How percentage do I charge to outsource/organize projects. From freelancer to outsourcer to agency.
Thread poster: Claudia Alvis

Claudia Alvis  Identity Verified
Peru
Local time: 16:09
Member
Spanish
+ ...
Jan 29, 2019

I'm mostly a freelancer translator and interpreter. But I'm getting more and more requests for LARGE AND COMPLEX projects, both for interpretation and translation/localization.

I am having a hard time determining how much extra I need to charge for every expense. Or if there's a more efficient way to calculate this. Basically, I want to make the extra effort worth my time because I made mistakes in the past and ended up working so much for very little earnings.

In these
... See more
I'm mostly a freelancer translator and interpreter. But I'm getting more and more requests for LARGE AND COMPLEX projects, both for interpretation and translation/localization.

I am having a hard time determining how much extra I need to charge for every expense. Or if there's a more efficient way to calculate this. Basically, I want to make the extra effort worth my time because I made mistakes in the past and ended up working so much for very little earnings.

In these projects, I will hire outsourcers but not just linguists (translators, proofreaders, QA, interpreters) but also:
An event organizer, who in charge will organize the venue, catering, technicians, etc for the interpretation events
My PA
Engineers for the L10n project
ETC., ETC., ETC.

Besides these expenses, I'm adding to the mix my own experience, all the expenses of networking, my website, my blogging, a great number of recommendations, etc. Plus all the time I'm putting in organizing these projects and having built a reputation with high-end clients from all over the world.


I'm having a hard time deciding how much extra I need to add to the total cost of each service (i.e., linguists, hardware/audio equipment, creating of terminologies, etc., etc. etc.) in order to make these efforts worthwhile.

Also, I want to pursue these large, complex projects more and more since I have some leverage in terms of high-end clients, and eventually move toward working as an agency.

I'm looking forward to reading your comments.

Clau

PS. I have seen local agencies that charge different prices but some (the most popular one) put ZERO effort in offering quality jobs. For instance, no QA, no proofreading, paying peanuts to new translators with no preparation, glossaries, etc.
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John Fossey  Identity Verified
Canada
Local time: 16:09
Member (2008)
French to English
+ ...
Business margins Jan 29, 2019

You're talking business margins, not just provision of services. As a general rule, a business needs a gross margin of 40% to 50% to be sustainable. In other words, if you charge $100, your direct costs (what you pay a subcontractor to do the work) should not be more than $50 to $60. This is for direct costs, what accountants call COGS (Cost of goods sold) and don't cover indirect costs, such as the costs of your website, marketing, office space, equipment, etc., all of which come out of your gr... See more
You're talking business margins, not just provision of services. As a general rule, a business needs a gross margin of 40% to 50% to be sustainable. In other words, if you charge $100, your direct costs (what you pay a subcontractor to do the work) should not be more than $50 to $60. This is for direct costs, what accountants call COGS (Cost of goods sold) and don't cover indirect costs, such as the costs of your website, marketing, office space, equipment, etc., all of which come out of your gross margin.

These are general margins that apply to any business. If you cannot maintain these margins, sustainability of the business model will be questionable. The challenge of any business is to find a market that can bear the prices you need, and suppliers that can bear what you can afford to pay, while maintaining the right margins.
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Claudia Alvis
Gareth Callagy
Colleen Roach, PhD
 

Claudia Alvis  Identity Verified
Peru
Local time: 16:09
Member
Spanish
+ ...
TOPIC STARTER
50% margins Jan 29, 2019

John Fossey wrote:

You're talking business margins, not just provision of services. As a general rule, a business needs a gross margin of 40% to 50% to be sustainable. In other words, if you charge $100, your direct costs (what you pay a subcontractor to do the work) should not be more than $50 to $60. This is for direct costs, what accountants call COGS (Cost of goods sold) and don't cover indirect costs, such as the costs of your website, marketing, office space, equipment, etc., all of which come out of your gross margin.

These are general margins that apply to any business. If you cannot maintain these margins, sustainability of the business model will be questionable. The challenge of any business is to find a market that can bear the prices you need, and suppliers that can bear what you can afford to pay, while maintaining the right margins.


Thank you John. I didn't know the margins were that high. I'll start working that info to my business.


 

Teresa Borges
Portugal
Local time: 21:09
Member (2007)
English to Portuguese
+ ...
@Claudia Jan 30, 2019

Though I agree with John Fossey, I would gather all data and other aspects of your future business and consult a qualified accountant…

 

Colleen Roach, PhD  Identity Verified
United States
Local time: 13:09
Member (2019)
French to English
+ ...
Uber + event-organizing; translators' rates Jan 30, 2019

Claudia Alvis wrote:



In these projects, I will hire outsourcers but not just linguists (translators, proofreaders, QA, interpreters) but also:
An event organizer, who in charge will organize the venue, catering, technicians, etc for the interpretation events



PS. I have seen local agencies that charge different prices but some (the most popular one) put ZERO effort in offering quality jobs. For instance, no QA, no proofreading, paying peanuts to new translators with no preparation, glossaries, etc.



Claudia, Two partsof your post:

Event Organization: Not sure if you know this, but Uber has recently moved into this space. https://www.uber.com/events/

Uber's move means, if nothing else, that there's money to be made there.

I've worked in event organization -- doing some of it myself & then having a 2-person event staff as part of a communications/marketing department I headed in a fairly recent job.

Event organization can be very complex, as there are so many moving pieces (video, attendees, catering, locale, marketing/PR, speakers, security, contracts, etc.) & that's just a very small summary. If you're someone who likes logistics and the adrenalin rush of making it all come together, it can be a very satisfying endeavor. I'm sure there's a lot of research out there to consult.

Re: your remark about local agencies paying peanuts to young translators: if you can come up with a different business model that would be fantastic. If you've followed recent threads here it seems like there's an ongoing "race to the bottom" in terms of rates.

Good luck with your project. Sounds exciting.


 

Sheila Wilson  Identity Verified
Spain
Local time: 21:09
Member (2007)
English
+ ...
Factor in possible losses Jan 30, 2019

Maybe you already have, but just in case...

Bear in mind that you'll be contracting to use the time of all these people, plus hiring the venue, and hiring/buying equipment and food/drink etc. If your client turns round at the last moment and cancels, you'll have to honour all those commitments so you could end up well out of pocket unless you have really good insurance coupled with watertight contracts that avoid you being liable for all these expenses. There's also the alternative
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Maybe you already have, but just in case...

Bear in mind that you'll be contracting to use the time of all these people, plus hiring the venue, and hiring/buying equipment and food/drink etc. If your client turns round at the last moment and cancels, you'll have to honour all those commitments so you could end up well out of pocket unless you have really good insurance coupled with watertight contracts that avoid you being liable for all these expenses. There's also the alternative scenario to consider: where the event runs according to plan but a key interpreter, for example, doesn't turn up.

This all means that you should have a large amount of funding available before you start offering this sort of service. Even if all goes well, you'll have to pay an awful lot of bills soon afterwards. You can't expect payment from your client to arrive in time, every time. And paying your suppliers late will put your reputation at great risk.
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How percentage do I charge to outsource/organize projects. From freelancer to outsourcer to agency.

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