Careers in Translation and Interpreting
Pricing Your Services Appropriately
In the present context of global competition and web auctioning of translation work, small business owners often hesitate to increase their prices for fear of negative consequences. Appropriate pricing is nevertheless an ongoing part of business management, and requires active steps.
Dear Business Smarts:
With everything getting more expensive all the time, I am wondering why my own income from translating and interpreting is not going up accordingly. Over the past year, my insurance, utility, and telephone bills have all increased, not to mention the price of gas. With all the expenses I have, I am beginning to wonder if this is still worth it.
Dear Worth It:
Although official inflation figures continue to be optimistically vague about higher living expenses, it is pretty obvious to any consumer that prices have risen considerably in the past few years. Do not forget, however, that every price increase is the result of a cost calculation and an active business decision. Since you are a businessperson yourself, you cannot expect the profits from your translation and interpreting work to rise automatically: you need to take active steps to make it happen.
Start with a financial assessment of your situation over the last five years, based on tax returns, bank statements, invoice statistics, or any other information you have compiled. Look at your income situation and figure out whether you are covering your expenses with plenty to save for retirement and unexpected events. Then consult your old invoices to see how long your existing rates have been in place. If you feel your pricing is no longer adequate, determine how much more you could reasonably earn with an approximately equal workload.
This financial review may also help you evaluate the other side of the profit picture: how your money is currently being spent. Potential cost savings may come from negotiating a better insurance deal or from changing service providers for utilities, Internet, or telephone. Do not hesitate to shop around in order to maximize what your money can buy. As an example, with the increasing ease of e-mailing documents of all sorts, is it still necessary to have a separate fax line?
Next, carefully review your strengths and areas of specialization. Would it be worthwhile to specialize further in a certain field? Do you have particular clients who frequently send you certain document types that are your strength, such as contracts, patient letters, or patents? Think also about the most enjoyable projects you have done in the past 12 months, as well as jobs you wish you had never accepted. Lastly, make a list of the advantages you can offer in comparison with your competitors. These might include years of experience, special training, certifications, and in-depth knowledge of specific industries.
As a courtesy to your regular clients, give them plenty of notice before you actually implement a rate increase. Send a brief, friendly letter or e-mail in which you politely announce your new pricing structure, including an effective date. Thank your clients for their loyalty and continued business, and reiterate your areas of linguistic and subject-related expertise. Not every customer will be ready to make the jump to higher prices, and you may see a temporary drop in business volume as a consequence of taking this step. At the same time, openings in your calendar present an opportunity to attract new clients and accept more projects in your selected area of specialization. Since translation agencies are under a lot of price pressure from their corporate clients and may not be willing to accommodate your price increase, you might also consider exploring opportunities to work for direct clients, and concentrating your marketing efforts on a particular industry or area of specialty.
Reprinted from The ATA Chronicle: June 2007, p 38