Positioning your business for the best clients

To get the most value out of your skillset, you need to find clients who would pick you for your specific skills over a generalist. By way of analogy, a blacksmith in a village couldn’t just make gates to sell to the 500 locals; they’d need a product range. However, a blacksmith in London could make gates and gates alone because the millions-strong market is big enough to support it.

Similarly, the internet is a big market. The world’s biggest. Your translation service can be a very narrow offer, with a high level of expertise – medical, financial, IT etc. – and prove very profitable. You just need to position it well. Prospects need to understand exactly what you’re about and be able to find you easily, through the traditional channels. You will stand out to them high over and above the generalists who may or may not be able to cater to their specific needs. You are lowering their risk of making a mistake by showing you can confidently cover everything required in your specialism.

Positioning is the freelancer’s version of the more corporate branding exercise. It’s more personable and makes the most of the size of your business. It engages people who are looking for your particular expertise, which in turn allows you to charge them a price that reflects your rarity and convenience to them.

There are numerous ways to demonstrate this expertise to prospective clients, to engage them and convey your value to them. This chapter covers how to present yourself in this light, changing you from a freelance commodity (a human machine) to a consulting expert (a helpful human).

One simple way to start the process is to become a ‘thought leader’, or an industry expert, as it used to be known. This involves blogging and publicly speaking on your specialist subjects, sending out a regular newsletter, coining new terms, new concepts, new solutions to old problems etc. It’s not going to do anything on its own, but as part of a wider strategy it’s a starting point to increase traffic to your site and to open doors to potential opportunities. Through speaking, guest blogging or trade publications you can form a feedback loop that can essentially lead to more work.

This wider positioning strategy starts with the way you interact with the client, your tone. Acting professionally is the first step to encouraging the client to do the same. Letting them know early on that there will be consequences for paying you late or changing the project scope can alter the way you are treated by them. This can be overdone; you still have to be easy to get along with, but not someone they can walk over. Having standard terms and conditions can help here (see appendix for an example), but a strong indicator of professionalism is in the language you use and your own behaviour.

You are aiming to prevent a future situation of late payment or project scope change rather than trying to fix it when it happens. To make this easier for you to justify to a client, you can tell them you have to work in a certain framework in order to maintain quality and consistency and the longevity of the business. You have to act like a mini-corporation in some ways, in that their rigid processes in certain key areas, such as payments and billing, ensure the health of the business. Even if you don’t tell clients this, it helps to justify it to yourself. Some examples of actions that reflect this professional position are:

-          Halting work until pre-payment or deposit is made, or if work on a project goes over 14 or 30 days without payment. Letting clients know in advance sets the tone.

-          Billing for time, unless prospecting, with no exceptions. Long phone calls and communications are part of the service and these are billed accordingly, unless built into project scope.

-          Amendments to texts are subject to revision fees, periodic meetings and calls are to be included in the scope to ensure any changes are picked up early.

-          For larger projects, sending a summary report detailing work done is a useful tool for a professional service.

-          For smaller projects, a summary of any issues or queries with the project should be compiled, even if in bullet form.

Using the client’s language, in a management-speak-lite version may be necessary to get them ‘on-board synergistically going forward’, but usually clear speaking, avoiding jargon and talking in terms of benefits rather than features is the simplest way to win them over.

For example, if you need to translate a sales page you could say to the client, “I’ll translate this page taking account of SEO factors, technical nuance, brevity, clarity using the latest version of CATmatic 2000, leveraging your fuzzies and reps and delivering an unclean bilingual as well as an open standard TMX” which might make you sound like you know what you’re doing, but doesn’t help the client much. Instead, think more along the lines of communicating a message like this:

“As your localisation contact I’ll improve your sales page for a long-term benefit. It’ll save you money in the future, improve sales now, and reduce customer support requests. This translation project is specifically tailored to your business goals”

The point to get over, regardless of the wording, is that you will make them more money than they spend on you. Communicating this point is essential in conveying your true value. You don’t have to get all or even any of the above into one sentence, but certainly letting them know the benefits of your work during a call, after discussing their needs, is appropriate.

Freelancers usually do not come close to showing this level of understanding of the client’s objectives. They just want to finish any work ‘on order’, with a short-term view of the project to move on to the next one. The freelancer who positions themselves as an expert or consultant works with the client over time to give their business the best chance of success.

You are not working with them just to translate their website or handbook, then, you are there to solve the business’ language communication problems to directly increase their profits using a variety of specific methods tailored to their business. It’s key to charging more and establishing long relationships.

A consideration of politics is useful. After all, being able to communicate effectively with clients and their teams is paramount. You need them to cooperate to give you the green light for work you would like to do and this isn’t likely if interpersonal relations are strained. You can help to ensure good relations by giving individuals and teams credit in the work you do, while saving enough credit for yourself to make sure you’d be welcome back.

Mismanaging work politics can be risky. I was working with a large client who had contracted another external firm on a translation project. The external firm had their own translation provider, yet the client had switched to our team out of preference. Following the project’s delivery there was apparently an omission in the translation. The other external firm went for the jugular, asking, “don’t you QA your work?” in front of the client. However, on looking into the problem we soon found out that the omission wasn’t in the source text in the first place. We’d done nothing to upset this external firm, presumably only forcing them to switch translation suppliers was enough to make them unsympathetic towards us.

We patched it and re-shipped immediately. Nothing more came of it. We made it clear in correspondence with the client that we would fix this immediately, yet it could have been prevented if the external firm had been up to date in their document versions.

The potential damage done by the other external firm to our relationship with the client could have been bad for future repeat sales. In the end the client didn’t have to deal with team politics because of the modular, temporary and results-driven nature of contract workers. This was no doubt a relief for them and increases the likelihood of them, and clients like them, continuing to not hire new staff for these roles, opting for contractors instead. Being diplomatic in political dealings is a worthwhile pursuit.

Measuring and showing results are key pillars of consultant/expert positioning as this is the proof you’ll need to cement your reputation as someone who delivers results. This further justifies your rate when compared to commodity freelancers.

-         Where possible, orchestrate it so that you can directly measure how much revenue is produced

-         When you have results, show these as you hitting business targets, not ‘just translating’

-         After you demonstrate that you can do this, you have more room to charge more

-         It’s not always easy to quantify the amount of success we bring our clients, and they are rarely set up to measure the value contractors bring, but looking out for opportunities to do so adds value to your service for them and for you

-         If you can prove, or even hint, that the site you translated increased company sales by at least 5%, which might amount to many hundreds of thousands in some cases, then you have a strong case to show the next client just how much value you can deliver. Discussion about charging for a day here or a day there becomes moot at that point.

At certain times you might be offered more work than you can handle. This is a luxury-problem, but a problem nonetheless. You can choose to do one of the following in this case:

1.   Put the client on a waiting list

This might work for direct clients, but rarely for agencies. Still, worth considering as a professional response to the over-capacity problem.

2.   Raise prices

Charging more until you have more capacity to allow new clients is an option that is only workable in boom-times, but if you truly are at capacity, then the only way for your rates is up.

3.   Outsource to freelancers or to staff

This forces your costs up, and these will have to be passed on to the client, and might not necessarily increase your profit as you spend time managing the project and dealing with any issues that may arise.

This last point begs the question: is becoming an agency or outsourcer a sensible way to grow? It’s a question that depends on your definition of sensible. Going the agency route, with in-house staff, you’ll find yourself with huge fixed expenses. The real cost of hiring staff is typically double their salary (at least). Margins must be double also, but this mostly covers increased costs rather than increased profits initially. For both in-house staff and outsourcing to freelancers you’ll find that you have cashflow holes to cover.

You could be waiting 3 months for that £5000 payment while freelancers need paying in 30 days. There are staff costs that are hard to foresee, risks you couldn’t predict and the potential for legal issues are much greater than working alone. It is entirely possible to not grow your profit as an agency or outsourcer, but in fact shrink as you work hard to cover your many fixed costs and problems.

The upside is that you obviously have much more room to grow, higher capacity to take on more projects with your new infrastructure. You yourself won’t be translating as much as before; managing people and their issues will be your new job. It’s really a step into a new skillset that should be thoroughly considered before approaching as it brings more risks and cashflow issues with the instant debts it creates.

The hybrid method is the ‘outsourcing freelancer’. There are fewer fixed costs. The cashflow problem remains, but you can solve that by making sure you get paid soon after the work or even upfront. You have to charge more as an agency or hybrid agency to cover those times when you do have cashflow holes, as well as to pay for the additional infrastructure, tools and marketing costs. In the end it is you who stands to ultimately profit from this risk of investment, not the outsourcers, and that is justification enough for you to charge a healthy margin over and above their rate. If you can stand this level of risk and management, then it is a way to offer your clients a more varied service for their potential needs. If you couple it with a specialism, and bring together a tight-knit team of experts in a particular field, then you can set up the infrastructure to take on much more work than a freelancer working alone.

For an idea of what you might charge for language projects as an outsourcing consultancy, consider the IT consultancies in the United States who charge between $5k and $10k per week for projects. These ball-park figures I’ve often come across show the least value their work must generate for clients over time. Translators can be as scarce a resource as programmers are, with work that creates as much value at times, especially when highly specialised, so these figures might not be beyond the reach of the ‘specialised translation consultancy’ on decent sized projects. Although it has its own risks, this is not an approach to be ignored.

Getting paid on time can be a prickly issue when working with larger firms, with 6 months being the norm in some cases. There’s no budging them on their payment processes if they are an international bank or multinational retail operation. Unless you have some legal leverage, or if they have some accounting reason to pay early, you can expect cashflow to be a concern here. They even sometimes have accounting reasons to pay you as late as they can. Be aware of this risk in your pricing and in the selection of clients. Use a standard terms of business to give yourself a minimum level of cover.

Underbidding to large clients will get you nowhere if they turn out to be late payers. You’re usually best off bidding with full consideration of risks and costs to more agile, small to medium-sized companies with high profits and small infrastructure. These can be found in the fast-growing company lists, newly funded ventures in the news and in certain industries similar to our own, where companies are lean and staff numbers are limited.

Also, small to medium sized companies are more likely to pay you in advance. There’s no harm in asking, and you get rid of cashflow risks in one immediate payment. There are consulting freelancers who only work on upfront payment, but I can only imagine they have plenty enough work to withstand the loss of business from those clients who can’t pay in advance.

Personally I have had experience with upfront payments a few times, mainly with direct clients, but once was for a large agency project (in the four figures region) for a client who had a terrible payment record on the translation portals. I told them politely that I was only able to work with them if they paid my invoice in advance, which they did, and I managed to deliver well in advance of my negotiated deadline. I can imagine them not having agreed to advance payment, but that would have been no loss if there was a risk of me not being paid in the future. A business with a long life can’t be built on gambling with orders. You almost have to imagine your business as a fragile entity in itself which needs special care in order to survive.

Officially incorporating your business to make it a legal entity can actually protect you from bad payers to quite an extent – especially if you have outsourcers depending on your subsequent payments who may want to make an official claim through the courts. They will be limited to claiming business assets, rather than personal assets.

Building a savings fund is another long-term solution to cashflow problems. These company profits can only be generated by factoring them into your rate, over and above your basic living expenses.

The rate calculator at the end of this book is unlike most others, in that it sets your minimum rate to cover the true risks and costs of a business looking to last for years, not just for month to month work on a very risky equivalent of a fixed salary.

Justifying a higher rate is actually quite easy, yet by no means obvious. Consider this:

As a full-time employee you’d earn, say, $50,000 a year, but as a consultant-type freelancer, potentially with the hybrid outsourcing model described above, you have to aim for a much higher salary than this. Full-time employees typically cost their employers double their salary to cover social and other costs. You need to consider these additional costs as your own and charge accordingly.

So you take into account business overheads and the risk of bad-payers, quiet times, legal issues, cashflow issues. Then there is your pension, your taxes, your social security payments, your contingency savings fund, your marketing costs, the risk you take with job security… the list goes on.

But clients don’t care about your financial situation. They just want a flexible, modular workforce they can easily pick up and drop. They want to avoid the 6 months of legal proceedings it would take to get rid of a full-timer, the bad-blood in the office, the salaries, redundancy payments and many other costs. They want results delivered in days or weeks, not months, so they are willing to pay for all this convenience.

It’s a plain-old mistake to work out your rate based on your expected equivalent salary. You have so many more risks and costs to cover, coupled with the fact that you offer much more value than an employee in a shorter time-frame. The rate calculator mentioned will guide you through this and help you to start to position yourself as an expert with a solid business structure behind them, rather than a cheap and apparently fly-by-night freelancer.

There is a wide range of rates offered by all manner of translators. Not just between countries with varying average income levels, even within Europe itself. Some rates are several times higher than others and yet these are all very well qualified translators with equal experience. They are not several times better at translating than each other, some are just able to demonstrate their value more clearly and make the bold decision to stick to their calculated prices.

The highest and lowest rate freelancers may be exactly where they want to be in terms of price, but the potential for charging more is ever present in the eye of the provider and buyer.

I’ve personally doubled or tripled my rate on some projects since I first started translating. I’m not 2-3 times better at the work now than I was, I’m just better at communicating value. And then of course going on to deliver that value. I’m also more efficient in my processes (see the productivity section for more on this) which compounds the gains. The justification for increasing rates was a slow process of realisation, but it needn’t have been. It just wasn’t immediately obvious, as with so much else in business.

Over time I have developed my niche, which had the knock-on effect of letting me work faster. The effect of which was stronger profits, higher workloads, leading to more confidence to raise rates with new clients and so on. I haven’t always necessarily positioned myself as a consultant solving problems for businesses, but when I have it has typically paid off much more than the narrow focus job-to-job approach.

There are other savings that you offer direct clients when you work with them as a contractor (over them hiring an employee to do the same task). Your higher rate covers your risk and costs, and they are normally willing to pay a higher rate than that of an employee for a short period of time just for the convenience:

-         Flexibility, in that they can get rid of you at a day’s notice

-         No need for weeks of training on in-house tools and processes

-         They can find you and set you to work in hours, not months

-         Less legal red tape: much less in most countries

-         They can’t justify hiring a highly specific skillset for a full year

-         …If they can even find anyone with your skillset, locally and willing to take full-time employment

-         They don’t need to pay for your down-time (illness, CPD, family)

-         It’s simpler to compare the costs and returns of contractors

They are all the more willing to pay a contractor a higher rate than hire an employee if the budget they are spending from is either company profit to re-invest, a time-limited budget that must be spent (to justify its renewal) or if paying more will improve the client’s own CV in a shorter time frame.

They are focused on the results and savings, not the cost. So a crucial part of positioning yourself for better clients and higher rates is to recognise what your true costs and risks are, and to charge accordingly.

Is it worth communicating your rates upfront?

On your website, for instance? Some say it is, that it helps to “qualify prospects” and lets them know that you are not available at a knockdown price. Proponents of this method say they no longer receive calls from time-wasters who change the scope of projects frequently, demand more of your time than you have and struggle to pay on time. You get the organised clients. The best clients. It’s an option worth considering, even if it gives away your rate to competitors, at least the focus is then turned to buying on quality, rather than price.

Trying to sell by asking prospects to ‘contact you when they are ready’ is vague at best, and a far from certain strategy. Neither buyer nor seller know what they are likely to get. A cheap or expensive service? A time-wasting client or a major brand? By setting out your shingle clearly and boldly you know more about who will contact you and they know more about who they’re dealing with and how much of their budget they can spend with you.

It’s always best to avoid protracted qualifying discussions – confirm in 30-60 minutes if you can. Free consultations are a cost of being a consultant-type freelancer, so your rates should reflect this time spent prospecting. These are non-billable hours that are a business cost. This is included in the rate calculator.

Displaying your rate might not work well if your rate goes up on a fairly regular basis, during a growth phase, for instance. Nobody wants their rate from months ago being quoted in a future negotiation. Keeping your rates under your hat and per project can be useful, and finding another way to pre-qualify leads could work better depending on your situation. The point is that displaying your current rates is a sure-fire, sledgehammer type of approach to pre-qualifying prospects.

As a compromise to the show/no-show rate debate, you could try displaying minimum rates. A minimum hourly charge, perhaps. This makes entry level pricing clear to pre-qualify only those who have that minimum level of budget. There are many options, and you can change them at a moment’s notice.

There are many ways to run a successful freelance or consultancy business. An efficient way to charge for work for one person can be a failure for others. You can be a ‘word machine’, like the translator with the lucrative $43k month mentioned earlier, or you can take your time to tailor a high ROI solution for a client who truly values your work.

The one thing that all of these methods have in common is that charging too little money will catch up with you one day. Raising your rates is a safety net, reducing the risk of physical and cashflow burnout. It looks after both entities, you and the business.

Charging structures can vary wildly for higher rates. Per word, line, page or 1000 words are all standards in places around the world, but among other freelance professions charging weekly, daily or hourly is the norm. Direct clients are used to paying in a variety of ways. Often they are confused by a translator’s ‘per line target word’ quote. You can actually be doing them a favour by pricing by the day, even if it’s rounded up to the nearest 100 of your currency units.

In fact, with direct clients, the further you get away from per word pricing the better. Why do I say this? Well you should always consider word count behind the scenes in order to estimate project time. But when it comes to charging clients you may do better to invoice by the hour. Or better yet the day. Or better still by the week or project if possible.

Hourly or per word pricing forces the buyer to compare the rate to similar service charges, or even their own hourly rate. This is a poor comparison.  It is akin to commodity working and misses the point of the value you offer, as discussed.

You can’t improve your per word rate much past a certain upper limit, unless prospects have never had a quote from another LSP. In which case they won’t know ranges charged by translators. But assuming that most buyers do know what to expect to pay, charging per day or project is the best compromise to let you increase your rate and make the most of your productivity and efficiency.

Per word/per hour pricing puts you squarely in the nit-picking stage where every extra word or hour requires more admin and rarely affects the end value of the project. The value of the results you deliver is what counts to the client. Clients would never know or care that you spent an extra 15 minutes recalculating the extra 125 words to invoice, effectively cancelling out the effort to do so.

Negotiating per word can have a massive impact on the final price – dropping the per word rate by a penny, cent or two will lose much more than knocking a few hundred off a higher project quote.

When it comes to negotiating, remember to reduce the scope of your work on the project rather than reducing the rate. This acts as a first line of defence against your rate and helps to ensure that you don’t do more for less. A lot of times people just want to negotiate to feel they’ve won something that day. Let them win something, but not at your expense. Reduce scope, not rate.

Weekly pricing may not be realistic unless for the largest of projects, but is worth thinking about where possible, as this involves the least admin and gives you plenty of runway to do a thorough job with all the bells and whistles that would make clients’ lives easier (TM or glossary generation, double or triple proofreading, competition analysis… get creative and add value).

Don’t forget, as mentioned before, clients are used to paying their contracting IT developers, designers, photographers etc. per day or per project. You really can confuse them with your word counts and fuzzies and make your offer look less professional in their eyes, and generally less attractive overall. The truth is they just aren’t as interested in word counts, lines or repetitions as we are. They want the job done and the results to make them look good. They are interested in how much of their budget you will take and how to avoid any mistakes made by you or them in the selection process. They need re-assuring. Per word pricing rarely does this.

Another risk of per word pricing is if the client keeps you waiting for delivery of the file; you lose time you could be working or prospecting for work. Have them pay a flat rate that covers the value of the project services, results and any unforeseen circumstances. You can always overlap projects yourself if you have capacity, but don’t let clients take advantage of your time, damaging your business, without paying for it. Don’t work for free. It’s wholly avoidable by working this downtime into your rates and structures. After all, you can’t realistically invoice for waiting time, no matter how you charge, so building it into your rate for all clients covers the time it happens with that client or two.

Of course you can stick to per word pricing in many situations and with existing clients, and just go ahead and raise these rates to the value that represents your true risk and costs. After all, a lot of direct clients might appreciate how simple per word pricing is. But often-times you can just convert the per word total price to a project price, include any extra services you offer and round up to the nearest ten/hundred and call it the project price. It’s something else to consider, at least.

Finally, after showing yourself to be the expert who works for a reassuringly stability-inducing rate, who fits their niche requirements perfectly (in a variety of language pairs, or not), it’s worth showing new clients case studies of success stories. These make up your portfolio and will go on to do a lot of the talking and proving for you in the future.

The way to acquire case studies professionally is to frame them as a valuable proposition that works for you both. You are giving their business backlinks and new visitors online, and you obviously get to reinforce your business which can only benefit existing clients in the future. If you do this, you start to improve the credibility of your offer and make future clients easier to acquire.

Now we’ve established a general approach to positioning our service to new clients, let’s take a look at how we should handle our client list to ensure optimum business longevity.

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