships are structured.
There is a very large barrier to delivering a quality product, managing time zones, making sure requirements are clear, and supporting software products once they are completed, when using offshore programming resources.
There are very few barriers to companies seeking offshore programming assistance without going through your network, so you do not provide a unique savings benefits. You cannot link your potential success to the size of a crowded marketplace in software development. You're not solving a real problem. You are making yourself a middleman where none is needed, cutting profits and savings for everyone else. This fact will be transparent to anyone doing the slightest bit of shopping around.
I see very few pros, other than your hand in someone else's jar by putting yourself in the middle without doing real work. Now you may have left out what benefit you add to the proposition, but it's not otherwise obvious.
The real issues with offshore development that constantly need attention are different than what you propose to solve. Language barriers, team management, communication of concepts, delivery times, accuracy, efficiency, liability, maintenance, time zone differences, these are the issues people run into today, not finding a bank of developers to hire, which is all you offered.
Perhaps I've not understood what your business concept really is.
Hi Mr. Iqbal,
I think that you're suggestion is a bit too much far of the reality, like there's no person who would bring his/her own idea and seed projects plus the investment funds (no matter how much the cost is) to someone who just work on the development of the software and then gets only 50% of their own idea... like it doesn't make any sense. There are millions of software developers out there in the world looking for someone to higher them for such things, plus they just get paid of what they're working for. So acoocding to you; an example; if person A has idea or willing to start a project that requires 10K and you'll make it for 8K and if the projects gains 100K meaning that you'll get 50K just like that!!!... see, it doesn't addup.
bro. It will make more sense if you say I'll get 5 to 10% share of the same project than thinking of 50%. I suggest you to rethink about your opinion bro and hope you understand my simple opinion. Thanks
There is a catch here.If John gets a 200k business.He meets Joey who can do that work for 80k.John is happy keeping the rest 120k without sharing with anyone.
I have some connections that can help you, send me a message. As far as validation goes, this is possible and already being done, you just need the capital.