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Corinne McKay

5 things to do before 2012

Hello readers! Thoughts on Translation is back from an incredible two weeks in Costa Rica: we visited Corcovado National Park and the Arenal volcano area and it was truly amazing. I highly recommend Corcovado Adventures Tent Camp and the Sirena ranger station for a truly off-the-beaten-track experience. Think wild tapirs wandering down the beach and 10-foot crocodiles floating in the surf (seriously!). We rented a small but beautiful house in Arenal and had a lot of fun rafting with Costa Rica Descents, paddleboarding with Desafio and zip-lining with EcoGlide; I skipped their famous Tarzan Swing but my husband and my daughter loved it! And now…it’s seven degrees here in Colorado and we have eight inches of snow in our front yard. I’m not completely sure why we came back from Costa Rica but there’s plenty of translating to be done, so I’m trying to focus on the positive and look forward to ski season!

While I was on vacation, I started thinking about wrapping up 2011 and setting goals for 2012. I’ve assembled a list of five things I think every freelance translator should do before 2012, and I hope that you’ll add your own in the comments! Addendum: In catching up on Google Reader, I just found this post on the same topic from Sara Freitas-Maltaverne. Excellent suggestions for those who read French!

  1. Do a searching and fearless assessment of 2011. Did you meet your financial goals or did you fall short? Did you finish the major items on your business to-do list or are they still taunting you from the sticky note on your monitor? Think about what needs to change. If you’re like me, some of the same goals appear on your goal list over and over. It took me years (literally) to realize that when that happens, it means that my current method for achieving those goals is irreparably broken. For example I had been trying to finish the second edition of my book for literally three years. Finally I decided that I just had to block out an hour a day and treat that time as sacrosanct, only to be used to work on the book. I won’t say it was easy to follow through on that, but the project got finished! So if you keep saying you’re going to… (upgrade your computer, learn a new TM tool, use your speech recognition software more, attend more client networking events, have a face-to-face meeting with at least one client a month, or whatever) and it hasn’t happened yet, don’t just write it on the list for 2012, make a new plan for actually accomplishing it.
  2. Make any end-of-year purchases or contributions. Before you make your final tax payment for 2011, it’s a good time to burn some money out of the business account if you have a surplus. If you pay your 2012 professional association membership dues before December 31, you can deduct them from your 2011 income. If you need a new piece of durable goods (printer, expensive software, office furniture, netbook, etc.), you can decrease your 2011 taxable income by buying it now. Ditto with contributions to most, although not all, retirement accounts. I have an individual 401K for my corporation, which has the advantage of having a very high contribution limit but the disadvantage that the withdrawals will probably be taxed as ordinary income once I’m old enough to take money out of the account. Other investment vehicles such as the Roth IRA work in the opposite manner: your contribution may not be tax-deducible, but your withdrawals may be. Definitely ask your accountant or financial planner about the pluses and minuses of various year-end contributions.
  3. Get your 2011 deductions in order. Make sure that if you are claiming more than $600 of subcontracting expenses to any one person or corporation, you get their tax data and send them a 1099. And make sure to claim every legal deduction that you can. I don’t like to stretch the rules, but I’m always finding new deductions that I was unaware of. This year’s: if you have kids age 12 or under, you may be able to deduct up to $3,000 of summer day camp costs per child as work-related dependent care. Make sure to get the camp’s tax ID information and make sure that you meet the requirements for the deduction; for example in most cases you cannot claim any work-related dependent care expenses (day care, summer camp or otherwise) if your spouse doesn’t work, and if your kids go to sleepaway camp, you may have to research whether the deduction applies.
  4. Decide whether you are going to raise your rates. I find that with my agency clients, it’s helpful to raise my rates a little bit every year rather than trying to impose a large increase all at once. If you’ve been thinking of raising your rates, the end of the year provides a good reason to do so. You can even prepare a rate sheet with your 2012 rates and send it out to your clients individually.
  5. And of course…start setting your goals for 2012! Whether it’s to earn more, work less, diversify your client base, upgrade your skills or attend some new conferences, now is the time to think about next year. Think about how quickly 2011 went: doesn’t it seem like a short time ago that you were setting your 2011 goals?

Overall I feel quite positive about 2011. In contrast with the larger world economy, the translation industry is still booming and I’ve had as much work as I could handle for most of the year. In terms of goals, I finally (finally!) polished off the second edition of my book, but I could have done more with my direct client marketing campaign. That’s the other advantage of reviewing 2011 in early December: still three weeks left to salvage those lingering to-do items!


Corinne McKay

ATA conference topic: low payers

Amazingly enough in this economy, my sense from the ATA conference is that most freelancers are very happy with their work volume and income levels. Especially as compared with the gloom and doom of the US economy (maybe even the world economy?), I think we’re doing quite well. 2011 has brought me as much work as I wanted and I’m happy with my income despite devoting a fair bit of time to the second edition of my book and my new webinar venture.

Still,  low-paying agencies were a hot topic at the conference. Some freelancers feel that ATA should take a stand on this or somehow get involved (not likely to happen in any case), or that freelancers should come to some sort of consensus on how to handle these agencies. I don’t have the perfect answer, but here are some of my thoughts, and feel free to add your own:

  • The best defense against low payers is simply to be too busy to even contemplate working with them. When I receive lowball inquiries from agencies, I either delete them without responding or respond and say “My minimum rate is X and I’m very busy at that rate, so I will have to decline. Please keep me in mind if you have any future projects with a larger budget.” Part of me feels that an agency looking for a professional translator for 6 cents a word doesn’t even deserve a response, while the other part of me feels that it’s a public service to communicate that professionals charge real money and that we are very busy dealing with clients who pay real money.
  • There really is enough well-paying work to go around. Judy Jenner says this all the time, and I completely agree. There is more than enough well-paying work for all 2,000 people who were at the ATA conference and then some. Leave the low payers to their business model while you pursue yours: the market is there.
  • Most translators charge what their work is worth. You know how every once in a while you have this horrible sinking fear that there are people out there charging a tiny fraction of what you charge and producing well-researched, beautifully-written translations delivered on or before deadline with a smile? Well, I would let go of that fear. As demonstrated by Chris Durban‘s “Mystery Shopper” experiment (described in her presentation at the ATA Translation Company Division conference), agencies that compete on price alone generally produce unusably lousy translations, using some combination of non-native speakers, people who aren’t actually professional translators, machine translation or all three.
  • If you don’t want to deal with low payers, step away from the places they hang out. I’m not one to name names, but auction-style translation marketplaces are not the place to be if you want to earn real money. Instead, market to quality-conscious agencies: see my post on Using Payment Practices as a marketing tool for some ideas on how to do that.
  • Don’t expect associations to get involved. It’s not really ATA’s place to disrupt the free market or set freelancers’ rates for them. Even if ATA were legally able to get involved in rates, who gets to decide what constitutes lowballing? If you currently work for 15 cents a word, 7 cents is lowballing. If you currently work for 45 cents a word, 30 cents is lowballing, and so on.
  • Put your energy where it matters. I believe in fighting for what’s right, but you’re never going to put the Wal-Marts of translation out of business or convince them to quadruple what they pay their translators. So move on; let go. You know how they say that living well is the best revenge? Get your revenge on the lowball market by charging more than they will ever be able to!

In general, I can’t say that I spend a lot of time thinking about or dealing with the Wal-Marts of translation. They’re not my target market and I have more than enough work without them. Other thoughts?


Corinne McKay

Putting 40 cents a word in context

Well, it seems that something about money and income always hits people’s urge to discuss! At 65 comments and counting, “How much do freelance translators earn? Is it enough?” is far and away the most-discussed post in three years of Thoughts on Translation and everyone’s comments have provided me with lots of food for more posts. Here’s one: that elusive 40+ cents per word, which I would consider the top of the freelance translation market. I know at least two thriving freelance who’ve told me they charge that much, plus several more translators who I suspect/assume charge that much, and Chris Durban noted in her comment that her base rates are between 40 and 50 euro cents per word. I should say for the purposes of this post that I don’t earn 40 cents a word (for reasons I’ll go into…). I do publish my rates, and on official document translations I do sometimes make up to a dollar a word when the project is priced per page.

First, let’s give this number some context. If you produce, let’s say 500 finished words an hour, 40 cents a word translates (so to speak) into $200 an hour. No question, that’s good money. However, even here in Colorado (where professional services generally cost a lot less than in New York, LA, Chicago, etc.), my accountant makes $200 an hour and my business attorney makes $250. The Wall Street Journal recently ran an article about the growing contingent of attorneys who charge over $1,000 an hour (yes, that’s three zeros after the one). The article concludes with a prediction that within five to seven years, the gold standard for attorneys’ fees will be $2,000 an hour. So I think that part of the high rates issue is that if you want to charge 40 cents a word, you have to position yourself as a professional service provider on the level of an attorney, accountant, business strategy consultant etc. Realistically, most translators either cannot or are not willing to do that. Note that the WSJ article includes some excellent advice from an attorney who charges $1,100 an hour: “Some clients do focus on the hourly rate, but in the end what really matters is their total cost and whether they got a fair price.” Good tip for any professional service provider!

Second, I would hazard a guess that many translators who charge very high rates work very slowly, or at least more slowly than translators who charge 10 cents a word. At 10 cents a word, you don’t have the luxury of waiting for inspiration: you churn it out and send it in. At 40 cents per word, you have more of that luxury, and your clients also expect much more from your work. So maybe you produce 300, even 200 finished words an hour.

Third, as luscious as 40 cents a word might look, there are some reasons you might not want to charge that much:

  • As Chris and others commented in relation to my previous post, clients who pay 40-50 cents per word expect you to have their backs, all the time and with no exceptions. You cannot get huffy when there’s a problem with your translation. You cannot shut off your phone and go hiking when that client is having a business meltdown. You must be cheerful, helpful and positive all the time. You must follow the news in that client’s industry and spend your own money to go to their industry conferences whether or not they have a job in the pipeline for you. You must get out of your sweats and put on a suit and take that client to lunch a few times a year, shut up about yourself and invite them to talk about themselves. You must either take very short vacations or have someone you really, really trust who will fill in when you go away for more than a couple of days. In short, that $200 per hour is not going to come in exchange for only a modicum of effort on your part. And not to rant, but if some translators will not even spend $25 on business cards that don’t have the “Get your free business cards!” text on the back, they are not going to do what’s required to find and retain $200 an hour clients.
  • Some specializations just don’t pay that much (or at least this is what I tell myself!). For example, my preferred specialization is international development. I translate a lot of legal documents and I enjoy that work, but development is my real passion. And realistically, even high-level direct clients in those specializations probably do not have the budget to pay 40-50 cents a word on a regular basis. Realistically, even at the rates I charge now, I am probably paid more than a lot of the in-house employees at the companies I work for. However I love the work, and I love translating documents that are, for lack of a less hackneyed way to put it, meaningful. So there’s that aspect too.

None of this is to say that a) high income is a bad thing or b) 40-50 cents a word isn’t worth striving for. Mostly, I wanted to raise the possibility that 40-50 cents a word is doable; it’s out there if you want it! Readers, any thoughts?


Corinne McKay

How much do freelance translators earn? Is it enough?

Beginning freelance translators often want to know (understandably) how much they can expect to earn in our industry. Experienced freelance translators often want to know (understandably) whether they are earning enough for the effort they put into their businesses. So, what do freelance translators earn?

  • The American Translators Association does a compensation survey every few years: you can purchase the entire report here or read the executive summary for free. The dates here are a little confusing: the data tables in the summary say that they are from 2006, the file itself is named 2007 and the executive summary appeared in the ATA Chronicle in February 2008. According to this survey, the average full-time freelancer makes a little over $60,000; but US-based respondents reported a large income disparity according to whether or not they are ATA-certified (average income of $72,000 for certified translators and $53,000 for non-certified).
  • The US Bureau of Labor Statistics has some information too, and it’s even more disparate. The BLS reports that in May 2008, the average salary for translators and interpreters was about $38,000 (yikes), with the highest 10 percent earning over $69,000 and the average federal government language specialist earning an average of $79,000.
  • PayScale.com has some snapshot info about translators and interpreters, and it’s also broken down by years of experience.

I think that the issue with most of these surveys is that they are not specific enough to individual situations. For example, is someone who works 35 hours a week and takes 6 weeks of vacation full time or part time? Is someone who works at a client’s office 2 days a week and works for freelance clients 3 days a week self-employed or in-house? Should translation volume be taken into account? If you earned $130,000 last year but you worked 70 hours a week with no vacation, should your income be pro rated to a 40 hour work week with 4 weeks off? You get the picture!

Anecdotally, I think that most of the above-referenced surveys are slanted toward the low end of the market. Back in 2008, I wrote a blog post on Secrets of Six-Figure Translators, and since then I’ve talked to many more freelancers who’ve either stated or conveyed that they earn over $100,000 a year. I think that if you’re very good at what you do and you market yourself fairly assertively, there is enough work out there to earn at least $75,000 a year as a freelance translator even if you work with a mix of agencies and direct clients. I’d say that at this point, all of the translators I know who work exclusively with direct clients earn at least $100,000 a year.

But the real question when it comes to income is: is it enough? The “is it enough” question involves a lot of subjective factors, because it ties into the subsidiary question of whether you’d be doing better if you had a different job. Here’s where the subjectivity comes in. For example in my case:

  • I’m reasonably happy with my income as compared to how much I work. I earn more than the ATA average and my sense is that I work less (maybe even a lot less) than most freelancers do, partly because of my family and non-work commitments and partly because I think I’m more productive at 30ish hours per week. However when I look at how the benefits of my husband’s in-house job (company-funded retirement plan, insurance, paid vacation, and so on) add up, it’s a reality check. If I deduct 15.3% self-employment tax (which I only pay on about half my income since I have an S-Corp), 4-6 weeks unpaid vacation and my self-funded retirement plan from what I make, the bottom line is decidedly different.
  • But, then there are the subjective factors. I love where we live, and there are very, very few in-house jobs in our area for what I do. The only reasonable option, working for a government agency, would involve driving over an hour each way and a relatively inflexible schedule. It’s very important to me to have a work schedule that meshes with my daughter’s school schedule at least until she is old enough to be home alone. Realistically, if I wanted an in-house job that was close to my house and that would offer a similar level of flexibility to freelancing, I would probably be looking at earning less than half what I make now.

“Enough” also depends on where and how you live. $75,000 sounds like a decent chunk of money, but if you are not incorporated and thus pay self-employment tax on that entire amount, live in a nice apartment in a major city, have a car loan or student loan or credit card payment and fund your own health insurance and retirement, that amount goes pretty quickly. On the other hand if you live in a fairly rural area, are debt-free or close to it and practice freelance frugality, you could probably be saving 50% of your after-tax income if you gross $75,000 or more.

Readers, over to you…thoughts on the income issue?


Corinne McKay

Thoughts on 2011

If you’re a freelancer, it’s time to start thinking about your business-related tasks for wrapping up 2010 and starting 2011 on a positive note. A few thoughts:

  • Are you going to raise your rates? If so, think about how to raise them effectively. Are you going to raise your rates for new clients and keep existing clients at the same rate, or raise them across the board? Are you going to approach your regular clients in advance of the rate raise and see if they’re amenable, or inform them of the rate raise and see what happens? Keep in mind: it’s easier to raise your rates a little bit each year rather than trying to impose a drastic increase every few years; some agency clients may have a rate ceiling and it’s up to you if you want to work for that rate or not; in my opinion, the more objective you are about rates (by using a rate sheet or similar tool), the better.
  • What are your tax prep plans? Are you going to prepare your taxes yourself, stick with your current accountant or use a new accountant? Whichever option you choose, start early. My accountant has gotten me in the habit of closing out my books as soon as the year ends and preparing my taxes as soon as possible after that. This saves a lot of sleepless nights and hand-wringing in April!
  • How about year-end retirement (or other) contributions? Depending on the financial instrument, you may have until April 15 to make these contributions; but plan them now! Making a year-end contribution to your 401K or similar account can be a great way to save on taxes (make sure to check with a tax professional to make sure you’re doing this legally!), but make sure you budget accordingly.
  • And as for your goals? Force yourself to cast an objective eye on 2010. Be honest with yourself. What goals did you meet, exceed or fall short of? Most importantly, how can you make a step-by-step plan for reaching your goals in 2011?