Marketing

At last year’s American Translators Association conference in San Francisco, I overheard a few conversations about how the translation industry would be affected if translators started billing by the hour rather than by the word. In some cases and for some jobs, translators do bill by the hour, but the tried-and-true per-word charge is still the norm. Here are a few thoughts on charging by the word versus by the hour.

Pricing translation by the word has some advantages: Especially if you charge by the source word, everyone knows up front how much the translation will cost, down to the cent. No surprise overruns to deal with and no estimating how many hours a project will take. Per-word pricing encourages translators to maintain their skills and technology, since efficient translators effectively earn more per hour. In some sense, per-word pricing may also drive translation technology innovations, since translators may be more likely to purchase a tool that allows them to work faster. Also, skilled and efficient translators can probably earn more by charging by the word than clients would be likely to pay by the hour. Say that you’re translating 600 words an hour at 14 cents a word, not out of the question for many translators, but I’ll venture a guess that those same clients might balk at paying $84 an hour for translation.  Per-word pricing also allows translation buyers to compare apples to apples when it comes to costs, rather than weighing a higher per-hour quote from a translator who claims to work faster versus a lower per-hour quote from someone who works more slowly.

But then again…:Pricing by the word has an obvious disadvantage from the translator’s side, which is that you are agreeing to work for a flat and fixed rate. So, when you get to those three pages of barely legible handwriting, or the document that’s been scanned, faxed and photocopied eight times before arriving in your inbox, you have to decide whether you need to negotiate a higher per-word rate. This can be a particular problem when it comes to editing, which is why I personally decline to be paid by the word for editing.

So then maybe pricing by the hour is better?: Well…yes…no…maybe! The main advantage of pricing by the hour is that there is no risk of loss on the translator’s part; if you charge $50 an hour and you work ten hours, you make $500. If you charge 20 cents a word and think you can translate 600 words an hour but the nature of the document is such that you really translate 250 words an hour, you’ve just taken a big hit. However, my main reasons for continuing to believe in pricing by the word are: a) the client knows up front how much the translation will cost and b) I think that most experienced and efficient translators can earn more by the word than what most clients will pay by the hour. Just don’t forget to agree in advance on whether the billable word count is source or target!

Recently, several newly established freelance translators have asked me about how and when to say no to clients who are offering translation projects. It’s a delicate topic, since as freelancers we need to accept work in order to stay in business, but we also need to decline work in order to maintain a good quality of life to avoid taking on projects that are outside our areas of expertise. Following are some tips on how to say no to clients without harming your future relationship with them.

When I decline a job because it is outside my area of expertise or because I think the deadline is unrealistic, I tell the client what the issue is, because I think that this builds an honest relationship with the the client, who is then more likely to believe me when I say that I can take something on. For example if the project involves very technical documents or hard science, I simply say, “It’s not my specialization; the end result will be much better if you use a translator who specializes in that area.” If the deadline is more than what I can take on, same plan of action: “I’m concerned that I can’t do a quality job in that amount of time. Of course if you can extend the deadline…”

One advantage of this strategy is that I offer it as evidence to new clients. If the client seems nervous about using me and I want the project, I tell them that I regularly turn down work that is outside of my specializations, or I say “I never take on a project that I feel I can’t do a good job on. I wouldn’t give you a quote for this project if I weren’t confident in my ability to produce a high-quality translation.” This way, the client knows that I don’t automatically say yes to everything.

Personally, I try not to refuse a project because of rate or deadline issues without at least putting forth a counter-offer. For example if a client says “we can pay X cents a word,” where X is much lower than my rate, I might say “I would be very interested in this project if you can pay my base rate of Y cents a word.” Depending on the situation, for example if I can tell that the client is new to purchasing translations, I might also suggest that “Of course you’re welcome to look for someone who will work for that rate, but I would be concerned about quality since most established professional translators don’t seem to be working for that rate.” If the issue is deadline, I usually take a similar approach, “It sounds like a really interesting project, but I find that in order to produce a high-quality translation, I need to limit myself to 2,000-3,000 words per day. If you could give me 4 days to translate your 10,000 words, I would be happy to help out.”

When you’re weighing your decision on whether to accept a project, I think it’s important to differentiate between a rush deadline and an unrealistic deadline. For better or worse, rush deadlines are the reality in many translation specializations. However, I think there’s a difference between doing 10,000 words in three days (a real squeeze, but possible if you are very familiar with the subject matter and the documents are either in a read/write format or a very legible PDF and don’t involve complex formatting) and doing (or more likely trying to do) 10,000 words in two days; at that level, I think it’s almost impossible to work accurately enough that quality doesn’t suffer.

I think it’s also important to differentiate between going the extra mile/kilometer for your regular clients and allowing yourself to be exploited by new or infrequent clients who are in a bind. Not all translators share this view, but I feel that my regular clients deserve some special treatment for the quality of life that they allow me to enjoy, working on my own schedule, on interesting projects and earning a healthy income. So, if a regular client needs 10 words translated, I do it without charging. If a regular client’s project requires a few hours of work on a weekend, I charge my regular rate instead of a premium rate. However, I don’t do these favors for non-regular clients; the “royal treatment” is reserved for my top few (very few!) clients on whom my business depends. That’s a post for another time, “The Art of Saying Yes!”

Possibly the most anxiety-provoking aspect of launching or running your translation business is deciding how much to charge. Charge too much and you’ll be priced out of the market; charge too little and you’ll be working overtime just to make ends meet. The easiest way to remove the anxiety from this decision is to gather some objective data such as how much money you would like to make and how much it will cost you to run your business.

Adding to the pricing confusion is that most people are used to calculating their wages by the hour, rather than by the word. Beginning translators often don’t know how to estimate how long a translation will take, so don’t know how to set their per-word rates in order to reach their target hourly rate. Whereas an experienced linguist knows approximately how many words per hour he or she translates when working on various types of documents: general, technical, highly technical, handwritten, hard copy, HTML, etc., there is no way to know this if you haven’t done much translation; you simply have to time yourself while you translate to see how fast you work. In general, a translator who is a relatively fast typist (or uses speech recognition software that works well) can translate 400-600 words per hour or 2,000-3,000 words per day, but this is only a ballpark figure. When working on a highly technical document, even an experienced translator might work as slowly as 150 words an hour, and I once worked on a project where I consistently translated up to 1,000 words per hour because the document was non-technical and very repetitive.
Calculating your billable hours
First, complete the following calculation using your actual or estimated totals:

• Hours per week you would like to work
• Weeks per year you would like to work (subtracting vacation weeks)
• Multiply the above two items to get your total working hours per year
• If you foresee taking sick time or additional legal holidays off, subtract those hours
• Subtract your non-billable time, normally 25-50% of your total work time, for marketing, accounting, meetings, slow work periods, etc.
• This is your total billable hours per year

Calculating your target hourly rate
Now, calculate how much money you need/want to earn, by adding together:

• Your salary goal in dollars
• Taxes (15-50% of salary)
• Internet, web hosting, phone, fax, cell phone
• Professional memberships and continuing education
• Marketing materials and advertising
• Office supplies
• Computer hardware and software; technical support
• Auto and travel expenses
• Other costs of operation such as work-related child care, office rent, website development, etc.
• Add the above items together to get your total cost of business operation
• Then, divide your total cost of business operation by your billable hours from the first calculation, which will show your required hourly rate

Once you have this hourly rate worksheet completed, you’ve completed a major step in pricing your translation services. Your next step is to determine how you’re going to arrive at that hourly rate. For example if you want to earn $60.00 an hour, you can achieve this by translating 600 words per hour at 10 cents per word, 400 words per hour at 15 cents per word or 300 words per hour at 20 cents per word. In order to do this, you need to know how fast you work (the only way to figure this out is to time yourself while you do some translations) and what the range of rates for your language pair(s) and specialization(s) is. For example, you might look at rates surveys on online translation marketplaces, the ATA compensation survey or look at websites of translators in your language pair to see if they publish their rates. Some translators, although not all, are also willing to discuss rates with their colleagues.

Knowing how much you need to charge also tells you what type of clients you need to look for. For example, if your hourly rate goal is high, you may need to market to direct clients rather than to translation agencies, or at least to very high-end translation agencies. In working with beginning translators, I find that work speed is often an issue for them and it impacts their work in a few ways. First, a translator whose work is solid but who translates 250 words an hour is going to struggle to make a living on typical agency rates. Second, agencies understandably like working with translators who can turn around large documents in a short amount of time, and won’t be thrilled to hear that it will take you four days to finish 5,000 words.

Yet another element that enters into the rates equation these days is currency exchange rates, especially for translators who have clients in the euro zone. With today’s news of the euro breaking the longstanding barrier of US $1.50, Europe-based translators are taking a big hit when paid in dollars, and those of us in the US are staring in disbelief at the calculator as that 2,000 euro invoice turns into $3,000. Wherever you think the dollar is headed from here, it’s something to take into consideration in your pricing equations.