5 Reasons Why You Should Maintain A Good Work-Life Balance
Seventy percent of the respondents to an informal survey I conducted in 2016 thought finding higher-paying clients was the hardest part of starting out in translation. The second-hardest was setting prices for services. However, once you figure out your target per hour income and decide how many hours you can work, you can base your project prices on these numbers quite easily. Or set a pricing range so you can be a bit flexible with your rates and leave some room for negotiation.
Pricing zones
You might have already noticed in your translation career that you can complete some jobs faster and generate more income per hour, whereas others are slower and generate less income per hour. You could set different prices for different jobs if you wanted to and still get the same per-hour income by developing different price zones. These help us determine whether we should take on a job or not, or perhaps try to negotiate the rate.
One way to look at it is to imagine green, yellow and red price zones. Green rates are premium rates. As long as the job is not too difficult, or looks like it will not take too long, we should try not to turn down a green zone job as long as it is within our expertise.
The yellow zone price is when the rate offered is our minimum rate. It’s not an ideal rate, but it is worth considering. Perhaps the job is very easy, or fast, and we can earn good money. Or perhaps it has been a bit slow on the work front lately and we need to take it on to earn some money that week or month. It could also be a really interesting and fun project where we can learn something or develop a new skill.
If the price offered dips down into the red zone, we should turn it down. We must have a red zone in order to have a viable business and make ends meet. But what if we said yes to a project in the red zone only to be so booked up that we did not have time to take on a better paying project, or to market to the clients that pay better? In the long run, we’re better off turning down these projects. Try to market to better-paying clients instead.
By the word, hour or project?
Of the different rate options we have, the most common at agencies is to charge by the word. Direct clients usually don’t know what that means; however, it is still the norm in our industry and in the agency market.
The advantage here is that if you charge by the source word, everyone knows in advance exactly how much the translation is going to cost before the project even starts. The disadvantage is that billing by the word makes translation seem like a commodity. Per-word billing also discourages us from doing thorough research, because we’re not earning money for doing the research, we’re just earning for each word we translate. Another option is to charge by the hour. This is simple and easy to negotiate and rush rates can be established. If it is a time-sensitive job, an hourly rate can also be adjusted to make up for changes in the job scope, for example if the client adds material to the translation, or if it takes a lot longer than anticipated.
The disadvantage is that clients may be wary that there is no fixed price or ceiling price. Interestingly, most translation agencies seem to be resistant to paying the hourly rate that is equivalent to what we make when we bill by the word.
Unless we have a very good handle on the translation speed for every document, or unless our clients will agree to start a project without a binding quote, knowing exactly how to estimate a job on a per-hour basis can be very difficult. Another popular option among freelance professionals is to use project fees. These can be tailored to match the scope of the job and enable us to predict our income more easily. This method has the advantage of allowing us to tweak the per-word or per-hour rate without discussing the details with the client. It also gives the client one number to focus on, and they don’t need to worry about words or hours. I usually give a project price to my direct clients. The disadvantage of using project rates is that it’s also difficult for us to calculate how long it will take. If your client tries to add on extras to the project, you might have to renegotiate, which can get tricky. Another disadvantage is that we get locked into this fixed bid, and there is no wiggle room if the project takes twice as long as expected.
Direct clients are used to paying in a variety of ways; however, they’re usually not used to per-word rates, which they find confusing. You can do them a favor by charging by the project hour or even use a day rate. The further you get away from per-word pricing, the better for this type of client.
Negotiating your prices
As a business owner, you have to make some tough decisions – including walking away from work that does not pay what you charge. There will always be clients looking for world-class quality, but who are not very price-sensitive. But if you charge adequate rates, you do not need hundreds of clients, you just need a few good repeat customers. Most discussions about rates involve an element of negotiation. The better you are at negotiating your price, the better your rates will be. The first and easiest negotiation tip to remember is to reduce the scope of your work in the project, rather than reducing the rate. This acts as a first line of defense for your rates and helps ensure that you do not do more for less. For example, when negotiating a project with a client, price isn’t the only thing on the table. You can discuss deadlines, delivery methods, communication preferences, and other options. The more variables you can negotiate, the higher the likelihood that both parties will feel like winners.
Another tip is to try not to be the first to suggest a number. Instead, wait for a quote proposed by the client. The other party often has much more information than you do. Wait for the client to state their budget, and then start the negotiation. Establish the lowest rate you can accept and don’t budge. Don’t go into the red zone. Of course, we must always be ready to walk away from a negotiation if it’s not going to work out. A good way to make sure we are ready to walk away is to have a buffer of savings. That way, when the jobs are few and far between, we don’t have to agree to something just because we’re desperate to get some money and pay our bills. If we do sometimes accept a lower rate for a project, it’s important to remind the client that this is an exception and it’s for this project only. Don’t establish the precedent of a lower price for that client.
I hope this has given you some tips on how to create, improve or implement a pricing strategy. The article is based on an extract from the new book “Marketing Tips for Translators – The ultimate collection of business tips from the podcast”. The ideas and tools explored in this book have produced positive results for translators at every stage in the game. For more information or to pre-order, please go to: http://marketingtipsfortranslators.com/the-ultimate-collection-of-tips-from-marketing-tips-for-translators/.
Author bio
Tess Whitty has been a successful freelance translator and entrepreneur for over 10 years and owns the company Swedish Translation Services. Her educational and professional background is in marketing and she is passionate about sharing her knowledge with other freelancers in the form of presentations, training, mentoring and consulting. She is also the author of the book “Marketing Cookbook for Translators”, with easy to follow “recipes” for marketing your translation services and achieving a successful freelance lifestyle, and “Marketing Tips for Translators – The Ultimate Collection of Business Tips from the Podcast”. In 2014 she also launched the award winning podcast “Marketing Tips for Translators”. For more information, and to connect, go to www.marketingtipsfortranslators.com.
About the author
This post was written by a lovely contributor. If you would like to write for the Adventures in Technical Translation blog or participate in one of our ongoing series, please visit the Contributions page for more information. You can also check out the awesome contributions already published on our blog.
You may also like
