Freelance Finance: Separating Personal from Professional

Here at The Savvy Newcomer we understand that it can be intimidating to talk about money. It’s often a sticky subject, but we feel it’s the first order of business for small business owners. One major component of succeeding as a freelance translator or interpreter is managing your finances well. If you don’t master your money, your translation career won’t be profitable or sustainable. This series on money matters is intended to get right to the heart of some of our biggest questions about freelance finances; we won’t shy away from the tough questions and we invite you to dive into these topics along with us.

In this installment of the Freelance Finance series, we’ll discuss the topic of separating the personal aspects of your finances from the professional ones. This involves more than just having two bank accounts, but it doesn’t need to be complicated.

Why to separate personal from professional

Keeping your personal money separate from your professional money is similar to keeping your work life separate from your personal life; if you aren’t careful to set out clear boundaries and maintain them, one will start to creep into the other. It’s like how if you don’t plan ahead, you may end up taking work phone calls at 8:00 p.m. or taking a nap in the middle of the afternoon. It’s not easy to separate these two aspects of your life, but it’s worth it!

One clear and obvious reason to keep personal and professional finances separate is liability; if a client were to pursue legal action against you individually, are you confident that they would only be able to access your business-related funds and reputation, or would this bleed into your personal liability as well? If you were sued, having separate finances could be the difference between losing your life savings and losing a much smaller chunk of business capital.

Another rationale for keeping personal and professional finances separate is organization; it’s hard to know how much money your business is taking in (or spending) if you’ve got other non-business-related funds mixed in. If you wanted to get a mortgage and the bank asked you to prove your business income, would you be able to quickly and easily prepare a Profit and Loss statement, or would you have to muddle through the charges for coffee dates, charitable giving, and your latest vacation before finding the earnings you brought in for translation or interpreting work? It’s also helpful to have separate finances when you prepare your taxes each year, and depending on what type of business entity you set up (a corporation, for example) you may be legally required to keep money from your company separate from your own personal funds.

What to separate

What aspects of your finances should be separated between personal and professional? The first is your bank account. The quickest and easiest way to separate out which income and expenses are from your business versus personal money is to create two different accounts that will list them each separately for you. Each bank may have different guidelines to follow for business accounts (you may need to have an LLC, or use a particular name for the business account) as well as different fees and perks. The best way to find out what your bank can do for you is to set up a meeting to ask them about your options.

Other financial products can be separated between personal and financial also; for example, you could allocate certain expenses as business-related by paying for them on a separate business credit card. Lots of business cards come from the same companies that make your personal credit card but may have different perks and rewards systems; mine has a robust travel rewards system, which I love!

To separate your personal liability from professional, consider setting up an official entity based on the state or country in which you live. Limited Liability Companies, for instance, tend to be relatively easy and inexpensive to set up and require little ongoing maintenance in the form of tax filings and fees. Corporations, on the other hand, may require more time and money to set up at the outset but could offer further separation of liability and other tax benefits. Talk to an accountant or lawyer to determine the best option for your business.

How to separate your finances

It can be challenging to separate your personal and professional finances if you’re doing so for the first time. How do you know which home expenses are business-related versus personal if you have a home office but also live there? Is your phone primarily a business device or a personal one? These questions are best answered by a tax professional when it comes to claiming deductions, but from the perspective of where the funds should come from, ask yourself the following questions:

  1. Do you use the product or service primarily for business or personal use? (e.g., I use my home internet for business use 8 hours a day so I pay for it from my business credit card… and they happen to offer higher rewards for these expenses!)
  2. When you buy the service or product, will you benefit more from it personally or professionally? (e.g., I may use Adobe Acrobat software occasionally to open non-business PDFs, but the primary benefit is for my company so I pay for the service using my business bank account.)
  3. For what purpose did you initiate the purchase? (e.g., I bought a new computer because I wasn’t as productive at work using my old, slow laptop, so I purchased it using business funds.)

Sometimes it will be tricky to determine which expenses are for business and which are personal. For instance, when I went on a trip to the Dominican Republic, it wasn’t considered business travel since I was going to the beach and not visiting clients, but the wi-fi I paid for in order to have access to email at the hotel was a business expense. Similarly, food expenses while traveling or working may be either business expenses or personal ones. And when it comes to tax deductions, the tax codes change from time to time, so you’ll want to work with an accountant who is aware of the latest tax breaks you can claim.

Transferring between the two

At some point you’ll need to exchange money between your personal and professional finances; your personal money comes from the proceeds of your business, after all! Taking money out of your professional account to set aside as personal funds may involve a biweekly paycheck or bank transfer from your business account to your personal one, based on how much money you’ve earned and how much you need to keep in the business account. On the other hand, you may also want to contribute funds from your personal bank account to the professional one; this is especially true when you are getting started or when you wish to make a large purchase that may not be covered by the funds you keep in your business account. The rules governing these owner contributions and draws between personal and business accounts will vary depending on your business entity, bank, and location; ask a professional what best practices you should follow depending on your situation. One thing we can recommend to everyone is to always keep track! Whether it’s a spreadsheet or accounting software, make sure to record any income and expenditure of funds to and from each of your accounts so you can be sure you know where your money is and account for any questions that may arise.

Questions?

When in doubt about whether something is related to your personal or professional finances, always ask a professional. Tax professionals can tell you what is suitable for deductions, business expenses, and other tax-related issues based on where you live. Legal professionals can tell you what is suitable depending on the type of business entity you have formed.

Stay tuned for more finance topics! And as always, comment below if there are any topics you’d like to learn more about.

Translators and Interpreters: The True Influencers

In this article, I will define influencers as those who make change happen, who are catalysts of the developments they seek. In translation and interpreting, that is up to the professionals in the field. This is true of any other profession, since the professionals understand their field best. According to the authors of The General Theory of the Translation Company, we need a bit more debate to move forward as a profession.

The translation profession has advanced since the early days of Saint Jerome and Marco Polo, through the celebrated interpreters of the Nuremberg trials, and the legislative and certification accomplishments our colleagues have led us through in the United States since 1964. At this point, nurses assume healthcare interpreters will be certified, judges assume that interpreters are certified, and contracting officers expect translators to be certified or be able to demonstrate equivalent skills. We have shown that we are professionals.

What are the new challenges that lie ahead, as we work with clients in today’s world?

Due to the limited resources many companies have today, there is a new emphasis on leveraging all the skills employees bring, including their ability to write in languages other than English. That means that translation is not always outsourced to professional translators. We will be asked to review the text that is either translated or written directly in the non-English language by the employees. To be ready for this task, it helps to pick up some editing skills from our colleagues in editing associations such as the Editorial Freelancers Association (for English) or the Spanish Editors Association (for Spanish). Being able to discuss the text from an editor’s point of view will help us in our conversations with clients.

Bilingual employees review our translations for suitability because they are in contact with the public who will use our translations. We need to learn how to respect their point of view and accept some of their input while defending some of our choices.

As interpreters, now that our work is remote, we have different scenarios than we were used to. For example, when we were trying to connect with the Spanish speaker in an attorney-client interview, we realized that the attorney would not be able to dial that specific number. I was able to solve the communication problem by translating a quick email, translating the email with the response, and so on for a couple of hours, the same time I had reserved for the appointment in the first place. I became a transterpreter.

When we are asked to rush through a translation, we need to help our clients understand the risks involved. Can we translate in our sleep? If we ask for help, and we work with a team, then we have to spend some time unifying the text. Partial deliveries of a project can mean that we have to go back and send updated translations. The more our clients understand these issues, the more they support us. I usually tell my clients I will charge them extra for worse quality. They limit the amount of rush translation.

When we interpret on a remote platform, do we ask how we will communicate that it is time for us to say something? Can we turn our cameras on to get their attention when we need to? Do we get the information we need ahead of time to prepare for our interpreting assignments? Even having the material that the attorney will read out loud during the appointment is helpful so we can sight translate and follow along.

How do we prepare to shine tomorrow? Do we watch our health and stamina level and make sure we don’t overextend ourselves? We do very poor work when we are overly tired, and our clients are the first to notice.

How do we manage to keep track of it all? When I studied to be a teacher, my professors told me I could delegate everything that would not have my imprint. Could someone else format our text so we can use a CAT tool? Can someone else do our bookkeeping? Can someone else help us with our website? Can someone else troubleshoot that computer problem we are having? Would that free up our time for translation and interpreting so we can make more money on what we do well?

Do we spend time interacting with our clients so we can know them better? That will help us serve them better and help us be the ones to define our role. By doing that we will learn about interesting learning opportunities at SCORE, at the Chamber of Commerce, at the Oregon Medical Association and other places that might not give us continuing education credits but will make us much better at serving our clients.

Clients are looking for professionals who are certified in what they do, continually improve their craft, and advocate for their profession. That is what accountants, engineers, attorneys and other professionals do. They love it when we tell them, “Sorry, that day I am meeting with some government officials to discuss the profession.” We, the practitioners, define our profession. We move it forward. We, the professionals, go to the halls of government and tell them how we do our work. The future of the profession is in our hands.

Freelance Finance: Setting Rates

Here at The Savvy Newcomer we understand that it can be intimidating to talk about money. It’s often a sticky subject, but we feel it couldn’t be more important to address as small business owners. One major component of succeeding as a freelance translator or interpreter is managing your finances well. If you don’t master your money, your translation career won’t be profitable or sustainable. This series on money matters is intended to get right to the heart of some of our biggest questions about freelance finances; we won’t shy away from the tough questions and we invite you to dive into these topics along with us.

Rates. There, we said it! Any conversation about freelance finances would be remiss not to mention the R-word; one of the biggest questions burning in the mind of every aspiring translator or interpreter is “What should I charge for my services?” Let us start with a little secret: there’s no right or wrong answer to this question.

A variety of factors, from your living situation, to your geographic location, to your level of experience, to your specialization, should all play a role in determining your rates. A one-size-fits-all response to this question wouldn‘t be fair; that’s part of why it’s tough to get a straight answer from practicing translators and interpreters to this type of inquiry! Another reason practitioners are hesitant to share their rates is because when a group of competing service providers agrees to charge a certain rate for their services it’s considered price fixing, which results in an unfair profit to sellers and increased cost to buyers.

So how does a newcomer to this profession go about deciding what to charge?

  1. Look at your own data.

A one-size-fits-all approach to translation and interpreting pricing just doesn’t work. Here’s why: everyone is different! Some key personal metrics to consider as you seek to set prices for your work include:

– How fast you translate

– How fast you type

– What business expenses you need to cover (don’t forget taxes!)

– What languages you work in

– Where you live

– What type of services you offer

– What specializations/settings you work in

– How much experience you have as a translator or interpreter

– How many hours a week you’d like to work

– How much vacation time you want to take each year

– How much money you need to live on

This may seem like a lot of factors to take into account; consider taking some time to determine actual figures for the items above that apply to your situation. Anytime you can have a concrete number in mind instead of a range or a guess, you’ll not only be more likely to stay firm on those numbers, but you’ll also feel better about your prospects since you know exactly where your goals are set.

Besides, I have some great news: once you’ve established the numbers above, there’s an incredible tool that a team of volunteers from the Spanish Translators, Copyeditors, and Interpreters Association (ASETRAD) developed to help calculate what you actually need to charge in order to make your business profitable! Calpro is a spreadsheet designed to be adapted to the individual situation of each translator or interpreter. The U.S. version of the spreadsheet includes suggested numbers that may be adjusted for your needs and can be downloaded by clicking here.

  1. Look online.

Another place to look in your pursuit for answers is the resource of all resources: the internet. By visiting the websites of both freelancers and language services agencies you can see how translators and interpreters discuss rates publicly, and this will give you a better idea of what your conversations about rates should look like. Many industry stakeholders choose not to publish their rates, but some do list pricing online—especially if they feel this will offer a competitive advantage. Some agencies’ rates are public due to their involvement with government agencies or GSA schedule listing. When a translation agency makes their pricing public, remember that the rate they are charging their customer will not necessarily represent what the subcontractor or translator will be paid; the agency needs to pay an editor and possibly other subcontractors, may include a project management fee, and will of course keep a margin of the funds to pay their employees and cover overhead.

As you peruse information about translation and interpretation pricing online, you’ll notice that not everyone uses the same units of measurement to charge their clients. Some translators charge per hour, while others charge per word, character, page, or line, and yet others prefer a flat fee per project. Interpreters may charge by the day, half-day, hour, or even minute depending on the type of work. There’s no right way to charge your clients, but you’ll start to see patterns and will want to consider the pros and cons based on the types of clients you work for and your language pair.

When you start to find information on what some of your colleagues are charging, it’s important to remember that pricing can differ across language pairs and specializations. Data from the ATA Translation and Interpreting Services Survey[1] (based on information from 2014) and the ProZ.com average rate survey, for instance, suggests that certain language pairs command a higher rate than others, and specializing in certain areas may bring in better pricing. However, keep in mind that even if two translators use the same unit of measure, such as a per-word rate, their translation speed may differ greatly based on their specialization and level of experience, so they may wind up making the same amount of money per hour or per day. Also note the dates of any pricing you may see online, since rates can increase or decrease over time based on inflation, demand, and implementation of technology in the market.

  1. Look to clients.

If you’ve pursued the two sources of rate information above and are at a standstill on what to charge a translation or interpreting client, there’s always the option of asking the client what their budget is for your services. Some negotiators suggest that this may even result in higher rates than you would set for yourself, since many people tend to underestimate their value or aim low in setting prices. If you can get to the client’s bottom line right away, it could help to ensure that both you and the client are comfortable with the rate that’s agreed on. Be aware that clients may offer a rate lower than what you were expecting, however, and be prepared to negotiate or stay firm on your minimum rate. Since rates with language services agencies can be difficult to adjust, make sure you aren’t locking yourself into a rate you’re not happy with. It can be hard for agencies to increase your rates over time since they aim to make a certain margin off their own pricing and can’t always raise rates with their clients when you need to raise them with yours. Make sure that whatever price you agree on will comfortably allow you to work with the client at a rate that’s agreeable to both parties.

A word to the wise: be cautious about raising or lowering rates in unique circumstances (for example, during a pandemic). Lowering rates without giving a specific and justifiable reason why may set a precedent for offering the lower rate in the future. Raising your rates can cause your client to think you’re unhappy working with them at your current rate. As in many things, communication is key; talk to your clients, talk to your colleagues, and be honest with yourself about what rate will ensure your work is sustainable, profitable, and rewarding.

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Readers, have you found this information helpful as you set about establishing rates for your translation or interpreting services? Have we answered some of your questions and made the conversation about rates just a little bit less awkward?

We hope you’ll find these resources helpful and continue to engage with us about Freelance Finance. Leave a comment below on any topics you’d like to hear more about!

[1] The most recent report on the results of ATA’s compensation survey is available to ATA members by logging into the Members Only area of ATA’s webpage.

Pursuing the Translation Dream: Promoter of the Profession

 

Since we last visited ATA’s Self-Evaluation Questionnaire for Translators we hope you’ve had a chance to practice the items we discussed in section 4, “Professional Demeanor.” It can be a challenge to develop a professional mindset and apply it to all your business interactions, but we’re confident that you’ve done so skillfully.

Now that you’ve mastered what to know before the phone rings, what to know after the phone rings, how to keep the phone ringing, and developing a professional demeanor, we’re ready to move on to the fifth and final installment of this series on how to achieve a successful professional career in translation. Today we’ll explore the steps to becoming a “Promoter of the Profession,” not only to gain respect from your peers and colleagues, but also more appreciation for your career from your friends, family, and acquaintances. We hope this prompts you to become a more active proponent and spokesperson for the translation and interpreting professions in your everyday life.

In conversation, whenever appropriate, do I bring up the words “translation,” “translator,” and “interpreter” in order to further the public’s awareness of the profession and its significance?

Mentioning what you do is a signal that you like it and you’re proud of it. Anytime I meet people who don’t like to talk about their jobs outside their workplace, it’s a sure sign to me that they don’t enjoy what they do! Talking about translation and/or interpreting with your personal and professional networks sends a message that you’re invested in your career and enjoy it for reasons other than simply the financial gains it may bring.

When you do discuss translation and interpreting with friends and family, try to be aware of any misunderstandings they may have about your profession. You may be the only translator they know! Make sure to listen carefully to how they ask or talk about your job in order to gently correct any myths they may have adopted about this profession. (For example, friends may assume you translate in both directions, that you speak lots of different languages, or that you only work in hospital settings when they hear “I’m a translator.”) Try not to diminish what you do in an effort to be modest; if you’re genuinely proud of your job, don’t downplay it! Don’t be afraid of admitting you’re fluent in another language and that you earn a good living doing what you do. It can be tempting to modulate your conversations with false humility, saying you’re “just” a translator or even choosing to refer to yourself as a “freelancer” instead of a “small business owner.” These small changes in the way we talk about our work can make a big difference in how people perceive us.

Would I consider doing outreach work for the profession by talking to high schools, participating in college career days, submitting articles about the translation field to general interest publications, writing letters to the editor, speaking at business community networking meetings, or informing new translators about professional associations and conferences, etc.?

One very meaningful way to promote the translation and interpreting professions is by talking to future generations about the importance of the work we do. ATA has an entire School Outreach team to encourage linguists to do this very activity! Teaching others about the work of translators and interpreters is a great way to both inform the public about the professions and also learn more about it yourself. By researching and preparing for these events and publications you may learn things you didn’t know and make connections you wouldn’t otherwise have made. Promoting the profession through outreach can be as simple as visiting your child’s classroom on Career Day or writing a letter to the editor of your local newspaper to share an interesting update about your profession. Whatever platform you may have to share information with others, consider it an opportunity to broadcast the fact that translators and interpreters play a crucial role in many of the everyday products and processes we take for granted.

Here’s a challenge for you: next time you are given a platform to share information with a group of people, try to mention your work in the fields of translation and interpreting. Slip in the fact that you speak multiple languages. See how many people come up to you later and want to know more! Perhaps this will even present more opportunities to share with a broader network of people or allow you to make connections that could benefit your business.

Am I interested in serving as an active volunteer or officer of a professional translator or interpreter organization?

Volunteers power our organizations! To volunteer in a professional association means to contribute your time and effort without pay; it can be a thankless job but it has the potential to benefit all your fellow translators and interpreters, not to mention the generations of professionals who will come after you. Involvement in professional organizations can come in many forms; within ATA alone there are volunteers who coordinate the Mentoring Program, School Outreach Contest, divisions, committees, certification program, and much more. If you’re interested in getting involved but don’t know where to start, see this ATA Chronicle article for some ideas.

Contributing time and energy as a volunteer can send some very powerful messages about you as a promoter of the profession; it tells onlookers that you care about your profession. Dedicating time to furthering the mission of translators and interpreters shows that you are committed to this career. Joining forces with fellow professionals says you’re a team player and that you collaborate and cooperate well with others. What do your current volunteer activities say about you?

Do I continue to be alert to what it is I do not yet know?

Part of being an advocate for the translation and interpreting profession is realizing you’ll never know all there is to know about it. As a promoter of the profession, you’re constantly on the lookout for new developments and changes that impact your work, and you use these updates as an opportunity to broaden your horizons and spread the word about your profession to new outlets. This may take the form of attending conferences, following newsletters and blogs, or just staying in touch with fellow professionals.

Do I enjoy the translation business?

People who don’t like what they do prefer not to talk about work. But if you love your job as a translator or interpreter, you’ll be bursting to share what you do with everyone around you! Focus on the aspects of your job that you enjoy; make a list if you have to, and be sure to share these perks with the people around you as you promote the profession and, as a result, promote translation and interpreting professionals everywhere.

Thank you for joining us for this journey in pursuing the translation dream; we hope it’s landed you closer to achieving your goals and helped you find success!

Emails asking for translation or interpreting rates: Here’s how I respond

I often get requests for my rates from organizations that are trying to build a database of individual translation or interpreting service providers. An individual provider is a person who does their own work, also known as an interpreter or translator. Keep in mind that prime contractors (large language companies) can’t provide services without a sufficient number of subcontractors (individual translation and interpreting providers). We as the practitioners have a responsibility to steer this conversation.

The prime contractors often start with questions about rates, and their emails go something like this:

“I found your name on the website for Professional Association X. Are you interested in translating or interpreting for us?”

Note that there is no personalization. Nothing about your specific profile that stood out, nothing personal. They aren’t trying to build a business relationship with you; they just want data.

“If so, what rate do you charge by the [insert very small unit here]? Are you certified in [insert specific certification here]? Do you have any experience with [insert specific service]?

Sincerely, Person X”

At the end of these emails you’ll often see phone numbers listed in more than one city. So you know for sure that if you call, you won’t get Person X on the line! So how do I respond?

“Yes, I would be thrilled to translate and interpret for you! I charge by the [usual large unit, minimum number of units]. I am certified in [list all my certifications, not just the one they asked for]. I have experience in [providing specific service]. As a matter of fact, I have been doing that since [year], and my clients preschedule my services at the rates mentioned above.

For more information, please check me out at [LinkedIn, my website, etc.]”

This way, when someone contacts me back, I get to continue the conversation on my own terms. I make the next move and set the terms of the discussion. I own the story about my profession and get to answer the questions I wish they had asked instead of the ones they did ask.

Next time you get an impersonal client email that seems to be fishing only for numbers and data to add to a database, try this technique! Professionals set their own terms and set rates that work for them.