Recessions are a natural part of our economy and most businesses are when they happen, most people are affected in some way.
As a translator, you will no doubt feel the effects of a bad economy and if you’re not careful, these effects of the recession can be seriously damaging to your translation business.
Recessions do happen. If you’re relatively new to the workforce and don’t remember that recessions are a part of most of our lives, here are a list of the recessions that have hit the U.S. since the 1970’s:
Let’s take a look at the latest U.S. recession that happened during 2007-2009. This was also known as the Great Recession and affected every facet of U.S. employment and labor.
Here are some graphs from the U.S. Bureau of Labor Statistics to illustrate this (look at how the graphs change fairly dramatically during the 2007-2009 time frame:
Non-agricultural wage and salary employment took a major hit.
Annual percentage growth in terms of GDP and personal consumption expenditures was also way down.
Personal consumption expenditures during the Great Recession. You can see how it hit really low during the second quarter of 2009.
This graph shows the change in employment from the previous year in terms of gross domestic product component. Not a good sign, especially in 2009.
So, yeah, recessions do happen.
Effects of Recession on Freelancers
At first you might think, “well I’m a freelance translator so it won’t affect me.”
But it’s worth taking a look at how a recession can and will affect you as a freelancer.
The most common effect, and the one that you’re probably thinking of, is that there will be less potential clients.
With less money floating around in the economy, businesses and individuals who would use translation services to expand their own businesses are looking to save money and one of the things to go is translation services.
Because those businesses are no longer contracting out to translators, there are fewer clients to market to who are still willing to spend the money on translation and other language services.
As a recession begins to drag on, businesses can no longer support their workers and many of them (the workers) begin to be laid off.
More workers being laid off means more workers looking for ways to make ends meet and a healthy portion of those workers will begin to look at self-employment opportunities, leading to increased competition.
In a normal economic period, this would be fine.
However, with less clients hiring freelancers or contracts and more freelancers looking for work, there is less work to go around.
In addition, those businesses that do continue to hire freelancers or contractors are really looking to save money and have more people to choose from, many of which are willing to offer lower prices for their goods and services. This can often price out the freelancers and contractors that have been counting on their normal rates for survival.
Lack of Government Assistance
If a worker gets laid off during a recession and all of a sudden goes from making money to making no money, there are government resources that he or she can turn to for assistance such as welfare or food stamps.
This can be a little more tricky for freelancers, however.
Freelancers don’t tend to lose all their clients at once during a recession.
Instead, they lose them gradually over time; and maybe they end up still keeping some of them.
What this can do is make it more difficult for freelancers and contractors to qualify for the type of government assistance available for laid-off workers, making it even more difficult for freelancers to endure the recession.
Recession-Proof Your Business
OK, so what does this all mean for you as a freelance translator?
First, it means that a recession will probably happen during your time as a freelance translator. Look again at those recessions that have happened (at least in the U.S.) since the 1970s.
There has been at least one recession in the U.S. every decade, with most decades having two recessions.
So don’t think you won’t experience one.
Second, a recession can have dire consequences for your translation business and your livelihood if you’re not careful and haven’t made the right preparations beforehand.
Luckily, there are some steps that you can do to not only weather a financial storm, but also possibly come out better than you were when it started.
It might not be feasible to implement all of these tips right away, but putting one or two of them into action and starting to think about ways to implement the others will go a long way to help recession-proof your translation business.
Diversify Your Income Stream
This is probably the single most important thing you can do to weather any kind of financial storm, including a major recession.
If you haven’t heard of this before, diversifying your income stream means that you receive income from various sources.
Most freelance translators only have one source of income: their translation work.
But what happens when that translation work dries up or disappears altogether?
Then you’re left with no source of income.
Instead, by having multiple streams of income, you can spread out your liability. If one source of income dries up, you’ve still got the other ones providing income. The financial hit isn’t nearly as bad as it would be if you only had one source of income coming in.
What are some ways to diversify your income as a freelance translator?
Here are just a few things:
- teach translation courses
- private language tutor
- graphic design
- essay writing assistance
- weekend tour guide
As a language and culture lover, you have a lot of ways that you can provide value to people where you live. It’s just a matter of figuring out what strengths you have and how to go about monetizing them.
If you’re interested in other types of jobs you can do because you speak a second language, be sure to read my book Second Language, Second Income.
Require Payment Up Front
I know that there are a lot of translators that already do this but one way to make sure you get paid, especially through a recession, is to require payment up front.
There is nothing wrong with this and many service-oriented businesses do the same thing. If you feel uncomfortable requiring full payment up front, you can always charge half up front and then the rest after delivery.
One of the ways to make sure you always get paid for your work is to use a service that offers an escrow-type model for its freelancers and clients.
Upwork is one of those services.
The way it works for payment is that the person requesting the job has to put the money for the job into an escrow account where the money basically sits until the freelancer finished the job.
Once the job is finished to the client’s satisfaction and both sides are in agreement, then Upwork releases the funds to the freelancer.
That method sure beats waiting around for a translation agency to pay you.
You’ll just have to decide if Upwork (and sites like it) is worth it.
Cut Out Unnecessary Expenses
This is one of those cost-savings techniques that should be relatively easy to implement and the savings can build up over time.
However, these cost-cutting measures are definitely better to do during a time of “feast” as opposed to the “famine” of a recession.
That’s because when money is tight, it’s hard to make things stretch even further.
However, when you have some excess, you can comfortably look at your financial situation and see what can be deleted and what has to stay.
(This is also the time to make sure you get out of debt.)
You have a lot more options these days in how you want to spend our money, from cellphone plans to cable TV/Netflix to extracurricular activities and hobbies.
Don’t think that you need it all to be successful. Only pay for those things that bring you job and are fulfilling to you.
Everyone has heard of Marie Kondo these days.
She is a Japanese organizing consultant that stresses the importance and how-to of tidying up, not only our physical environments but our other environments as well. She’s coined the phrase “spark joy” to refer to those things that we should keep vs. the things we should eliminate from our lives.
Here’s her book if you’re interested: The Life-Changing Magic of Tidying Up.
If, as a translator, the things you are paying for aren’t sparking joy in your life, you should get rid of them.
Write Off Expenses
OK, what if you have expenses that you absolutely have to have to run your business?
Well, in that case, you should be writing them off on your taxes (if you live in the U.S.).
Remember that whatever you spend your money on in relation to your business might be taxable.
Here is a list of possible business expenses you might be able to write off:
- home office
- vehicle maintenance
However, be sure and check with your accountant so that you don’t leave any money on the table that should be in your pocket.
I use QuickBooks to keep track of my income and expenses. (Here’s a list of other resources I use.)
Add a Specialization
I preach the importance of specialization as a translator.
But did you know that you can specialize in more than one area?
Just because you normally do patent law translations doesn’t mean you can’t learn more about other types of legal translation and add those to your resume.
Remember the myth and math of finding freelance translation clients?
The more people that know about your services, the more likely you are to get more clients.
If you do patent law and then expand your clientele to include lawyers drawing up contracts, you will essentially double the amount of potential clients you can have.
And it doesn’t just work for legal translator.
Any translator can learn more about a different subject or topic. The internet makes that extremely possible and there’s no reason that you can’t make that a reality for you.
However, the best time to add a specialization (or at least learn about a new area of interest) is before a recession actually hits. You want to bullet-proof your income before the recession hits, not wait until it’s here before you do anything about it.
Pick Up New Skillsets
In the same way that you can pick up new specializations as a freelance translator, you can also easily pick up new skills that will help insulate you from any downturn that happens.
This will also help you diversify your income stream (point number one above).
For example, if you are a translator that only works on translating traditional texts, consider adding more skillsets such as website translation or desktop publishing. You might even consider looking into becoming an interpreter. These skills can make you more versatile.
There’s a great book by Scott Adams (the creator of the comicstrip Dilbert) that talks specifically about this.
In his book, Adams refers to this idea as talent stacking. Basically taking something you already know and then adding skills or talents to it to increase your marketability.
If you’re interested (and it’s a great book, btw), you can read it here: How to Fail at Almost Everything and Still Win Big.
Always Ask for Referrals
When I was in junior high/high school, there was a clothing brand called No Fear.
I had a couple of T-Shirts and one of them had the following quote:
You miss 100% of the shots you don’t take.
The best sales people are those that are always on the lookout for more business.
Whether you’re sending an email, waiting for the bus, or taking your child to the bus stop for school, always be prepared to hand out a business card or explain to others how you can help them as a translator or language professional.
If you’re too nervous to talk to people about what you do, you’ll have a hard time succeeding.
You need to believe in yourself, your service, and your ability to help other people.
When you have that confidence and belief, it comes through and shows.
The person on the other end can feel you’re being real.
Do it because you are truly concerned about the success of others.
When you do, you will be blessed and you will receive much more than you ever give.
P.S. If you’re interested in more tips on how to become a successful translator, read my book.