“Ring Out the Old, Ring In the New”- Alfred, Lord Tennyson, 1850


imagesAt this writing, our country is facing severe uncertainty, as we flirt with a continued government shutdown, whose repercussions will be felt around the world if America is unable to meet her financial obligations for the first time in 200 years.  It will be interesting to see how these events impact the T&I sector, which Common Sense Advisory had forecast will be at 34.7 billion dollars worldwide in 2013 for outsourced language services, half of which is in North America. According to the U.S. Department of Labor Statistics, our industry is expected to increase 29% between 2010-2020, topping Healthcare and Social Assistance at 28%, despite the fact that the latter has the gigantic and aging baby-boomer population fueling its growth.

What is the takeway from this crisis both individually as well as collectively?  That we must move towards a viable plan for fiscal responsibility so that we are not spending more than we are making.

The third quarter, at the latest, is when our small businesses, be they language services providers or otherwise, should be planning for the following year by comparing projections to actuals to see if our business strategies for the year worked.

The most important figure arguably is the net income/net loss, which is total revenues minus total expenses. If the business has been in effect for several years, this is good indicator of the trend it is taking.  For reference, according to Common Sense Advisory in 2011, 24% of language service providers (LSPs) have been in business 1 to 2 years, whereas only 4% have been in business over 30 years. Sixty nine percent have 2.5 employees and only .4% have 101-500.

Substantial digging has to be done to uncover the reason for the NI (net income).  We should look at the number of clients this year vs. other years, what clients did not give us business this year, and who our most important customers are, in terms of profit, so that we can devote more attention to them or get any money that has been left on the table. On the other hand, sometimes, we may have clients that give us a lot of work (revenue), but the cost of goods sold is too high because their work is conditioned on a very low price point or because doing business with them is expensive due to their inefficiencies and payment practices or the customer service they require. We must be realistic and drop these clients who are a liability because they are negatively affecting our all-important bottom line, despite their sales volumes or contribution to the top line.

We must also be proactive.  If you want to improve the NI, you must obviously change something.  When you work on the budget, see what new strategy may make a difference in the following year, assuming it is affordable. Some items to consider might be hiring an employee to make your recruitment, scheduling, invoicing and sales more efficient.  Other considerations could be to weigh whether additional training might make you more marketable, or if the benefits of setting aside dues to join trade associations and attend their events make it appropriate. The latter will also help to keep you abreast of changes and issues in the industry and connect you to colleagues you can collaborate with.

Make executive decisions for next year now,  that will be commensurate with a long-term wellness plan for your business rather than just starting the equivalent of a “fad diet” that will not have a lasting effect.

Let me know your thoughts as to other considerations or advice upon reviewing your year-end income statement and balance sheet.

About mariacristinadelavegamusings

Certified SpanishEnglish interpreter by the Administrative Offices of the U.S. Courts, the State of Florida and the National Association of Judiciary Interpreters and Translators (NAJIT), where I have served on the board of directors, am chair of the Public Relations Committee, and have a column entitled "Getting Down to Business" in Proteus, the association newsletter. I am a member of the American Translators Association (ATA) and have a monthly column named "Interpreters Forum". In addition to the prior two associations, I also belong to AIIC (International Association of Conference Interpreters). I own ProTranslating, Inc., an LSP in Florida. I hold an MBA, which keeps one foot firmly grounded in everyday waking consciousness while the other aggressively seeks unity consciousness...

Posted on October 13, 2013, in Business, Economy, Interpreting/Translation News and tagged , , . Bookmark the permalink. Leave a comment.

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