| Pages in topic: < [1 2 3 4] | Why and how do agencies fail? Thread poster: Dan Lucas
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Dan Lucas 
United Kingdom
Local time: 00:11
Member (2014)
Japanese to English
TOPIC STARTER | Over-dependency is a classic no-no | Jan 31, 2016 |
Andy Watkinson wrote:
And yes, things work out OK for as long as they have the "biggie", the one which is actually paying the bills and producing the profit but, as we all know, these key clients eventually disappear.
An excellent point. But even if they don't disappear, if they account for (say) 90% of your revenues, then you are in a very weak negotiating position. If they say "We need you to cut your rates by 5% this year" you have two choices.
1) You say "yes". Your income falls by 5% that year and probably 5% the next year and so on indefinitely, until you go bust.
2) You say "no". The client cuts its orders to you by 30% or 50% and suddenly you're struggling to make ends meet.
Many of the most stable companies I know have a very low dependence on any one customer. It's often the key to higher profitability as well.
Regards
Dan
| | | | | Interesting point | Jan 31, 2016 |
Dan Lucas wrote:
Many of the most stable companies I know have a very low dependence on any one customer. It's often the key to higher profitability as well.
I wonder if there is such thing as "sweet spot" in relation to the number f customers a translator "should" have.
My experience is that if you "take on" all the customers you can (intensify your "marketing effort" or even push it to the limit), then, at some point (high activity periods) you end up with customers checking your availability and you not being able to confirm it. As a result, after a repeated "I'm fully booked", you actually lose those customers even before acquiring them.
On the other hand, if you have juts two or four major customers, you are obviously exposed to greater risk of one or two customers stopping trading or giving you less work.
How many customers, on average, should a translator have? It know, it depends on too many variables, but let's try to come up with an average number.
| | | | Dan Lucas
United Kingdom
Local time: 00:11
Member (2014)
Japanese to English
TOPIC STARTER | 10-20 I would say | Jan 31, 2016 |
Merab Dekano wrote:
How many customers, on average, should a translator have? It know, it depends on too many variables, but let's try to come up with an average number.
Easy enough: no one customer should average more than 5-10% of your revenue on an annual basis, which implies 10-20 regular clients and hopefully a few more smaller ones.
Regards
Dan
| | | | Jeff Whittaker
United States
Local time: 19:11
Member (2002)
Spanish to English
+ ...
| Uber driver declared employee as the company loses another ruling | Jan 31, 2016 |
Partly because Uber dictates the fee and the "independent contractors" cannot state their own fee(s). This is why it's important that agencies ask you for YOUR rate rather than pre-setting a rate for a job.
http://www.theguardian.com/technology/2015/sep/11/uber-driver-employee-ruling
"Uber’s US operation has suffered another legal ... See more Partly because Uber dictates the fee and the "independent contractors" cannot state their own fee(s). This is why it's important that agencies ask you for YOUR rate rather than pre-setting a rate for a job.
http://www.theguardian.com/technology/2015/sep/11/uber-driver-employee-ruling
"Uber’s US operation has suffered another legal defeat in its efforts to class its drivers as independent contractors, after a California labour board ruled that a former driver was an employee and so eligible for unemployment benefits."
[Edited at 2016-01-31 18:27 GMT]
[Edited at 2016-01-31 18:32 GMT]
[Edited at 2016-01-31 18:32 GMT] ▲ Collapse
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Jeff Whittaker
United States
Local time: 19:11
Member (2002)
Spanish to English
+ ...
[Edited at 2016-02-03 18:59 GMT]
| | | | | Why and how do agencies fail? My take. | Feb 4, 2016 |
Why?
Because many agencies are not well financed and depend on their client's payment for cashflow. This is one of the reason where agencies tell you "we will pay you when our client pays us", a lousy and trite excuse.
How?
The answer to this is related to "Why", where the agencies are not well financed so they'll have to heavily depend on payments by their clients. And because they are heavily dependent on clients, when something goes wrong, say, if the c... See more Why?
Because many agencies are not well financed and depend on their client's payment for cashflow. This is one of the reason where agencies tell you "we will pay you when our client pays us", a lousy and trite excuse.
How?
The answer to this is related to "Why", where the agencies are not well financed so they'll have to heavily depend on payments by their clients. And because they are heavily dependent on clients, when something goes wrong, say, if the client vanishes in thin air without paying or making excuses to evade payment, the company's funds are not ample and running a hand to mouth business so they could go bust anytime if only one of the clients do not pay them. ▲ Collapse
| | | | Sheila Wilson
Spain
Local time: 00:11
Member (2007)
English
+ ...
| What percentage of players in translation are really on top of their businesses? | Feb 4, 2016 |
To be honest it seems to me that the majority of freelancers have no idea how to run a business either. It's just less damaging (for others, at least) when they have to admit that they aren't making enough money to live on.
We all bemoan the fact that agencies are so badly run and so many fail. Of course, when they fail they generally take other people's money down with them - our money - so it's a critical failure and it affects many of us. But many of them started as freelance tra... See more To be honest it seems to me that the majority of freelancers have no idea how to run a business either. It's just less damaging (for others, at least) when they have to admit that they aren't making enough money to live on.
We all bemoan the fact that agencies are so badly run and so many fail. Of course, when they fail they generally take other people's money down with them - our money - so it's a critical failure and it affects many of us. But many of them started as freelance translators who happened to get a few of the right clients early on (I think somebody mentioned that earlier in the thread). The chances are that when they were starting out they:
- set their rates by putting a finger in the air,
- thought not a jot about positioning themselves, markets, objectives or even how to market themselves,
- learnt nothing in advance about negotiating, risk management, debt chasing, debt recovery, or even about how to invoice clients (yes, that happens!)
- and the list continues.
Most freelancers don't really need a formal business plan as such. However, agencies DO need one. They also need up-front investment from somewhere. And every freelance translator as least needs to know what his or her informal (maybe never set out in print) business plan consists of. ▲ Collapse
| | | | Kevin Fulton
United States
Local time: 19:11
German to English
| General incompetence in the industry | Feb 4, 2016 |
A lot of agencies are started by translators who, having been successful at translating despite their lack of business acumen, decide they can make it big as an agency. There are numerous posts here and elsewhere by translators who, having worked for a few years, are ready to "take it to the next level". They often fail, not for lack of ambition, but because they don't know what they're doing.
Translation agencies/companies fail for the same reasons as in other industries: poor mana... See more A lot of agencies are started by translators who, having been successful at translating despite their lack of business acumen, decide they can make it big as an agency. There are numerous posts here and elsewhere by translators who, having worked for a few years, are ready to "take it to the next level". They often fail, not for lack of ambition, but because they don't know what they're doing.
Translation agencies/companies fail for the same reasons as in other industries: poor management, cut-throat competition in the race to the bottom, weak financial foundations, greed, poor customer and supplier relations, inadequate planning, to name but a few. In the US (and elsewhere, presumably), small businesses have the highest failure rate compared to other enterprises.
Sheila Wilson wrote:
To be honest it seems to me that the majority of freelancers have no idea how to run a business either. It's just less damaging (for others, at least) when they have to admit that they aren't making enough money to live on.themselves,
Sheila is absolutely right. Many translators don't think of themselves as entrepreneurs whose business is translation. Judging by the number of reported successful scams, performing due diligence appears to be a neglected skill among translators who already operate on very thin margins. Faced with cut-throat competition among agencies which drives down prices, new translators jump at the chance to make a few cents, making them vulnerable to unscrupulous agencies or even scammers.
I have yet to see a presentation on risk management by my local translators association.
Knowing how to use a computer is not the only non-linguistic skill translators need. Basic organizational skills such as financial management, record-keeping as well as bookkeeping are required to keep a business going. Growing a business requires other competencies, often lacking in single-shingle operators.
Friends have asked me over the years why I haven't started a translation shop of my own, and my response has remained the same: "You've got to be kidding!" I'm reasonably good at what I do, but I know my limitations. ▲ Collapse
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