I often asked to foreign people how they do business especially in Software. We do know there are many types of business, in Indonesia we know three main business that categorized by government, those are :
Persekutuan : CV (Commanditer Vooschaf) / Firma
Perseroan Terbatas Terbuka (Stock) / Tertutup (Incorporated)
Being entrepreneur is a challenge since we face with bigger company which very mature in business process and have greater experience than rest of us. I trying to touch every opportunity and learning how business works in real life. Shifting from freelance to entrepreneur need significant changes that should be followed by heart.
One main problem is to get legalize by government and law which makes us have chance to grow up from little business. Individual business have many risks including liabilities that should be paid when the owner decided to close the business, but if we not had not legalizing the business, it would make the business stagnant. It wouldn't be grow.
Alternatives in doing business
I would not be specific in any form of business whether you are freelance or entrepreneur.
How many entrepreneur solve this problem? borrowing other company name. IMO, this should be last alternative to be chosen. Why? it also contain risks because we dealing with the unseen capital called Good Will. Commission Fee is must when borrowing a company because the company needs to pay the government's taxes and get some money to be stored to their capital. This condition is common. If you choose this method of business, please be careful in any way you act because you borrowing a company name that could have good credibility.
The second option is partnership, this is near same with above option. We would find small differences. The distinctive is both party have responsibility that should be discussed before any project is running. Why? We need to know our job scope. The profit will be divided in half or maybe 60% & 40% according to the agreement. We had time to discuss the best way to doing business together.
The third option is outsource. This new method in doing business, any cost that we spend would be reimburse by the company. It could paid in advance or after the expense had been occurred.
Software business is selling idea
Software business relatively risky because there no tangible product because we can't touch it. Computer Hardware business also had risk but we could see the product or the material that would be bought like your computer at home.
Software development needs human and robots still can't replace our work to solve new problem. We gain speed in replicating products, just by copying to another media, comparing to hardware. We could send the products by email or website. Software piracy occur because of the speed to copying or may I say it as Copy Cat. Protection become a valuable thing .
Often we're tailor developer and often doing custom development. We need to protect our idea (software) by paper and also by technical matter. Please ask the down payment before any project is occurring, when you starting a project is cost raised from thinking. Back to Back payment is dangerous to your business especially for freelance. Why? because most of us don't spare any backup saving when doing project at the first time. However, If you had resources and good saving, you could do so but remember to protect your source code by using obfuscator application if there's no compiler available for the programming language that you use.
Keep in mind that any source code / software there's not been paid is yours and you allowed to crippling the software. Don't forget to create contract even the project owner is your brother.
Good luck for you business