Find out how to identify a home-based B2B business opportunity where you will not have to compete against cheap offshore service providers.

In order for your home-based business to compete with "offshoring" shops in India, the Philippines, and even Africa and China, you need to understand why these offshore businesses have succeeded:

• Price is of course, the biggest advantage of low-wage labor. But offshore businesses couldn't compete on price if their offerings weren't good.

• Quality of service is no longer the rallying cry of outsourcers in the wealthy countries. Increasingly, offshore service providers are just as skilled as their counterparts in wealthier countries.

• Commodification of services is ultimately the reason why offshoring has taken hold. Many services that once required an individual touch, even creative services such as graphic design, are now treated as commodities. When something is a commodity, you have to compete on price if you are going to sell it. When North American and Filipino labor compete on price, it's not hard to predict which will win.

How Your Home-Based Business Can Compete with Offshoring

To find out how to compete, look at the fields where local outsource labor still has a commanding lead over offshore labor. For instance, businesses have outsourced their legal services, accounting, and human resources since before the word outsourcing was ever coined. Even though there are offshore shops in all these fields, local labor still dominates the market.

Those are all fields where, since results are so important, price is not as much of a concern. Instead, competition is based on the value added by the service provider. In this context, most businesspeople still perceive the locals to have the crucial advantages of cultural understanding and physical presence.

• Cultural understanding. Each culture has its own ways of resolving disputes, making requests, apologizing, celebrating, and doing the other basic social activities. In computer programming, data entry, and other technical and clerical fields, these soft skills matter little. To be successful, you have to seek out areas where these soft skills matter more. For instance, fields that involve navigating laws and government regulations (which include not just law but also heavily regulated fields such as accounting and human resources) also favor the cultural understanding of a local service provider. Laws, including the relative importance assigned to different laws, are ultimately cultural constructs.

• Physical presence. You can bet that haircuts, dental visits, cooking, and janitorial services will never be offshored. While more intellectual, paper-based services may not always require the provider to be physically present, physical presence can still be a must-have. In particular, any service that has a strong legal dimension will favor a service provider who can physically appear in a local court to testify as to his or her work should the need ever present itself. Besides, when it comes to something truly important, anyone will feel better knowing he can physically confront the service provider should something go wrong.

Offshore-Resistant Home-Based Businesses

Even if your home-based business is in a field with heavy competition from offshore providers, you can give your business a local edge. How? Expand your business to provide additional value-added services where a local presence provides a distinct advantage. What are some features your expanded business opportunity should have?

• Heavily regulated. OK, you may never be a lawyer. But if your new service is in a heavily regulated field, you will have a definite advantage.

• High-trust. Businesses may not outsource their "core competencies." But that does not mean they won't outsource essential functions that are not part of their core competency. Trust in the skills and ability of the outsource provider is very important in such a situation.

• Financial component. When it comes to money, business owners will always put greater faith in someone they can confront personally if something goes wrong. No one wants to be shooting their financial records to someone they will never meet in person.

• Low competition. You don't want to avoid offshore competition only to enter a field that is glutted by locals. Look for services that have traditionally not been outsourced but now can be outsourced thanks to new technological developments.

• Reasonable skill level. You can't become an attorney or accountant just because these fields are more resistant to offshoring. They require years of training and special certifications. Instead, look for fields in which you are already skilled, or that will not require any certification or additional higher education.

Business Fields to Explore

Admittedly, there aren't many fields that are heavily regulated, high trust, involve a financial component, and yet do not require some kind of specialized degree or certification. Those fields that meet that description tend to have tough competition. Your best bet is to look for emerging outsourcing trends within existing offshore-resistant fields such as law, human resources, and accounting.

One such emerging field is payroll. Though in many ways payroll is a subset of accounting, you don't have to be an accountant to handle the day-to-day details of a business's payroll if you are able to acquire the services of a knowledgeable professional back office staff or outsource. New, inexpensive software that runs over the internet means that anyone with the will to learn build the business can set up a lucrative, offshore-resistant payroll processing business from their own home, even without the technical knowledge normally associated with a prestigious profession.

Of course, just like earlier home-based business fields such as virtual assistance and data entry, payroll processing won't keep a low profile for long. In a few years, today's home-based payroll processing pioneers may well lock new competitors out of the market. But if you end up being a Johnny-come-lately to this or any other business opportunity, take heart. As long as you compete on your strengths, you'll always have an advantage over the competition.

About the Author:
Joel Walsh, a home-based business writer, recommends business service entrepreneurs check out this new patent-pending payroll processing outsourcing: http://www.payclerk.com