5 Factors Other Than Rates That Affect Your Profit on a Project
We focus on rates quite often and for good reason, as despite what some people insist on claiming rates are going downhill, and despite what others might claim (or just not care about) the current level of financial demands from agencies and business clients is not realistic or sustainable, but this doesn't mean we have an excuse to get lazy and stop at that. There is much more to how much you make than the rate you charge:
- Difficulty. And if you've been around for a while, you probably know how it is: 80% more bother will generate 20% more pay. But what you possibly haven't seriously reflected on yet is that taking only a 20% pay increase while putting in 80% more time sets you back, actually.
Suppose the starting position is that you have 10,000 words to do at $0.10 per, translated at about 500 words per hour. You will make 1000 dollars in 20 hours. This means you will be making $50 per hour.
Are you still with me? If you take another 10,000 words at $0.12 (+20%) with 80% more time, that ain't gonna be no goldmine. You will have to commit 36 hours instead of 2 hours of your time. $1200 divided by 36 hours makes $33.33 per hour. This means you're 33% down.
Eyes wide open already? I can make them even wider (make sure they don't fall out, you're going to need them unless you're unlike me and actually like interpreting :P):
You would actually be better off for taking an actual pay cut but translating easier stuff. Let's hypothetically take a 20% pay cut (not that you should, in real life) but save 80% of our time: we are going to make $800 from 10,000 words at 0.08 per, but we'll have waded through them in 4 hours. Which is almost totally impossible, but we're running huge numbers here to show you, on such extremes, how far the differences could potentially go, based on time required for the task at hand. $800 in 4 hours makes $200 per hour. Compare to $33... yikes!
But let's leave Pareto (a.k.a. the 80-20 rule, typically used for such theoretical illustrations) alone and take more conservative numbers, which are, however, going to be a bit more difficult to calculate (no round numbers that are easy to handle any more).
So, suppose you translate 350 words per hour at 0.10 per. This means you make $35 per hour (before tax, expenses etc.). Suppose your agency or client agrees to a 10% surcharge but you need to invest 50% more time, and I can tell you this is a very realistic scenario. This means you'll need 1.5 hours to translate those 350 words now, at 0.11 per. You will only be able to complete 2/3 of the normal workload within 1 hour, which is 233 words. Rounded up, you will be making $26 per hour. Which means you're down one quarter, despite your nominal raise.
By contrast, imagine taking that 10% pay cut, so that you make 0.09 per word, but your text is easier and you can translate 50% faster, which means 525 words per hour. That will mean $47 per hour. Compare that $47 to your standard $35 and especially to your 'premium' $26 per hour.
If you've ever wondered how come highly qualified translators with unique skills who translate serious stuff somehow don't always seem to be making a lot of money, here is your answer. It also explain how come some rookies or less ambitious translators can be quite affluent compared to their higher-charging peers.
And that is simply because translation price doesn't go up in direct proportion to time needed to translate. This cost is simply mitigated on the client's side and shouldered by the translator, the way things are right now.
- Additional tasks and requirements — included in the PO or job sepcification — compared to 'just translating'. Convert some files, run through a checklist, consult with the client's huge database, verify the HTML while localizing, whatever. The principle is the same: it all soaks up your time with much more celerity than it increases your rates. And you know what that means — you're making less per hour, aren't you? Times 140, 160, 180 or 300, it also means you're making less per month. And times 1500, 2000 or 3000, it also means you're making less p.a. Bottom line: you're making less, even if you theoretically get a small raise or some form of additional payment, especially at cheaper rates than what you get for translation.
- How helpful your client or agency is. Can you just call and ask or do you have to dig through 1000 pages of reference material to translate 10 pages of text? This translates directly into more unpaid time or less. I think there's a chance that the example you've seen under #1 already makes you suspect that after you do the numbers the difference is going to turn out quite surprisingly large. If so, you are correct.
- QA procedures and client input. This really belongs in #2, but it's worth bringing up separately because of how much difference it can make. Processing a long list of questions or proposals is always going to take a lot of time even when they are competent. Much of the time they are not. In a lot of cases you end up explaining the rules to the client's or the agency's QA department… or the junior secretary or intern who was tasked with reviewing your super duper mega extra important translation. And this is before they start arguing… In the end result, your work time can be doubled or tripled for no raise at all, often with the expectation of getting a rebate after going through all the trouble.
- CAT vs non-CAT. CAT analysis can shave several percent off of just about any business, technical or legal text. Say, 5% less in the adjusted/effective/weighted wordcount is not the same as 5% off from your usual rates, but it has the same effect on your pay. If your pay is calculated as wordcount * rate, then — just as in any multiplication — reducing either number by 5% will reduce the end result by 5% too. 1000 words at 9.5 cents per or 950 words at 10 cents per, it still makes 95 dollars either way.
Just to clarify, I'm not raising the banner against adjusted wordcounts and fuzzy grids here. I'm simply saying that just as an agency or client can say: 'We're going to be treating these 1000 words as 950 because we think that's how much work you really do for us,' so can you say: 'I'm going to be treating your 0.10 per word as 0.095 because I think that's how much you really pay me.'
There is nothing unfair in this, as long as you're honest in assessing how much your income hit exceeds the usefulness of fuzzies and repetitions. This is not telling the client what to do or not to do, it simply means that you're going to see some 0.10 offers as 0.095 offers internally. Being conscious of how much you really are offered or paid is not the same as being cheeky or uncooperative.
These are all short-term factors that can apply to specific projects, even one-off projects for one-off clients, even though, naturally, you can benefit from whatever information you have about the client's habits or your relationship (such as the probability of consuming your time with inquiries and change requests). Here's a long-term factor:
- Your relationship with the PM, the agency, the client etc. For the purposes of solely its influence on your income, we can look at it from two perspectives:
- What's in it for you other than the rate, in a long-term perspective. Apart from all of #1–5 from the previous list, part of the relationship is how much work you get, how much effort and time it costs you to get that work, how much time you lose unproductively, for any reason whatsoever, not just their feelings about the rate. There is also the non-financial factor of simply your work comfort, and that is something of which the importance cannot be underestimated. It affects your mental peace, and your health, and even your productivity, in fact. Higher rates don't always lead to more money, or more work comfort.
- The impact of your rates, specifically, on the relationship, in the long term. Or, more precisely, the impact of their feelings about your rates — and the resulting pressure — on their behaviour in the relationship. In plain words, this means how eager they are going to be to work with you, how far motivated to choose you despite a higher rate than someone else is charging, or to get out of their way to help you, or the opposite: to want to cash in on all sorts of available requests and call in all available favours since they're already (over-)paying you so much and flexing their business muscle so much simply, solely by just paying your rate.
Last but not least, in a 'macro' view, your rates affect how much work you get from all clients and agencies. I always keep insisting and reminding people how higher rates can make up for less turnover, notably far less than a full calendar of paid work. And time is important for your family, for your own mental and physical health, for CPD, for your other interests, and probably a couple of other things you could think about, including marketing. But it if you take it too far, you just might have more free time than you'd wish for. ;)
Besides, it's not like we have an ethical obligation to maximize our rates. We actually have an obligation not to overcharge — pretty much like everybody else, and it ultimately comes down to thou shalt not steal. Getting our rates back to a level where most of us can support an upper-middle-class income for a highly qualified and hard-working translator who is not a rock star and not below middle-middle for the rookies is one thing, but at the end of the day outright overcharging is fraud, especially in the context of working with clients who don't (yet) have the knowledge to make an informed decision.
Also please note I'm talking about B2B here, mostly. It's one thing to charge, for example, several hundred dollars for an hour of your time in connection with a profitable business deal, another to charge the same for a medical translation needed by someone who's already broke. Or just something for a visa. Or whatever. I'm not advocating the latter, by any means. This post should not be read as advocating a hard line in B2C with individuals who need a certificate or a CV.