Marc RagsdaleLean product launch by offshoring
Bio

I build and launch lean companies and products by offshoring and advise entrepreneurs and enterprises how to do it themselves. I am the founder and CEO of India-based Prospus in 2010 and have overseen the launch numerous products, sites, applications and projects since.



Recent Answers


I am an American and I own and directly manage an India-based development center since 2011. We have provided both on and offshore labor from India to American client companies, so have direct experience with what you are asking about.

This is a tricky arrangement, but one that can pay off in certain circumstances. With the current uncertainty around work visas, everything we knew before has to be reconsidered. That is the first challenge; understanding that new US government policies could negatively impact your business model. Aside from that, the obstacle is in finding the value and preserving that for your client to see. When all the costs settle, the outplacement model really only works well for the larger players who dominate this service sector. I'm not sure how many placements you have, but I think you'd need at least 25-50, growing at least 1-2 new placements per month, to see this as a profitable model. If you can't place this many, you may want to examine the costs and potential revenues again and stick with standard outsourcing. If your clients really want these services, you could also invest some of your funds into enhanced presence off-shoring techniques.

If you want to discuss this further, let's setup a 15 minute call to discuss.


At Prospus we daily interact with companies in the ideation phase, and are often hit with questions just like these. While we have gone on to help build and launch successful products that started as an idea, we have advised just as many individuals and companies to avoid a project.

I would say you have the start of something interesting, but you should spend a substantial amount of time researching potential competition. Who offers something similar? How is your idea different? This research will help you refine your idea and determine its real value.

You should also start identifying your target customer by building an ICP (Ideal Customer Profile). Then ask yourself a few questions: will your ideal customer spend time on this? What is their perceived ROI? What do they get out of it? You need to be able to answer all of this before you go too much further.

It's vital you invest your time where you get the greatest ROI. I'd be happy to get on a call and help you think through this strategically and determine if this is a worthwhile idea to pursue.


As the owner of an Indian-based web and mobile development firm that has recently been going through the sale process, as well as an American cloud-based company we sold, I know what information you are looking for.

It's great that you are planning ahead 3-4 years. That's a great start. The best way to maximize the valuation of your company during the sale is to generate recurring revenue leading to sustainable profits in the 20%+ range. You should examine ways to generate recurring revenue from your clients and not depend solely on their returning for a rebuild years after the initial engagement. Consider a support package, or some value-added services on a subscription basis such as SEO, technical support, server management, etc. If your firm doesn't have those skills, you should consider partnering with another firm who can offer them under your brand. I suggest finding an offshore firm with a long track record and a commitment to service quality whose services you can mark up an additional 50% or so and resell. These relationships become critical to the sale process as well, so it's important to get started early and find the right partner.

There are no default ways to value your company, though there are a few accepted valuation methods. It will be largely up to you, as the business seller, to make and negotiate your position and shop around for different buyers. What I can tell you for certain is that you will be in a weak position if you don't get recurring revenue in place. Even moderate recurring revenue can generate 2x returns on your valuation. You should have at least 2 years of solid growth in these revenue channels before you approach buyers.

If you want, we can schedule a quick 15-30 minute call to lay out a strategy for getting the right price for you business.

Best!
Marc


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