Business Aspects to Interpreting for Commerce and Industry: Learning to think like a business owner (Part 1)
Competitiveness: distinguishing your own business from others to win clients and command higher fees
Preface
For any profession like a medical doctor, financial accountant, notary public, real estate agent, etc., the special skills, training, and certification for one’s practice represent a significant investment in money, time, and dedication. Monetizing this investment usually means the establishment of a practice that yields a steady income in return for providing the professional service. Depending on the nation or locality and the profession itself, a newly minted or relatively junior practitioner may have the opportunity to join a company or group composed of senior practitioners (frequently co-owners), other junior practitioners (employees), and administrative staff. Law firms and group medical practices quickly come to mind here, and the arrangement is useful. Young entrants to the profession who have no specific knowledge about how to monetize their practice quickly learn, among many things, what is required to be commercially viable. They learn by getting paid a lower salary and contributing to the profit of the business entity—the profit enjoyed primarily by the business owners. The expertise to be commercially successful, however, may be somewhat harder to obtain. Senior members of a firm may try to keep these elements more shrouded from junior members, lest they leave too soon and possibly become competition.
The portrayal described, unfortunately, does not apply very often to the interpreting and translation professions, perhaps because there is no legally required status, for the most part, to practice. Although in my initial foray I did have the fortune to work for one year at a translation company under experienced translators, I also had the “misfortune” of never receiving any formal training or tutelage under senior interpreters and never going to interpreting school. In Japan or the U.S., the likelihood of learning from experienced translators or interpreters in a nurturing and appropriately salaried environment has much more to do with lucky circumstances than available positions and conscious selection. Moreover, neither in-house positions nor subcontracting work that constitute nearly all full-time stations for the profession in Japan specifically teach matters about how to commercially establish and run a practice.
Many agencies in Japan go to the extent of providing Web access for interpreters and translators to go online and confirm their monthly billings that results in an “invoice” to be issued automatically. Technically, an interpreter in Japan working for only agencies can be an independent business without issuing its own invoices. By omitting active invoice issuance, an independent interpreter, possibly unknowingly, trivializes the most important commercial aspect of being in business—issuing its own currency. Interestingly, the invoice is the tool that ultimately results in the top line or sales revenue, the gross amount a business takes in, through their issuance month after month for the entire fiscal year.
Success in Business: Competitiveness
For my columns that look at various business aspects of interpreting, I may refer back to the preface above as the starting block. In this first installment about competitiveness, the professional interpreter considers the challenge of figuring out how to be different from other interpreters who provide the same service.
For any business to succeed, revenues must competitively cover the cost and expenses for providing the goods or services. Competitive means that needy businesses or consumers are willing to order the goods or services offered. To be competitive, the offer must be different from other similar businesses, compelling enough for the customer to buy from you instead of others. The interpreter, therefore, needs to consider how to differentiate. Fundamentally, language combinations and interpreting skills can be important, but I exclude them from the commercial discussion here, which considers the following: specialization, convenience, and pricing.
- Specialization
Whatever the reason may be, if you have a knowledgeable field such as law, finance, manufacturing, steel, aircraft, etc., promoting that knowledge with your interpreting capability appears to be worthwhile. Experience tells me that customers are most satisfied and reassured with interpreting when the interpreter really “knows” the industry served, and then the likelihood of getting more work from the same or related industries increases. Word of mouth and getting favorable endorsements—both highly efficient ways of getting more work—seem to be most effective within the same industry circle. If an honest competitor recommends a service, that comment is considered more credible than the same recommendation from an industry outsider—because people often know and therefore trust the competitor more. Thus, if you get an endorsement, inquiries from the same or related industry are likelier. The resulting concentration of clientele can then reinforce that specialization. Getting work repeatedly from a certain industry or discipline—not to mention the same client—makes you knowledgeable and thus much more useful than an interpreter without the knowledge and experience.
I have found that multiple specializations can be effective in a general way, although admittedly “multiple specializations” may sound a little smug. For example, my academic background in chemistry provides me with sensitivity to materials, components, and ingredients, along with their composition (chemical make-up). Companies frequently get into discussions about smaller components or pieces of their business, such as procurement of certain materials or parts, or about how to manufacture or provide goods composed of procured items. Quality is a recurring theme here, and often boils down to the chemical composition or mechanical characteristic of a component or ingredient. Having a natural curiosity in the makeup of physical things provides me with an advantage in following such technical topics, and suggests subject-matter knowledge (which may or may not be entirely true) to the customer. Encyclopedic knowledge, or at least an appetite to absorb knowledge, therefore, is a huge advantage over a personality not interested in learning the details.
Added to this sensitivity toward materials, components and ingredients, my knowledge of general business finance becomes an incredibly strong combination. Since many of my clients require my interpreting in commercial settings, this knowledge is actually crucial. Meetings that discuss ways to attain commercial success are paramount: nothing can be a higher priority at any level of enterprise than making sure that business is making money. Business finance heavily comes into play for such discussion and can range widely: cost accounting, revenue recognition challenges, receiving or making investments, optimizing expenses, deliberating over accounting rules, etc. In essence, comprehension of financial statements and financial accounting is fundamental to business interpreting. Interestingly, interpreting for business meetings provides the side benefit of learning about successful business practices and the possibility of applying the learning to your own business.
Multiple specializations also protect the livelihood. Changes inside a certain industry where you have expertise may cause demand to slow for interpreting work. Instead of reliance on a single specialization, having a few areas with more expertise than generally held by other interpreters can provide more financial stability and maintain competitive advantage, as those areas with continuing calls for work can cover the slowdown of work in other areas.
- Convenience
Next, how does convenience actually function for the independent interpreter? Unless the client is ready to accept an alternate interpreter that you suggest, convenience for a client is your personal, perpetual availability whenever the need for interpreting arises. Everything else is inconvenience. To address this need, I advise my clients to make inquiries about my availability and to tentatively reserve dates as early as possible. That suggestion has two benefits in managing convenience. An early hold means the desired date is more likely to be served by me, and provides more time to consider options when the desired date is already reserved. Although most clients have little flexibility, you can also advise clients of other dates close to a desired, but already reserved date, for consideration.
Clients are more demanding than ever, however, and requirements can be more challenging. Can you provide interpreting early in the morning or late at night on a conference call? Can you travel to Osaka and be ready to start in the morning at 9AM? Can you translate the material we want to use on the call? We need you to stay in Toyama for a plant visit; can you reserve the hotel for us (interpreter plus client)? A capable agency can filter these questions and support the interpreter. An incapable agency might throw all of these questions at the interpreter. An interpreter working directly for the client is suddenly enlisted to do much more than “Just interpret.” For the enterprising interpreter willing to jump through extra hoops, the customer should be willing to pay for that convenience. We should carefully agree, however, that the fees charged cannot suddenly double or triple. The “premium” for convenience needs to follow from the convention found elsewhere—typically an increment of 15% to 25% on the standard fee. The incremental premium to the regular rate supplies convenience to the customer without the provider (you) taking a loss. The convenience you provide is the differentiator, why the clients keep coming back to you. Charging excessively for the convenience will lead to the client getting convenience handled by a less expensive source. Never underestimate the power of providing a little extra service and support—that difference can lead to being recommended to other potential clients.
- Pricing
Economic motivations are powerful, difficult to ignore, and frightening to fight against. For the professional interpreter, the price charged and received for interpreting has an immediate impact on income. If many interpreters are available for an assignment and the client is happy to choose anybody, then economics tells us the least expensive interpreter is the logical choice. If the client is more selective and wishes to choose from among very few interpreters, again, the least expensive interpreter of that group is the logical choice. In the latter case, however, we can assume that the desirable pool of interpreters consists of more capable candidates who are likely more experienced and more knowledgeable with respect to the client. The client may also have a better insight into the professional capacity of the individuals making up the smaller pool. But are the latter interpreters paid a higher fee? Should they be paid a higher fee?
Interpreting assignments can vary tremendously, and the perception of value provided by an interpreter for any particular assignment can similarly vary. Yet agencies will (try to) categorize assignments and clients so that certain types of assignments can be quickly priced, and interpreters advised in advance on the fees payable. Actually though, every single assignment is going to be different, because the process is personal and not mechanized. Frequently, there is no logic or science to the price of interpreting. Perception and emotion affect price, not reality (e.g., Skippy peanut butter is more expensive then Jif). When a more difficult assignment is understood to command a higher price, for example, this understanding is based on perception of the difficulty. But an interpreter may have an uphill battle convincing an agency to pay a higher fee. To pay higher, barring a decision to absorb the increase, the agency would have to negotiate a higher price with the client. Or the agency may find another interpreter without a higher fee. The agency model consequently tends toward a commodity fee and makes the value proposition harder to establish.
In contrast, for a direct client, the interpreter is able to make a case first-hand, and is likely to obtain benefit. Even if the client does not agree to pay a higher fee, the interpreter takes the opportunity to explain the difficulty of a certain assignment. This communication of value is an indispensable part of shaping an acceptable price. Discussions about value and pricing, once agreed, need to be infrequent so that business can move forward on the “get it done” process plane, but occasionally reconfirming the value you provide is part of the pricing process. Finally, the seasoned professional can be sure to deftly relay the value of the services provided so that the client doesn’t dwell on any concern over expensive fees. In convincing a client to order services, the professional interpreter, therefore, has to discover a method of presenting a perception of value for the services provided, in return for the price schedule requested.
Agencies with large rosters that serve situations calling for a large number of interpreters face the challenge of differentiating their offer from other agencies. There is little time to prove the quality of a roster, let alone justify a higher price. The typical case is an investor relations conference with dozens of interpreters supporting dozens of asset management companies looking to attend plenary and private sessions starring C-suite executives of listed companies. The interpreter is just one more member of a group package, where price, probably, becomes the biggest factor in winning the bid. As a result, the interpreters actually on the job all commiserate about how everything turned into a “herd adventure” once again “this year.” Another typical case is an automobile manufacturer with daily need for a cadre of interpreters, in an industry where cost is a primary driver for everything. Companies or vendors dissatisfied with the provided interpreters in these cases may often “defect” and arrange for their own. Nothing is more expensive than poor communication in our world where the stakes have become incredibly high. Nothing is more frustrating than realizing when no interpreter is better than a mediocre interpreter. The value of the available interpreting rejected in such a case is zero. Commercially, that defines a disaster.
Onward
In order to differentiate the commercial interpreting offer, we can see that specialization, convenience, and pricing are key factors. Specialization can provide a discriminating advantage in conjunction with specific knowledge. Convenience relates directly to service skills. These two differentiators can be learned. Pricing, however, is clearly the tricky animal. There is an emotional gambit with the customer, because the perception of monetary value is subjective. Yet ultimately, pricing is also an equalizer. Payment of 100,000 yen is exactly the same, emotionless amount of money to any interpreter. The same amount of money can lead to commoditization, which is precisely what differentiation aims to avoid. In my next column, I hope to dive into the “money” aspect in more detail.
Raised in Japan, the US and briefly in Indonesia, Reames started translating professionally during his college education years, including a stint for one year at a translation company in Japan. An undergraduate degree in chemistry (1988) laid a bedrock of technical knowledge in material and molecular science, chemical engineering, semiconductors, nuclear energy, computing and telecommunications. He has over 30 years of experience as a J>E and E>J translator; conference, simultaneous, consecutive, and deposition E<>J interpreter; and business owner offering translation and interpreting services. Principal fields of practice include legal, technical, commercial, and financial aspects of future automotive, mobile communications, fast-moving consumer goods, steel manufacturing, luxury goods, retail and wholesale distribution, and fintech. Currently a certified member of JACI, past member of JAT, past active member and former treasurer of the ATA, and previously an ATA-certified translator for both English to Japanese and Japanese to English.