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Poll: Do you intend to sell your freelance business when you retire?
Thread poster: ProZ.com Staff
ProZ.com Staff
Local time: 18:33
SITE STAFF
Aug 28, 2015

This forum topic is for the discussion of the poll question "Do you intend to sell your freelance business when you retire?".

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Teresa Borges
Portugal
Local time: 02:33
Member (2007)
English to Portuguese
+ ...
I don't plan to retire... Aug 28, 2015

... and I'm well over "retirement age". I only started freelancing full-time when I retired from my in-house position some 9 years ago. Health permitting, I don’t intend ever to retire… full time! To answer specifically the question, either BPT dies with me, or my children will decide what to do (one of my daughters is also a translator).

[Edited at 2015-08-28 08:23 GMT]

[Edited at 2015-08-28 08:24 GMT]


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Mario Chavez  Identity Verified
Local time: 21:33
English to Spanish
+ ...
What is there to sell? Aug 28, 2015

I'm afraid there's some confusion inside the question. What is exactly that is considered assets that can be sold or liquidated upon retirement?

Unless the polster is thinking of a translation agency, I consider the question moot and useless. Most of us independent translators, whether we plan to retire at the expected age or not, handle a number of clients, including long-time customers who have come to depend on us for years.

Assuming I become mentally incapacitated (serious forgetfulness or other event that would impair my cognitive abilities), I would have to start winding down my professional activites by:

a) Referring my customers to a trusted colleague to take over.
b) Making the necessary financial arrangements, like closing down my commercial name. In America, we can form a sole proprietorship or a limited liability company even with just one person at the helm. If the owner (myself in this case) decides that it is not in his best interest to continue operating the small company, then there's a simple procedure to close shop, so to speak.
c) Making other arrangements, such as closing down a website, email addresses, etc.

Of course, if one is unable to foresee when it is time to do these things (and other related activities), that's why we have powers of attorney we can establish so that a trusted representative can make these decisions for us. But, aren't we getting ahead of ourselves? In this case, the question should be of a completely different nature.

Again, there is nothing to sell, unless the polster thinks of selling tangible assets we all accumulate over the year, such as computers, office furniture, office supplies, software packages, dictionaries, etc.

On that topic, I know of a retired translator who had intentions of selling her dictionaries. Interested, I contacted her. She had the right intention but not the right information about the value of her used dictionaries. I ended up not buying a single one from her.


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neilmac  Identity Verified
Spain
Local time: 03:33
Spanish to English
+ ...
Ditto Aug 28, 2015

Mario Chavez wrote:

I'm afraid there's some confusion inside the question. ...


Me too. I suppose I could recommend translator friends/colleagues to take over from me when I am eventually unable to continue working, but otherwise I don't understand the question.
I'll probably leave my hardware and stuff to friends and family, whichever is nearest or most in need, along with the rest of my few worldly possessions (vehicles, guitars, a few books, 3 hens... etc)...

And... "retire"? ... What is this strange thing of which you speak?

http://boards.straightdope.com/sdmb/showthread.php?t=305789


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Nikki Scott-Despaigne  Identity Verified
Local time: 03:33
French to English
Goodwill Aug 28, 2015

I take the question to mean "goodwill" in this sense, or something similar:

http://www.investopedia.com/terms/g/goodwill.asp

"An intangible asset that arises as a result of the acquisition of one company by another for a premium value. The value of a company’s brand name, solid customer base, good customer relations, good employee relations and any patents or proprietary technology represent goodwill. Goodwill is considered an intangible asset because it is not a physical asset like buildings or equipment. The goodwill account can be found in the assets portion of a company's balance sheet."

Selling one's freelance business, in the shape and form of one's client base etc. There is a value attached to that for sure, but it is so small, due to lack of visibility, that it's zero is close to zilch. It is easier to quantify for a lawyer, a doctor, for a range of other professionals than it is for a translator.

For any part of one's client base comprised of agency work, it is difficult to imagine how anyone could acquire that part of a business for valuable consideration. Jobs with agents are done on a one-off basis. The agreement holds good for the duration of the job in progress. I don't see how any value can be assessed beyond that. The nature of the agreement is untransferable anyway.

As for direct clients, I can't see that it would work that differently to the way it works with agents.

A lawyer can be certain that there is continuing value in the work he undertakes. He will have a number of clients with a number of cases ongoing at any one time. There is visibility and a degree of certainty through the nature of the work. That is not the case for a freelance translator.

A simple example, not a perfect comparison, but it makes the point I'm trying to get across.

Like previous posters, in the case of a freelancer working solo, I find the transfer for gain (=sale) of the goodwill difficult to imagine. The situation would be diffrerent for a limited company agent, or translators having formed a limited company, or partnership. Provisions will be made in those cases. But that is "hors sujet" as the question is specifically about freelancers. I think it's a bit of a non-starter.

[Edited at 2015-08-28 09:37 GMT]


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tilak raj  Identity Verified
India
Local time: 08:03
Member (2012)
English to Panjabi
+ ...
No Aug 28, 2015

I think most of people when stand business with hardworking then they will inherit that not sell.
Freelance business can be inherit easily and also a long term work for children, if they want to do.


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EvaVer  Identity Verified
Local time: 03:33
Member (2012)
Czech to English
+ ...
No Aug 28, 2015

As far as I know, selling the goodwill of an one-man business is impossible in my country. But to those who answer "I don't plan to retire": my mother was also a translator and interpreter and worked until she was about 80. Having seen the quality of her work then, I know that I MUST RETIRE IN TIME. Even now (in my 50s), I feel my mind is not as sharp as it used to be - yes, I have experience and know-how on my side, but I make mistakes because I cannot keep my attention. I think we should make space for our young colleagues when the time comes.

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Teresa Borges
Portugal
Local time: 02:33
Member (2007)
English to Portuguese
+ ...
And what about... Aug 28, 2015

Nikki Scott-Despaigne wrote:

Like previous posters, in the case of a freelancer working solo, I find the transfer for gain (=sale) of the goodwill difficult to imagine. The situation would be diffrerent for a limited company agent, or translators having formed a limited company, or partnership. Provisions will be made in those cases. But that is "hors sujet" as the question is specifically about freelancers. I think it's a bit of a non-starter.

[Edited at 2015-08-28 09:37 GMT]


... a freelancer cooperative (that's my case)?


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Diana Coada  Identity Verified
United Kingdom
Local time: 02:33
Portuguese to English
+ ...
Ditto Aug 28, 2015

Mario Chavez wrote:

What is there to sell?

I'm afraid there's some confusion inside the question. What is exactly that is considered assets that can be sold or liquidated upon retirement?

Unless the polster is thinking of a translation agency, I consider the question moot and useless.


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Giuseppina Gatta, MA (Hons)
Member (2005)
English to Italian
+ ...
For once, I agree with Mario ;) Aug 28, 2015

Mario Chavez wrote:

I'm afraid there's some confusion inside the question. What is exactly that is considered assets that can be sold or liquidated upon retirement?

Unless the polster is thinking of a translation agency, I consider the question moot and useless. Most of us independent translators, whether we plan to retire at the expected age or not, handle a number of clients, including long-time customers who have come to depend on us for years.

Assuming I become mentally incapacitated (serious forgetfulness or other event that would impair my cognitive abilities), I would have to start winding down my professional activites by:

a) Referring my customers to a trusted colleague to take over.
b) Making the necessary financial arrangements, like closing down my commercial name. In America, we can form a sole proprietorship or a limited liability company even with just one person at the helm. If the owner (myself in this case) decides that it is not in his best interest to continue operating the small company, then there's a simple procedure to close shop, so to speak.
c) Making other arrangements, such as closing down a website, email addresses, etc.

Of course, if one is unable to foresee when it is time to do these things (and other related activities), that's why we have powers of attorney we can establish so that a trusted representative can make these decisions for us. But, aren't we getting ahead of ourselves? In this case, the question should be of a completely different nature.

Again, there is nothing to sell, unless the polster thinks of selling tangible assets we all accumulate over the year, such as computers, office furniture, office supplies, software packages, dictionaries, etc.

On that topic, I know of a retired translator who had intentions of selling her dictionaries. Interested, I contacted her. She had the right intention but not the right information about the value of her used dictionaries. I ended up not buying a single one from her.


...and it gives me a chuckle when people think about selling their "translation business" (unless they are a company)


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Christine Andersen  Identity Verified
Denmark
Local time: 03:33
Member (2003)
Danish to English
+ ...
No Aug 28, 2015

I have a few wordlists that someone might like to work on and update, but I am not sure they are worth much in money terms.
My TMs are definitely NOT going to be handed on. No one would want them anyway - they are complete ragbags, and full of confidential details I am not allowed to pass on.

Software licenses are personal, and the subscriptions will expire. I want to be sure any hardware is duly blanked off and free of confidential information, personal secrets and whatever... It will be commercially worthless anyway.

There are a few books and my collection of dictionaries, but many of those are just for fun! Some came from charity shops, including some VERY useful ones, I might add, but that is where they will probably all end up.

I work for agencies, and it will be up to them to find other translators for their clients, as they already do when I am not available.

How far I actually retire as opposed to just turning down jobs I don't fancy will also depend on various factors.


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Charlie Bavington  Identity Verified
Local time: 02:33
French to English
I might Aug 28, 2015

At any given instant, a business, whether incorporated or otherwise, will have both assets and liabilities.

Assets will include accounts receivable (money you are owed, mainly by customers) plus other credits (tax overpayment, VAT to be refunded, for example). Plus your dictionaries and TMs etc, although these are not actually valued in my accounts. But receivables do appear to have been overlooked in discussion so far.

Liabilities is the money you owe elsewhere - my biggest one is always tax owed (quite legitimately, I hasten to add).

Assuming assets minus liabilities is a positive figure, the business could in theory be sold for a sum based on that figure. I say in theory because it seems to me a proportion of translation business has a personal component, and if it wasn't you personally doing the translations, some clients might not continue to use "your business" once it is under new ownership. It seems unlikely then that "goodwill" would be a positive factor in most sales, and very often, I suspect the buyer would just be buying a bunch of receivables, which might be a somewhat hazardous venture from their viewpoint.

And most people seem to have quite reasonably assumed that retirement would be preceded by a period of winding down before winding up (sorry!) so the assets and liabilities figures would both be smaller than usual, which might make a sale seem not worth the hassle.

But I'm sure most of our "businesses" have a positive book value at any given point in time, and in theory therefore could be sold. I admit finding a buyer for a one-man unincorporated business might not be easy, but if you could sell one anywhere, I daresay this website would be a place to start. As perhaps you can tell, it's an option I've thought about....


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Chris S  Identity Verified
United Kingdom
Swedish to English
+ ...
You can sell direct customers Aug 28, 2015

I have customers I could sell to another translator. The issue would be finding someone who is (a) good enough and (b) needy enough, and the two tend not to go together.

But I know people who have done it.


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Julian Holmes  Identity Verified
Japan
Local time: 11:33
Member (2011)
Japanese to English
Agree hee Aug 28, 2015

Charlie Bavington wrote:

I admit finding a buyer for a one-man unincorporated business might not be easy,


Nice comments, Charlie.

I would endeavor to say almost impossible. Once the key person leaves a labor- and knowledge-intensive company, value disappears. 'Value' is perceived in the eyes of the customers who buy your services. Once the person of value leaves, the operating entity loses all apparent charm and allure.

It's like eating pistachios - once you eat the tasty bit inside, there's only a useless shell left.

The argument posted in this poll can apply only to agencies with a solid client base and valued PMs and other tangible assets inside the corporate entity who can ensure that valued services can be delivered on a constant basis.
Otherwise, we are all bespoke tailors whose value is appreciated only when we deliver a nice-fitting suit. Gasp, such an ephemeral but important bunch we are. Sigh...

[Edited at 2015-08-29 02:55 GMT]


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Mario Chavez  Identity Verified
Local time: 21:33
English to Spanish
+ ...
Lawyers? Aug 28, 2015

Nikki Scott-Despaigne wrote:

Selling one's freelance business, in the shape and form of one's client base etc. There is a value attached to that for sure, but it is so small, due to lack of visibility, that it's zero is close to zilch. It is easier to quantify for a lawyer, a doctor, for a range of other professionals than it is for a translator.

. . . .

Like previous posters, in the case of a freelancer working solo, I find the transfer for gain (=sale) of the goodwill difficult to imagine. The situation would be diffrerent for a limited company agent, or translators having formed a limited company, or partnership. Provisions will be made in those cases. But that is "hors sujet" as the question is specifically about freelancers. I think it's a bit of a non-starter.

[Edited at 2015-08-28 09:37 GMT]


One has to own a sizeable company or concern to have any saleable goodwill or list of clients. And lawyers, doctors, dentists, etc., they may be on the same boat as we do. Some newly minted lawyers work at call centers these days, for example.


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