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Business Plan for Indian Software Co.

Being an IT guy myself and having compatible cultural roots, I have often pondered upon setting up a "software sweat shop". A venture never materialized as I never seem to be able to get a grip on all the success variables. The formula, as it applies to my situation, is as below:

The main success factor is to have a handful of customers who have granted contracts - ideally small or big packages of recurring revenue. This gives a financial basis for starting the operation, a few reference customers who provide the basis for sales arguments and new customer acquisition.

The 2nd most significant factor is strong local management at the Indian operation. Some one technically competent, capable of understanding target customer mentality and loyal enough for hanging in at the job for the long-term is an ideal candidate.

The 3rd success factor is financial strength. India programmers for full-time hire cost Rs. 15,000 to Rs. 50,000 in Hyderabad, Bangalore and Pune depending on the skill level. It should be considered that these man-power costs can be borne for 9-12 months without ROI in the startup phase.

Finally, know-how has become more important than ever when customers in USA and EU select outsourcing partners. Previously brut-force programming work was outsourced, but now customers look for architectural competence, project management skills and professional responsivness. So it is now imperetive to maintain a focus on core-competences. So for example focusing on J2EE platform and doing just Java projects would be a good strategic orientation.