Determining your rates and fees as a translation company

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= Overview =
= Overview =

Current revision as of 19:42, 12 November 2010

Note: This article is a joint project of ProZ.com members and guests. All translators are invited to contribute freely. (Click "Edit" above; you must be logged in.)
If you don't know how wiki formatting works, see: http://en.wikipedia.org/wiki/Wikipedia:Cheatsheet


Overview

As a new translation company, you will be very dependent upon your translators, and you will need to establish a good database of reliable translators who are available for you and produce good work.

You will need to keep your translators happy, in order to be able to supply your clients with the translations that they need. Setting your rates and fees is a delicate business, and you will need to find the optimum rates which will both make your clients feel as if they are receiving value for money and make your translators feel as if they are being remunerated fairly.

At the same time, you should not underestimate your required earnings, and you should never pay your translators more than 50% of the proceeds from a particular job. There are many expenses to be covered with the remaining 50%, not least your time. Finding clients is a time-consuming and expensive task. Marketing involves a significant investment of both time and money. Finding translators at the right moment can be even trickier. If your deadlines are tight, it can even become impossible, and you can end up paying translators heavy surcharges, such as evening and weekend charges, rush charges and so on. These can seriously deplete your share of the income, and even mean that you are scarcely being remunerated at all for your time.

Finding a single translator for a single short job can be relatively easy. However, even in this case, many translators are fully booked for several days ahead, and many clients expect delivery already within this period. If you add to this the fact that the client has called at your office in person, and left you only poor quality documents with complex formatting to scan, with the instructions that the translation should look as similar to the original as possible, then – if you want to be popular with your translator – you are going to have a long spell of document creation ahead – all of which will cost you time, and therefore money. You may need a full day to prepare the documents for translation. Once they are ready, your translator will have to work pretty fast. Is he or she going to want to charge extra for this? Then, pass this charge on to your client: set up a pricing scheme where translation prices increase in proportion to shorter delivery times. Pass on the document creation and formatting charges as well – these activities cost plenty of your time, and, if you are in business, your time has to be remunerated. The same goes for your correspondence with both your clients and your translators: all this time has to be remunerated as well.

Should you accept a large project from a client which will involve a whole team of translators, all the above problems will be compounded, and in addition you will have to engage proofreaders and quality management assistants to consolidate the work of your team of translators and ensure that the terminology, style and quality level is consistent throughout the document. Do not underestimate what this involves. Also do not underestimate the time spent on correspondence, as well as carefully recording and documenting, down to the minutest detail, who does what in the work process, and when. You will also have considerable associated book-keeping work.

The best way to get your client to accept all these costs is to produce a price list where your various charges are broken down into clear units. Language pairs, levels of difficulty, specialities (legal, financial, medical, marketing, tourism, technical, scientific), formatting work, graphic work, DTP, termbase creation of client’s terminology, WinAligning old documents to create client TMs, rush charges, weekend charges. You can add whatever you like to the range of services that you offer, but each service should be priced separately and listed separately on the estimate that you send to your client in answer to their enquiry. Psychologically, this will be much more acceptable to your client and is much more likely to result in a sale than a single unexplained figure that appears to the client to be high.

Finally, do not forget to take into account business risk, and the certain fact that, for one reason or another, you will never achieve a 100% payment rate from your clients. This has to be factored into the equation too. You will, however, have to pay your translators.

Therefore, the key to pricing is analysis: studying what is involved in providing your services, closely noting the individual services required by your clients, the times involved in various parts of the work processes, the proportion of invoices on which you can collect, and producing an average on which to base your charge. Above all, be firm: firm with your clients about the reasons for maintaining these rates, and firm with your translators about the maximum that you can afford to pay them. In essence, aim to be a good manager.

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