Is this a good strategy?

I have a few friends who are looking to freelance programming in the summer. I have more jobs than I can handle right now, and I live in an area where most businesses don't have websites yet, so there is a big market and little competition. My strategy is to get jobs, pass the work on, and take a 50% commission. Do you think that his will work long term? Do you think that eventually I won't be able to outsource the work and will be stuck with more projects than I can handle?

Once you go the outsourcing way by becoming a middle man, the main challenge becomes finding new clients and signing new contracts. I'd say it is a great idea, try it short-term, but don't take more work than you and your friends can handle. You wouldn't take work if you were working alone, so apply the same strategy with outsourcing.

If it happens that you keep attracting new clients and don't want to turn down the business, expand your relationship with other trustworthy designers and programmers in your area to use as backup in case your immediate team and yourself can't handle the load.

Boy Wonder

Testing the waters over a summer is probably a reasonable strategy, but I'd emphasize the "testing" part here, for a number of reasons.

As many business guides will point out, hiring people is one of the fastest ways to increase your own income. However as the middleman (and, essentially, a service provider) you have obligations to both your client and the people you hire or--as I understand from what you posted--to whom you subcontract work. These include ensuring that the people you work with are sufficiently qualified: "I do good work. This person is my friend. Therefore s/he does good work." is not an appropriate assumption.

If you are treating your business as a real business, and you hire or agree to work with friends, you will almost certainly find the dynamics of your relationship will change. This not necessarily good nor bad but it is pretty-much inevitable.

Think about what you owe your clients and how you will present to them the idea that you've subcontracted work they asked you to do.

Think also about what you owe the people who do the work for you. Will you handle all client contact & administration? If I'm paying you a 50% commission, I'd probably expect you to handle everything except the work you expect me to do--so if I have questions, need special supplies, etc., I'd deal with you alone.

On the other hand you need to be very careful about how you structure the arrangement. If you can't make the case that your hirees are independent contractors you're subject to a different ranges of taxes and fines, if you're discovered.

And finally, if you're under 18, doublecheck with your parent or whomever has legal authority over your business. While I haven't looked up the statutes, my suspicion is that you are not legally able to hire people. If a problem arises--a disgruntled client, an enraged parent...you have a big fight with one of your friends over work or something else--it is the legal adult overseeing your business who will have to answer.

Sorry for the confusion, I am asking of it makes sense to quit doing the work myself, and just outsource the work for a commission.

I don't think becoming the middleman changes any of the issues I raised. And it could put even more pressure on you regarding quality control.

I'd also wonder why, if all you're doing is acting as a passthrough, you'd "deserve" a 50% commission. What value are you bringing here and is it worth that much?

If there's a lot of opportunity where you are, what would keep your commissionees from going after the work themselves? Asking for 75% of what you're billing they'd end up making more and the client would end up paying less and you'd then have trouble earning what you had been when you decide to get back into the work yourself.

I do think you could make this work, but you need to think carefully about all angles before you try it. And, as Artashes said, you need to think about The End--are you going to be willing to find new clients when the local market is saturated, or are you just going to stop providing work?

Just always be critical in outsourcing teams that you are working with. Seek professionals that serves client for years already. In this way, you can have the confidence that your work will be well performed. Outsourcing also minimizes your efforts but maximizes your work by these professionals.

outsourcing has many different types to it, the best type of those are distribution outsourcing, where you make an alliance with companies to complete you.