2 Questions

[richardgreen]

Hi All,

I am wondering whether anyone can help with the following 2 (very different) questions:

1. I currently work as a sole trader in the Recruitment industry. Our profit after taxes, expenses is around £70k. On this basis is it worth incorporating to a LTD company, and pay myself a wage each month and a dividend at the end of the year. Would the saving in tax be sufficient enough to warrant the hassle of running a LTD company?

2. Does anyone have any experience of outsourcing web developement to India? We are about to embark on a major web project, and we have been quoted high prices in the UK to have the site developed and felt that it would be best to outsource the project to India. Does anyone have any companies that they could reccommend or stay clear of?

Many thanks

Richard

[Belladonna]

Blimey Richard -

Those really are meaty questions!

I wouldn't even attempt to answer the LTD co one as the only person who should answer this is a qualified chartered accountant.

As for outsourcing to India - I have been in discussions with Indian companies myself and I have to say their level of expertise when it comes to coding is very good. However, my reservations have always been the fact that I like to deal with people face to face on behalf of my clients and I am not sure their interpretation of what we want would be right and to be honest, it's the whole big "trust" thing. In the same way that I would not pick up the phone and commission a company in London or Scotland from here in North Wales, as I want to look them in the eye before I hand over the project.

Difficult one to answer, but I guess it is a personal thing and maybe there are some people here who have used off-shoring successfully.

What I would want from any company is a site that is:

search engine friendly
Uses CSS for positioning
is W3C compliant
and is DDA compliant (particularly with you being in recruitment).

Hope that was of some help - if not - my apologies!

[DuaneJackson]

Hi All,
Does anyone have any experience of outsourcing web developement to India?

Tried it, regretted it. Since talking to others since that have had a good experience, i feel I regretted it for reasons that were my fault. You can't expect them to just get on with the job. You need to project manage it yourself to a very detailed level.

[Alpha]

Richard

Re status

Technically the answer is yes at £70k there could be sufficient tax advantage if the correct strategy is taken to become a limited liability company however,
the decision as to whether to be limited or not should be based on the commercial requirements of the business not purely on tax savings. In recent years we have seen an introduction of a 0% tax band for ltd co's followed by a realisation that this would lose a lot of tax revenue as anyone earning £15k profit per year suddenly incorporated and paid no tax therefore should dividends be issued a tax of 19% would be charged. This still means that tax can be saved at the moment but I would not expect this to last too much longer with an overhaul of the tax system being promised to 'ensure that the right amount of tax is paid'.

The possible figures would require an knowledge of your business circumstances which can be put together for you and an anlysis of savings can be produced if required.

Re outsourcing to India

I have a client who is a website design and marketing company.

His biggest client 'a large corporate' did look at outsourcing to India and trialled it on one of their websites.

The results were that although the cost was much lower and technically the programmers are as good as anyone here, they also found that they had problems because they needed much closer supplier/client contact to get over their ideas which did not happen, there is a time differential which means that key personnel that they needed to talk to were not available at convenient times and within six months they dropped the project as unworkable.

As a more jingoistic point of view, would you like it if your clients outsourced their recruitment to India because it is far cheaper? and do not say it cannot happen because there is always some bright spark who can put together a system to do it(whether it is workable or not in the long term is a different matter)

[webit]

Outsourcing: You have to be so tight on specs and measure of deliverables. QA of code usually returns good results but a company I worked for got burnt by offshoreing Lotus development and never tried again.

Cost should never be a key driver, thats where most people get it wrong.

[JoyDivision]

I am not sure the Indians would be well up on the EU accessibility laws.

Have you thought about getting computing students to do it? It shouldn't be anything a good 2nd or 3rd year student can't handle.

I got my old part time job this way, producing RNIB approved sites for the blind. I got paid £7.50 an hour which was a lot more than working for Tesco but a lot less than the market rates for the job.

There is also a moral issue here, some times not everything is about profit. My main objective of wanting to setup my own business is to offer employment and boost the local enconemy.

[webit]

If you start basing your product on cost, you always leave a gap where somone else can grab your customers. If you base it on service then it makes it much harder.

Or you can do what we did with webit.net and give at away for free from day one!

[JoyDivision]

If you start basing your product on cost, you always leave a gap where somone else can grab your customers. If you base it on service then it makes it much harder.

Or you can do what we did with webit.net and give at away for free from day one!

How do you make money then?

[directmarketingadvice]

Does anyone have any experience of outsourcing web developement to India?

Not web design but a programming re-write.

About 8 years ago, the company I worked for outsourced a fairly simple, but large programming task to an Indian company.

The 2 guys on our side who were the contact for the Indians used to get in each morning to 100+ emails. The time they spent answering these emails was less than the time it would have taken them to do the work themselves.

So, it was a false economy.

Things may be better now, but there's no way I'd be going to an Indian company for any IT.

Steve

[Rob Holmes]

We've tried it - frankly the money saved on programmers cost is switched into time spent having to micro-manage the project.

Rob

[webit]

Strange. Others have asked us the same question!

The Internet has a history of new markets being created that could not exist elsewhere. I'm thinking of Google, eBay, even Friends Renuited. Any collective of people has value, esp. when your in the possition of being the broker between their business dealings.

But as we've always said, what is free now will always be free and we mean it. This year and next is about growth.