It's very difficult to compete in the outsourcing market as there are lots of
companies located offshore, in cheap location, where the labour is cheap.
Your advantage is if you can work with local clients, meet face to face
regularly, etc.

When you start Software development outsourcing keep in mind this topic: Some companies want to retain ownership of their application or source code. This is not always possible in outsourcing. In some instances, the cost of outsourcing is not as low as an enterprise wants it to be. There are companies that also have an in-house IT department, which can be tapped for developing projects like mobile apps. For them, there is no need to outsource. So when do companies should outsource? When a company’s software development needs might be uncomplicated and not so demanding, it can outsource the work. It might seem counter-intuitive to outsource smaller jobs, but it is also safer in the long run. When owning the source code won’t be a big deal, outsourcing development might be a good choice. An example of such a case is the creation of content-driven applications for various purposes, including international business marketing. There are many content platforms available, making source code ownership unnecessary. The same is true for simple mobile application initiatives.

Hi Jack, you may want to take a look at our blog Outsourcing to Freelancers and Consultants: Five Tips to Getting it Right and Lawful. Another that you may find helpful is the When Something's Got to Give Outsource Options for your Freelance Business. I hope these provide a good starting point for you!