Setting a Fair Price: It’s All about You

This post originally appeared on The ATA Chronicle and it is republished with permission.

We are freelancers. We don’t need to maximize profits for invisible stockholders, who tend to only care about their dividends or capital gains and not a whit about language or what we do. For us, the definition of being rich is not to want for anything. We don’t define our wealth in terms of having more toys than the next person. Therein lies the secret to what I call breakeven pricing: making enough money for ourselves and not worrying about whether anyone else is making more or less.

A simple definition underlies what this article is about: the breakeven point is that price above which we are making a profit and below which we are losing money. In other words, the cost of delivering the product or service equals the money taken in for delivering it.

To price any product or service, one simply has to charge more than the breakeven point. How much more is completely irrelevant. This is because if we have calculated the breakeven point correctly, we don’t want any more; the profit is only a safety margin (accountants call it the “gross operating margin”).

In absolute terms, every transaction (whether a translation, an interpreting assignment, or even a piece of pottery at a craft fair) has its own unique breakeven point because the costs of each transaction differ over time, along with the countless variables that go into it. We could go nuts trying to calculate that. Fortunately, we don’t have to. Here are some simple steps to help you calculate your breakeven point.

Step 1: Add Up Everything You Want or Need—Everything

Do this for one year. Include what life is costing you now, but also everything you want for the future. Do this for yourself and your family. Involve your partner and family, and especially anyone who is or may soon be contributing to the family budget. After you make your personal budget list, it’s time to make one for your business. You really should develop a business plan so you know where you want to take your business, but that is the subject for another day. For this first time, just imagine what your business needs to run the way it should, especially if you know you need some items that you don’t have now. (See Figure 1 below for a sample itemized budget.)

Now, add it all up. This is not the time to worry about whether you can afford it or earn enough. This step is for dreams. After all, a plan is just a dream with a due date. You have to start with the dream.

Step 2: Figure Out How Much Time You Have to Make the Money in Step 1

Generally, there are about 2,000 working hours in a year. That assumes an eight-hour workday and a two-week vacation. Human resources experts use 2,000 to figure hourly wages in their heads. For example, $25/hour equals $50,000/year; the minimum wage is only $7.25/hour, which equals $14,500/year.

The problem is that you cannot work 2,000 hours in a year. There are holidays, and you get sick sometimes. As freelancers, we can take time off for more important things than our jobs, but we have to subtract those hours. As an example, a public sector job in Virginia would give you 11 holidays (88 hours) and 80-120 hours of sick leave. That would take 10% (200 hours) off your 2,000 hours right there.

Also, you cannot work on billable, paying jobs all of the time. You have to run your business: get the mail, deposit checks, attend conferences, meet with clients, travel, etc. It’s valid work time, but you cannot assign it to any one client, so it becomes a business expense that is not reimbursed. We call this overhead (or indirect costs). You make each client pay their fair share by taking those hours out of the equation so that your rate goes up enough to cover the overhead. If you’re doing one hour of indirect activity for every two hours of direct work (most businesses are not that efficient), you have an overhead of 33%. If you take a third off the 2,000 hours, or about 667 hours, you’re now down to about 1,133 available hours.

Step 3: Divide Step 1 by Step 2

This will give you the breakeven point, which is the amount of money you need to charge each hour. If Step 1 was $50,000, and the time available was 1,133 hours, you would need to charge at least $45/hour for your time. That is your breakeven point, which becomes your secret number. This means that you will always charge something above that number or walk away from the job.

Step 4: Set a Fair Price

This is where reality sets in. Now that you know how much you need to be making, you can do some serious planning to achieve it—or relax because you’re already charging enough (it happens).

The first thing to do is to get over the shock if you discover that your breakeven point is a bigger number than expected. Some of your dreams may be unrealistic, but you now have the power to look at them and to decide whether to put them in a plan for later or admit that you don’t really need/want them. After all, you don’t have those things now, so it’s not like giving up something.

Similarly, maybe you have more time to make money than you allowed in the first draft of your plan. You could plan to work on Saturdays (like the owner of a retail store) and add 400 hours to your calculation. This is the point where you start to make those adjustments.

Avoid the temptation to cut your holidays or eliminate sick days; leave them in the calculation. If you don’t get sick, or you find yourself alone on a holiday with a job to do, the extra time you put in will be banking cash that you will need someday.

Be conservative and prudent. Remember, these are estimates, not hard figures. When doing your calculations, round up to the next higher dollar, even if it’s only one cent over an even number (e.g., for $44.01/hour, think $45/hour).

There are many other considerations that you can bring into the mix now. For example, if you’re charging well below your breakeven point, you need a strategy for boosting your rate back into a profitable range. You can learn strategies for raising your rates by joining ATA’s Business Practices Yahoo group and going through the old message threads. Once you have your breakeven point, I think that some of the books and articles you read will make more sense. Any “business” advice you receive that causes you to charge less than your breakeven point is nonsense.

In the range that most language mediators work, it would be reasonable to charge about $5 above your breakeven point. So, for example, if my breakeven point were close to what I’m charging now, I might charge $5-10 over the breakeven and then come back in six months to review how well my initial data looks.

Step 5: Setting a Piece Rate

Most professionals charge by the hour, but translators, potters, bootblacks, painters, fruit pickers, and many others must charge by the item. This is known as a “piece rate.” For translators in the U.S., the piece rate is customarily cents per word; elsewhere, it might be per line, per character, or per page. Converting the hourly price that you have set is a matter of knowing how fast you can work. That requires keeping track of your time as you work. Once you know your average speed, your piece rate becomes your hourly rate divided by the number of words (lines, characters, pages, etc.) that you translate on average. For example, if your hourly rate is $50/hour, and you translate on average 500 words per hour, then you should be charging at least 10¢/word.

You can do this exercise using your breakeven point (your secret number) to obtain the per-word rate below which you should be turning down the job. For example, if your breakeven point is $40 per hour and you translate 500 words per hour, your breakeven piece rate is 8¢/word.

Final Step: Have Fun

There are many reasons you might want to take a job below your price range—maybe even below your breakeven point. When you work below your breakeven point, however, know it for what it is: a pro bono, in-kind contribution to a charity or a church, a personal favor, a hobby, or an avocation. You’re not in business under these circumstances, but that doesn’t mean that what you do has no value. Armed with the breakeven point, you can make sound economic decisions for business or personal reasons. In either case, I hope that you always enjoy what you do.

Author bio

Jonathan T. Hine Jr, Scriptor Services LLC

JT Hine translated his first book, a medical text, in 1962 and worked as a translator and escort interpreter through high school and a naval career. A graduate of the US Naval Academy (BS), the University of Oklahoma (MPA) and the University of Virginia (PhD), he is ATA-certified (I-E) and belongs to the National Capital Area Translators Association. He was the founding Secretary-Treasurer of the American Translation and Interpreting Studies Association.

When not writing his own books, he translates book-length fiction and non-fiction from Italian. More at https://jthine.com. Contact him at: jt@jthine.com

Savvy Diversification Series – Translator Training

The Savvy Newcomer team has been taking stock of the past year and finding that one key priority for many freelance translators and interpreters has been diversification. Offering multiple services in different sectors or to different clients can help steady us when storms come. Diversification can help us hedge against hard times.

We’ve invited a series of guest authors to write about the diversified service offerings that have helped their businesses to thrive, in the hopes of inspiring you to branch out into the new service offerings that may be right for you!

Why did I diversify into translator training?

When I was asked to write about my diversification into translator training, I had to take a step back and really think about how it all came about. The short answer is that it was not a conscious decision and ended up being a natural development of my career.

Before I became a translator, long ago, I studied and worked with international marketing. After moving to the US with small children, I understood that I needed a career change. When launching and growing my career as a freelance translator, I took advantage of the marketing skills I had learned during my studies and my previous marketing career. These skills provided me with useful tools and a strategic outlook on how to market my services.

How did I diversify into translator training?

I started attending the American Translators Association’s conference every year from the beginning as soon as I began my career as a translator. I did this to learn new skills and to network with colleagues and clients. After a few years, I was encouraged to submit a presentation and share my marketing skills, so I did. That led to several more presentations at translators’ conferences, with a lot of good feedback. I also took several courses held by other colleagues on building my freelance translation career and saw a niche in sharing my marketing skills.

After pondering this idea for a while and talking to colleagues, I decided to write a book. I chose a unique format for the book – the recipe format. The book is divided into starters for beginning translators, main dishes for more experienced translators, the building blocks of a successful translation career, and lastly, desserts, the little extras that you can choose from to enhance your business. Each recipe was a specific marketing strategy, or tactic for translators, with ingredients and step-by-step instructions. That is how the Marketing Cookbook for Translators was born.

The book was well-received. Many people started to ask for my help and advice in marketing their translation services. After a while, I decided to distill my experience as a translator, my marketing skills and background, the tips in the book, and the various presentations and workshops I gave into a marketing course for translators. I have given marketing courses and workshops for translators for more than five years and genuinely enjoy helping other translators to create a system to market their translation services based on their situation.

Around the same time I started writing the book, I began to listen to marketing podcasts. There were not many podcasts for translators at that time, especially not focused on marketing and business skills. I enjoyed bite-size tips in audio format and the convenience of listening to marketing tips while driving the car or walking the dog. I decided that I could try sharing marketing tips in a podcast format, and the idea for the Marketing Tips for Translators podcast was born. In the beginning, I set a goal of 100 episodes. Now I have published over 260 episodes and have no plans to stop any time soon. Even if it is a lot of work, I love interviewing colleagues and other experts, sharing new and old marketing tips.

The courses and the podcast have increased my motivation for the translation industry. I learn a lot from the interviews and my students, which provides a nice counterbalance to just doing translations. It brings variety to my working days. However, translation is still my primary source of income, and I hope it will remain so for a long time to come. The marketing courses and workshops bring in a nice additional income, but it is more of a passion project than a business. The podcast and courses motivate me to try the new marketing strategies I learn about myself, plus I must make an effort always to practice what I preach.

How do I find clients or students?

This might come as a surprise to some of you, but despite having a marketing background and sharing marketing tips to other translators, I wouldn’t say I like the selling part of marketing. Some say that selling is the end goal or marketing result, but I tend to focus on the marketing part and let the selling be a natural result. This means that I share my tips wherever I can and consciously try to find avenues to share my marketing training, podcast, and books.

I offer many tips and advice “for free” in the form of podcast episodes, an email newsletter, blog posts, checklists, and small guides. The people who find these resources useful and see results from them tend to be interested in taking it further, sometimes as a student in one of my courses. I also continue to share marketing tips in presentations and workshops at translation industry conferences, and as an invited speaker for different translator associations. Translators learn about my services through all these venues.

How has translator training helped my business?

The courses and paid workshops have added an extra buffer of income for my business. This was particularly helpful in 2020 when I lost a couple of direct clients due to the pandemic cut-downs, and the work from agencies slowed down dramatically during the first months of the pandemic.

But above all, the courses and workshops have kept me in touch with the marketing of my translation services and the translation industry, and have motivated me to learn new things. They have also provided an outlet for me to be more creative, satisfy my passion for helping people (I once thought of becoming a nurse), and give variety to my workdays.

Tips for other translators thinking of diversifying into training

If you have a skill that you have noticed has helped colleagues or friends, you could start teaching it to others. Look at things you have helped others with. Could your knowledge or skills be shared in the form of presentations, workshops, or a course? Do you have an “audience” interested in learning more from you about these things? Then you could diversify into training. I know many colleagues that I admire who share their specific knowledge this way. If you want to try it out, my best tip is to focus on a niche or target market that you know well, just like you do for your translation business.

I am optimistic about the future for freelance translators and believe that we will continue to be successful if we are open-minded and embrace change. This includes exploring options to diversify our businesses to have secure income streams in any situation.

Author bio

Tess Whitty is a certified English into Swedish translator, specializing in digital marketing and localization. With a degree in International Marketing and background as marketing manager, she also shares her marketing knowledge and translator experience with other freelance translators as an award-winning speaker, trainer, consultant, author, and podcaster. She is involved in several translator associations as a committee chair, language chair, trainer and mentor. For more information, or to connect, go to www.marketingtipsfortranslators.com, or www.swedishtranslationservices.com.

 

Small Talk Tips for Translators

This post originally appeared on The ATA Chronicle and it is republished with permission.

The old industry adage might be spot on: most interpreters are fairly extroverted, while most translators tend to be introverts. That’s an oversimplification and I know that there are always many exceptions, but during my years in the industry, I’ve noticed that translators struggle more with one important thing than interpreters do: small talk.

Do you hate small talk? If yes, read on. I know small talk can be painful, but you can make it easier on yourself by keeping a few things in mind.

Keep it short.

At networking events, no one wants to hear long, complicated stories. Be succinct and interesting, but resist the urge to tell your life story.

Work on your conversation starters.

The easiest way is to introduce yourself and say something simple along the lines of “I’m new to this event” or something similar. Experienced networkers will get the hint and will introduce you to others. Another good way to start a conversation is to ask questions: about the organization, about that particular event, and about the person to whom you’re speaking.

Learn to listen.

The best relationship builders are people who truly listen and who are not obsessing over what they can sell, but rather how they can help the other person. It’s a powerful thing to think long-term and big picture rather than short-term and project-based.

Don’t monopolize people.

Once you get comfortable talking to one person and your nerves settle down a bit, you might want to hang on to that person for dear life because it’s scary to start over with another person. However, remember that everyone is there to mix and mingle and that you are not the only person to whom they want to speak.

Brush up on current events (including sports).

Even if you don’t like baseball, you’d better have something to say if you’re at an event during the World Series. And while local politics might not be all that interesting (mostly), it would still be good to know that a big new company is investing $100 million in your state. You don’t have to know everything, but the bottom line is to be informed so you can participate in conversations.

Avoid certain topics.

It’s usually best to steer clear of politics, religion, and highly personal matters. Sure, there’s always an election around the corner, and it’s perfectly fine to have an opinion, but I prefer to talk about more neutral matters with people I don’t know or barely know.

Get the introductions out of the way.

It can be awkward when another person walks up when you’re already engaged in conversation and you don’t know the names of either the first or the second person. In my experience, it’s usually best to be honest and say “I’m sorry, we just met, would you mind telling me your name again so I can introduce you to ….” It’s horrifying to stand next to people all evening without knowing their names, so it’s good to get the introductions out of the way early. And it’s fine to admit you don’t remember the person’s name. Just ask again. Get a business card and try to remember one particular thing about the person to help you remember (e.g., her purse, his shirt, her cute earrings, his Boston accent).

Small talk is similar to translation in one way: it’s art, not science. And just like translation, it usually gets easier the more you do it. Happy small talking!

Author bio

Judy Jenner is a court-certified Spanish interpreter and a Spanish and German translator in Las Vegas, Nevada, where she runs Twin Translations with her twin sister. She is a past president of the Nevada Interpreters and Translators Association. She hosts the translation blog, Translation Times (www.translationtimes.blogspot.com). You can also find her at http://www.entrepreneuriallinguist.com. Contact: judy.jenner@twintranslations.com or judy.jenner@entrepreneuriallinguist.com.

ATA’s Back to Business Basics – Effective and Pitch-Perfect Marketing during and after COVID-19

Marketing is a task that even experienced translators and interpreters dread, and it can feel especially daunting during difficult times, like the current pandemic and financial crisis. Should you still be marketing your services to clients? And if so, how can you do that without coming off as salesy and opportunistic? What if your clients are in an industry that was hit hard by the crisis?

You will find answers to these and many other questions in ATA’s Back to Business Basics webinar “Effective and Pitch-Perfect Marketing during and after COVID-19.”

ATA launched its new Back to Business Basics webinar series in September 2020. These webinars focus on a small, practical piece of business advice for translators and interpreters at different stages of their careers. The series quickly became popular: there are usually a few hundred people attending each live session. Members can access these webinars free of charge, and non-members can purchase each recording for $25.

In this first webinar in the series, Madalena Sánchez Zampaulo, a freelance ATA-certified translator working from Spanish and Portuguese into English and ATA’s President-Elect, shared how to deliver pitch-perfect marketing during difficult times.

The first step is finding the right mindset: you need to understand what your ideal clients are going through, what their challenges are, what is coming, and how you can help. As with the stages of “new normal” during the pandemic, businesses will be experiencing different stages of reopening and adjustments and will have to reinvent themselves as the pandemic evolves. The key is to stay informed and be able to make projections on what your clients’ priorities will be and how you can support them.

In her presentation, Madalena showed examples of how some areas that have been hit the hardest (for example, travel and hospitality, education, immigration) are adapting, and how some translators and interpreters have successfully responded to the needs of their clients.

Madalena demonstrated how checking in with clients and offering to help can be done in a tactful and non-obtrusive way. She also gave some ideas on reaching out to both current and new clients during difficult times.

When so many people have been affected by the global pandemic and economic crisis, it may feel that marketing your translation or interpreting services is not a priority. But it is important to continue growing your business, and you can (and should) continue marketing. You may just need to adjust your approach, and this webinar will give you some great strategies on how to do that.

Check out the recording of this webinar and share it with colleagues who may be interested!

Author bio

Veronika Demichelis, CT is an ATA-certified English>Russian translator. She is chair of ATA’s Professional Development Committee, member of ATA’s Membership Committee, blog editor for ATA’s Slavic Languages Division, and co-host of the Smart Habits for Translators podcast.

ATA’s Back to Business Basics – Diversification: A Tool for Thriving in Uncertain Times

ATA launched its new Back to Business Basics webinar series in September 2020. These webinars focus on a small, practical piece of business advice for translators and interpreters at different stages of their careers. The series quickly became popular: there are usually a few hundred people attending each live session. Members can access these webinars free of charge, and non-members can purchase each recording for $25.

Diversification: A Tool for Thriving in Uncertain Times was the second webinar in the Back to Business Basics series. The live event was streamed on October 5, 2020, and a recording is available in ATA’s on-demand webinar library. The webinar was given by Corinne McKay, a French to English translator and interpreter, seasoned trainer, and past ATA President. Corinne explained what diversification may look like for language professionals, shared a few reasons to diversify your business, and provided tips on how to do that.

Diversification refers to having more than one revenue stream, such as more than one type of client or service. By diversifying their businesses, language professionals can spread out their risks and avoid becoming dependent on their one or two top clients. In other words, diversifying gives you the freedom to focus on the profitable part of your services.

Corinne shared a few ways of diversifying your business. She stressed that it is okay to have multiple specializations as long as you don’t stretch yourself too thin and don’t choose too many unrelated subjects. Combining work for agencies and direct clients could also help you reap the benefits and mitigate the risks of working with each type. Finally, Corinne listed some services translators and interpreters can expand into, from purely linguistic to other creative endeavors.

Especially during difficult times, like the COVID-19 pandemic or a global recession, when translators and interpreters may see some of their work dry up and clients disappear into thin air, diversification can help you future-proof your business.

Check out the recording of this webinar and share it with colleagues who may be interested!

Author bio

Maria Guzenko is an ATA-certified English<>Russian translator and a certified medical interpreter (CMI-Russian). She holds an MA in translation from Kent State University and specializes in healthcare translation. Maria is a co-founder of the SLD certification exam practice group and the host of the SLD podcast, now rebranded as Slovo. More information can be found on her website at https://intorussian.net.