The golden question is how do you compete with outsourcing when India and other countries have such cheap labor costs. The answer is you avoid cheap gigs. If you consistantly bid on cheap gigs you are bound to attract cheap clients on a regular basis.

Your costs for web design should not be less than $30 an hour. Unfortunately you can find developers in China for $4 an hour. The benefit to you is that when a company that has the money decides to outsource instead, they usually get what they pay for and end up knocking on your door in the end.

Aim for those larger gigs that pay $2,000 or more for a 10 page static website or $5,000 minimum gigs for web development. By targeting such clients you can do less worrying about your operating costs and focus solely on your clients. You will also lessen demand for cheap developers as they show their true worth. You should avoid being the $5,000 expert with a $1,000 income.