Three years ago, I lost a large client used to provide 50% of our revenue. I was sad and happy in the same time. Sad because losing a client after a 5-year relationship is not something that makes you happy. But I was happy because, me and my business partner were ready for it.
In a Christmas evening, when I usually review the previous years’ work, I noticed that one of the customers provided around 50% of my revenue and my prices were decreased around 20% with this client in the last year. So, I decided to give it a thought if this the correct path here.
When you have a similar situation, it is better you sit down and write all your thoughts. And here are the two main risks I thought of and the other two solutions I figured out.
Why you should not depend on a few customers
- You are a hostage: yes, when your main revenue comes from a few number of clients you become a hostage for these clients. They always ask for lower prices, free favors, urgent deliveries and other things you may refuse if you are working with a wider base of clients. Your relationship with these big clients, become a submissive relationship, where you can not dictate your business rules or reject the ones you do not like.
- Business crash risk: what happens if you lose one of these clients? This will hurt your business very badly. Imagine you make$10.000 a month, I am not saying translators earn this :), and suddenly you make $5.000. Then you have to give up some of your lifestyle needs and cut LOTS of expenses. Do you like this to happen one day? I do not think so.
Here is How You Can Avoid This Situation
- Consistency in sales and marketing: what happens if you miss consistency on one of the translation projects? You disrupt the quality of the project, right? This exactly what happens if you stop marketing and selling your services to clients consistently. You disrupt the health of your translation career and become a hostage to a few number of clients. So, keep your marketing efforts working even if you are doing daily translation jobs. Reach out to new customers and send your CV or portfolio to new clients in daily/weekly basis. This way you ensure there are enough number of customers in your pool who you can do business with now or in the near future.
- Diversification: As translation is a part of a broader range of production or marketing cycle. For example, translation service is needed when a new product is to be released in new markets or an article needs to be translated as a part of a broader marketing campaign of a brand. Translators with the variety of skills acquired in language, can help in other parts of this production or marketing cycle. Such as doing copywriting, editing or transcreation. Also, the language industry itself has a variety of services where translators can help, such as interpretation, voice-over, CAT tools training or cultural consultation. Nichole Adams mentions great diversification stories in language industry in her book Diversification in the Language Industry: Success beyond translation.
In short, if you have to check your revenue streams and see if there is a balance between these streams. I am sure you will not allow yourself to be a hostage of a certain client or endanger your business in the future. So try to be consistent in your sales and marketing efforts and try to diversify your services.
If you heard similar stories or can think of other risks or solutions, let us all know in comments below.